Growing But Slowing, Stocks Recover, an Event For Me

August 10, 2025

U.S. CORPORATE EARNINGS: Of the 452 S&P 500 companies that have reported second quarter earnings, 80% have exceeded consensus expectations. The historical average is 67%. So analysts do tend to be pessimistic, but even accounting for that, second quarter earnings are encouraging the markets. Last week, Palantir Technologies (by 33%), Pfizer (34%), Uber (1.6%), Arista Networks (16%) and Disney (11%), among others all beat analyst consensus expectations. Google reported its best quarter in a while, up 13% year-over-year, 4% above consensus expectations.

U.S. SERVICES SECTOR SLOWING: The Institute for Supply Management (ISM) tracks the U.S. services sector using its ISM Services Index. Anything above 50 indicates the sector is growing. In July, the index came in at 50.1. This part of the economy is still growing, but slowing. Seven of the 18 areas that the index tracks showed contraction. Uncertainty in trade policy, and a pullback in public funding are being blamed. The ISM index tracks both sentiment and actual, documented activity.

GETTING IT ALL BACK: The S&P 500, and U.S. stocks in general, gained back all the losses from the prior week, and then some. The beginning of tariff collections on dozens of countries did not slow down the positive moves in stock prices. Positive earnings reports were a big driver for the higher stock prices. Next week markets will move when the Consumer Price Index (Tuesday), Producer Price Index (Thursday), and U.S. retail sales reports are released.

LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices. 

WEEKLY INITIAL UNEMPLOYMENT CLAIMS STILL NOT MOVING MUCH: In the week that ended August 2, 226,000 initial unemployment claims were reported according to the U.S. Department of Labor. The four-week moving average is now 220,750, a decrease of 500 from last week.  

NEW HOME SALES: Sales of new homes in the U.S. are down 8% from a year earlier (using a 3-month moving average).

STORE CLOSINGS: So far this year, the total amount of retail space permanently closed is over 120 million square feet. Over 5800 store closures have been recorded this year. As the migration to online shopping continues, any slowdown in overall retail traffic will likely accelerate this trend. Retailers At Home and Rite Aid have both closed lots of stores, and they have both filed for Chapter 11 bankruptcy protection. Somehow, according to costar.com, the U.S. retail vacancy rate remains tight at only 4.3%. Evidently, space being vacated is being re-leased rather quickly, at least for now. The top five companies expanding their retail space are Kroger, Ulta Beauty, Casey's, Daiso and Ashley.

HAPPY BELATED BIRTHDAY TO ME: The family had a dinner this past week to celebrate my and my daughter-in-law's birthdays. I was surrounded.

A COMMUNITY FOR ME!: Someone sent me this event I might be interested in. I think I might qualify.

Have a great week!

Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.

Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

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(610) 628 4545

dmacgray@stonecropadvisors.com

"We learned a lot about the Moon, but what we really learned was about the Earth. The fact that just from the distance of the Moon you can put your thumb up and you can hide the Earth behind your thumb. Everything that you've ever known, your loved ones, your business, the problems of the Earth itself-all behind your thumb. And how insignificant we really all are, but then how fortunate we are to have this body and to be able to enjoy loving here amongst the beauty of the Earth itself." Jim Lovell (1928-2025)

"From there Elisha went up to Bethel. As he was walking along the road, some boys came out of the town and jeered at him. 'Get out of here, baldy!' they said. 'Get out of here, baldy!' He turned around, looked at them and called down a curse on them in the name of the Lord. Then two bears came out of the woods and mauled forty-two of the boys." II Kings 2:23-24

SOURCES:

U.S. SERVICES SECTOR SLOWING: https://www.ftportfolios.com/Commentary/EconomicResearch/2025/8/5/the-ism-non-manufacturing-index-declined-to-50.1-in-july

WEEKLY INITIAL UNEMPLOYMENT CLAIMS STILL NOT MOVING MUCH: https://www.dol.gov/ui/data.pdf

NEW HOME SALES: https://www.calculatedriskblog.com/2025/08/recession-watch-metrics.html

U.S. CORPORATE EARNINGS: https://myweeklystock.substack.com/p/weekly-market-recap-aug-4-8-markets?utm_source=post-email-title&publication_id=697043&post_id=170395111&utm_campaign=email-post-title&isFreemail=false&r=s86er&triedRedirect=true&utm_medium=email

STORE CLOSINGS: https://www.newsweek.com/store-closures-exceed-2024-levels-2096509 AND https://www.costar.com/article/1870124869/rising-us-store-closings-on-pace-for-record-year AND https://www.costar.com/article/1870124869/rising-us-store-closings-on-pace-for-record-year

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SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.