This Week in Review | Tariffs & Trade Deals, Record Highs, Meme Stocks (Jul. 25, 2025)

Transcript

Jessica Smith:

Hello and welcome to This Week in Review. This weekly segment is designed to highlight a few important developments you may have missed this week, what they may mean for markets and most importantly, the potential impact for investors. To stay up to date with our latest market insights, subscribe to our YouTube channel or visit FisherInvestments.com. Now let's review what happened this week.

First, tariffs and trade deals.

The Trump administration made several tariff announcements this week ahead of their August 1st tariff deal deadline. On Tuesday, President Trump announced reaching trade deals with the Philippines and Japan. The Philippines deal includes a 19% tariff on its goods, while Japan saw its export tariffs reduced to 15%. The Philippines deal also includes plans for military cooperation, while Japan agreed to $550 billion of investment in the US. Although, details on both agreements are scarce. We also received more information about a previously announced trade deal with Indonesia. This agreement removes tariffs on 99% of US exports to Indonesia. In exchange, the US will lower its tariff on Indonesian goods to 19%. But goods sent through Indonesia from other countries, like China, will face a 40% tariff. Additionally, Indonesia agreed to reduce several non-tariff regulatory barriers to US imports. Importantly for stocks, each deal announcement represents falling uncertainty, even if tariffs remain higher than where they started the year. Markets aren't ignoring the impact of tariffs. April's market drop, for instance, clearly tied into tariff worries. But despite lingering uncertainty, stocks appear to be recognizing that worst case scenarios are looking less likely and are moving on.

Next, record highs.

The S&P 500 hit several new record highs this week, which could cause some to wonder whether now is the time to get out of markets. This type of thinking represents a common investor fear, a fear of heights, which is a natural instinct, but unfortunately, can lead to poor investment decisions. The fear of heights makes us think that, similar to gravity, what goes up must come down. But the stock market doesn't follow the rules of gravity or physics. Hitting all time highs is a regular occurrence in bull markets. Yes, all bull markets end eventually, but before they do, they typically hit dozens, if not hundreds of record highs. If they didn't, stocks could never increase in value over time. In fact, market history shows that after hitting all-time highs, global stocks reached new heights within the next year 95% of the time. Importantly for investors, an all-time high for markets has no bearing over what the market will do going forward. Ultimately, you will get a bull market peak, but in our view, we don't believe market fundamentals indicate a peak is likely today.

Finally, meme stocks.

Alongside new all-time stock market highs, some pockets of investor optimism may be forming, including a renewed interest in meme stocks. First gaining attention in 2021, meme stocks refer to penny stocks, typically for unprofitable companies that experience wild price swings, mostly driven by social media hype and enthusiasm from retail investors. These swings are often made worse by the use of risky options trading, which amplify investors bets. Recent headlines about meme stock revival could reflect warming investor sentiment in the US. But for now, it's too soon to say whether this is a sign of broader market froth or just an isolated trend. Some of the recent rally could just be the stocks bouncing back after experiencing sharp drops during the year's market correction, which to us, is normal market behavior. While the meme stock trend is worth keeping an eye on, we believe global stocks likely have a big wall of worry to climb, despite any alleged pockets of euphoria in a small handful of speculative plays. That's it for this week.

Thanks for tuning in to This Week in Review.

If you're looking for more insights, then don't miss our other series, 3 Things You Need to Know This Week, released every Monday. You can also visit FisherInvestments.com anytime for our latest thoughts on the markets. Thanks again for joining us, and don't forget to hit 'like' and 'subscribe!'