November 18, 2025 Kara Murphy, CFA Resilience in the Face of Tariffs In April, the new Trump administration announced an extensive set of tariffs. In response to the sharp shift away from nearly 100 years of lower barriers to trade, stocks plummeted. In a five-day period from April 2 to April 8, the S&P 500 fell by more than 11%, extending losses that had started months earlier. As the S&P 500 neared bear market territory, the administration paused a large share of the tariffs for 90 days. The pause prompted a rally in stocks even more virulent than the recent decline. The market has returned about 15% so far this year, which follows two consecutive years with returns over 20%.
“When you see one cockroach, there’s probably more,” said JPMorgan CEO Jamie Dimon in an Oct. 14 comment referring to cracks he’s seeing in the banking sector. The, now, infamous cockroach quote sparked important debate about the $1.6 trillion private credit market, which has grown 300% over the past decade while delivering strong risk-adjusted returns. Understanding both the opportunities and risks of this evolving asset class is essential for investors looking to tap into one of the market’s most compelling areas of growth.
The end of the year offers a chance not only for personal reflection but also for thoughtful tax planning. As portfolios shift with another strong market, investors are well served to consider if their portfolio is still on track—both from a risk and tax standpoint. Let’s consider a few key scenarios that can be tackled heading into year end. Another Year, Another Stock That Did Better Than We Expected Each year, a few standout stocks capture attention with spectacular returns—think names like Palantir, Oracle, Netflix, GE Aerospace, Uber, Johnson & Johnson, and Intel have outpaced the market this year. Holding one can feel like hitting the jackpot, but big winners often bring a hidden cost: concentration risk. When one position grows too large, it can expose investors to outsized drawdowns and throw a portfolio off balance. After such strong gains, it may be time to rebalance—locking in success while keeping long-term goals on track and the right amount of risk in a portfolio. Capital Gains Distributions and Mutual Fund Outflows Mutual funds have many strengths, but tax efficiency isn’t one of them. They can distribute capital gains even when shareholders haven’t sold any shares, creating “phantom gains” and unexpected tax bills. A major driver of these gains is investor redemptions—when outflows force funds to sell holdings. Eight of the last ten years have seen net outflows from mutual funds in aggregate, and 2025 appears to be following suit. While not every fund with outflows will make distributions, the risk rises as redemptions increase. If your mutual funds are seeing outflows, it may be wise to rebalance toward more tax-efficient options like ETFs before your mutual fund pays out capital gains.
Key Takeaways The broad U.S. stock market climbed to new highs fueled by strong corporate earnings, especially among technology companies. Broad-based gains pushed all S&P 500 sectors into positive territory for the year-to-date period. The bond market rallied as well, buoyed by a dip in interest rates across maturities. The U.S. economy continued to show resilience despite lingering inflation and trade uncertainty. While the job market is weakening, unemployment remains low by historical standards. For much of this year, uncertainty around trade, fiscal and monetary policy ran high. In the third quarter, however, investors got answers to some key policy questions with the passage of President Trump’s One Big Beautiful Bill Act and the Federal Reserve’s resumption of the rate-cutting cycle it paused nearly a year ago. They also got welcome news on corporate earnings, which helped ease (but not erase) worries about the impact of historically high tariffs. The S&P 500 index posted strong earnings growth , beating analysts’ expectations by a healthy margin. The index marked its nineth consecutive quarter of positive earnings. Earnings growth, greater policy clarity and other tailwinds drove U.S. stocks to new highs. The third quarter marked the first quarter this year the U.S. stock market outperformed international equities markets, which have been buoyed by a sharp decline in the value of the dollar. Read on for a closer look at third-quarter trends and our take on the near-term outlook.
Markets regained their footing in the third quarter, with stocks, bonds, commodities, and real estate all posting gains and nearly every S&P 500 sector ending the period higher. A stable U.S. dollar, new tax legislation, and easing tariff concerns helped fuel the rally, especially in tech and emerging markets. At the same time, labor market softening and a Fed rate cut supported bonds, while investors shifted focus to upcoming earnings guidance on AI spending and tariffs. With more rate cuts expected, the job market and CEO outlooks will be key drivers heading into 2026. Learn more in this week's Money with Murphy.
No Place Like Home: Pain Points in the Housing Market and the Path Ahead
This quarter’s earnings results are in—and they’re sending a powerful message. In this week’s Money with Murphy, Kara breaks down one of the strongest earnings seasons in recent years and unpacks how artificial intelligence is reshaping more than just the tech sector, the AI ripple effects are reaching deep into industrials and beyond. Kara also explores what rising guidance and shifting corporate investments say about the future—and whether we’re witnessing the early stages of a new economic revolution.
The Fed Effect: Power, Politics, and Your Portfolio
A new wave of meme stock mania has taken over social media, sending the prices of some surprising companies soaring. But behind the hype lies a cautionary tale—just ask investors who bought AMC at its peak during the 2021 frenzy. In this week’s Money with Murphy, Kara Murphy draws on her experience as a former stock analyst to explain why chasing momentum can backfire, and what investors should focus on instead. Spoiler: fundamentals still matter.
Earlier this month, the One Big Beautiful Bill Act was signed into effect, introducing a range of incentives aimed at supporting U.S. businesses. Key provisions include expanded bonus depreciation, enhanced credits for manufacturing and R&D, and changes to international tax rules. While the bill includes some complex and potentially controversial elements, such as its impact on the deficit and government spending, this week’s Money with Murphy focuses on how the business-related provisions could influence companies—and, in turn, investment portfolios.
Tariff Turmoil and Rebound: Second Quarter Market Review and Outlook
Best of the East Bay 2025
