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Stocks Rebound In A Volatile Week

by Fortem Financial October 20, 2025

Summary

Stocks rebounded in a volatile week (S&P 500 +1.71%) following the rout two Fridays ago. 3Q25 earnings started strong, led by big banks. Volatility resulted largely from U.S.-China trade rhetoric. Best sectors were communication services (+3.64%) and real estate (+3.46%); biggest laggard was financials (+0.03%).

 

The High-Risk Bull Market Continues

  1. The October Fed Beige Book points to slowing growth as uncertainty continues to weigh on activity.
  2. The September ISM Services Index fell to 50.0, missing estimates and signaling broad-based weakness consistent with slowing U.S. growth.
  3. The U.S. labor market has cooled significantly since May, with a spike in policy uncertainty and immigration-related activities clearly taking a toll on job creation.
  4. The additional uncertainty in the labor market caused by the government shutdown and the absence of labor reports increases the likelihood of an October Fed cut.
  5. In last week's speech, Fed Chair Powell observed that the Fed is navigating the "tension between our employment and inflation goals, with 'no risk-free path' forward."
  6. The minutes from September FOMC meeting strengthen our conviction that the market's forward rate expectations are overly dovish.
  7. The September bankruptcies of auto parts supplier First Brands and car dealership Tricolor remain isolated events for now, but if additional more widespread credit problems emerge, banks are likely to tighten lending standards, hurting economic growth.
  8. We continue to overweight high-quality bonds (e.g., Treasurys) and believe credit spreads have been too tight to warrant holding significant positions in corporate and high yield bonds.
  9. It is possible (maybe likely) that bulls have too much faith in healthy households' ability to carry the overall economy.
  10. The CPI experienced by low-income households is likely higher than overall CPI, which is likely pressuring their spending lower to maintain liquidity.
  11. Many studies show that the private sector is healthy, and the government sector is radically unhealthy.
  12. It has been 16 years since the last true U.S. recession ended in 2009 (not counting the self-imposed pause due to the COVID pandemic).
  13. The consensus earnings growth rate for Q3 has increased from 8.0% to 8.8% since July 1, marking the fifth time since 2003 that growth estimates have been revised higher heading into earnings season.

Source: Bob Doll CIO/CEO Crossmark Investments

 

Market and Index Changes for the Week Ending 10/17/2025

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments. Data provided by Refinitiv.

 

Sincerely,

Fortem Financial
(760) 206-8500
team@fortemfin.com

 

 

Latest News

 

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China's economy slows as trade war, weak demand highlight structural risks

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Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017, 2018 Five Star Wealth Managers!

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The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided. Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf
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Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.

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