Market Note (Special Edition): Remaining Focused Despite the Headlines

By Hightower Great Lakes on June 24, 2025

Geopolitics Will Remain an Overhang

Markets remain in a “wait-and-see” mode, heavily influenced by headlines. Though shaky, there appears to be a ceasefire between Israel and Iran. While this is good news, retail investors should avoid making decisions based on geopolitical developments, even though that is easier said than done.

The key is to focus on the fundamentals, as the economy is averaging 2% growth for the past two quarters, supported by consumers hanging in, as well as manufacturing experiencing a renaissance driven by AI, data centers, electrical grid, and power.

Manufacturing remains my second favorite theme in investing, right behind cybersecurity. Those are places to look for opportunities when the market sells off.

Recently, We’ve Heard from Fed Governors as Well as Fed Chair Powell

Federal Reserve Board of Governors, Christopher Waller and Michelle Bowman, and Federal Reserve Bank of Chicago President and CEO, Austan Goolsbee are all now calling for earlier interest rate cuts. This would be icing on the cake if it came in July rather than the September expectations. 

We believe that they should cut. Inflation has come down, and the labor market is slightly softer, yet still solid. And finally, the Fed Chair’s testimony was nothing new as they await tariff implications on inflation before they make a move on rate cuts. Chair Powell did say that if we didn’t have the tariff unknowns they would have been easing by now.

Things to Watch in Mid-July:

The most important economic data points will be any signals from inflation and employment. That will likely drive the Fed to figure out what it wants to do. Earnings for 2Q will begin, banks start the process, and I expect strong results from higher M&A, capital markets strength, a trough in Net Interest Income, and benefits (just starting) in deregulation. 

Recently, there was speculation that The Bank of New York Mellon Corp. (BK) would like to buy Northern Trust Corp. (NRTS). That is the number one custodian in the industry that would like to beef up its investment/wealth management capabilities. 

NRTS is the number five player. Should it happen, as it is still just speculation, it would be telling what this new regulator will pass or not. But, it’s worth noting that they just approved Capital One Financial Corp. (COF) buying Discover Financial Services (DFS).

Both are top six players in credit cards. And it speaks to companies in the industry feeling like they can push the envelope in deal-making. Stay tuned, as there is more activity likely ahead.    

Click here to read last week’s Market Note (6/23).

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