For those who remained patient, the benefits of last week’s gain were evident. Sowell’s trend-following and fundamental signals remain steady throughout and fully invested.
This past week, the S&P 500 managed to put a bit more polish on its recent performance, rising a solid +0.99%, yielding a YTD gain of 10.55%. For a market that seems to have a built-in upward bias, this was a gentle confirmation that the good times, while not necessarily rolling, are at least still ambling along. It's a bit like a Hollywood premiere: the stars showed up, the crowd was happy, but the reviews are still coming in, and some of them are a bit... mixed.
The chief source of that mixed messaging came from the week's inflation reports. When the Consumer Price Index (CPI) numbers arrived, they were blessedly benign, clocking in at a modest 0.2% month-over-month, right in line with expectations. One might have been tempted to sigh with relief, but as President Reagan once famously said, "Trust, but verify." And the verification came quickly.
The Producer Price Index (PPI) arrived with a roar, surging 0.9% month-over-month. It seems tariffs are indeed in the numbers, with producers facing a hotter headwind than the average consumer is experiencing at the checkout counter. While price declines for household staples helped to offset some consumer-facing price increases, core CPI prices for consumer goods still rose 3.1% year-over-year. Meanwhile, the core PPI data—the "guts" of wholesale inflation—came in much hotter than anticipated, rising 0.9% month-over-month and 3.7% year-over-year.
In other reports:
Industrial Production surprisingly rose 1.4% yoy, the most since January and a positive indication.
Retail Sales: Increased by 0.5%, slightly below expectations of 0.6%.
University of Michigan 1 Year Inflation Expectation rose to 4.9%.
Not surprisingly, this wholesale inflation scare had a ripple effect in the bond market, where long-term Treasury yields rose by 6–7 basis points in response to the news. After all, if producers are paying more, there's a strong chance those higher costs will be passed along—either to consumers through higher prices or by reducing corporate profit margins. This brings to mind another of the Gipper's observations: "The best minds are not in government; if they were, the government would be a great business." Currently, the best minds on Wall Street are trying to determine which of these two outcomes is more likely. On a more reassuring note for American consumers, the week's retail sales data came in essentially in line with expectations, showing 0.5% growth, indicating that the engine of consumer spending continues to chug along.
Earnings and the Chipmaker's Gambit
As the Q2 earnings season winds down, it continues to provide a sturdy foundation for the market's bullish narrative. A majority of S&P 500 companies have beaten their top-line estimates, and an impressive 80% have exceeded bottom-line estimates. The technology sector, in particular, has been a key driver of this success, reaffirming its central role in the market's recent gains. It seems a good number of these companies have been quietly building a little city on a hill of their own, one quarter at a time.
The week also featured a very specific and highly political piece of stock-moving news. Intel stock rose a remarkable 23% following reports that the Trump administration is considering using Chips Act funds to acquire a stake in the chipmaker. The move is designed to promote U.S. chip manufacturing and, in the process, reduce global dependency on Taiwan Semiconductor (TSM). As a result of the news, TSM's stock fell 1.2% last week. It’s a bold move, and whether it’s a wise one will be a story for a later date, but for now, it serves as a reminder that in the modern economy, geopolitical strategy is a potent catalyst for investment.
As we turn the page on the second-quarter results from the retail-industrial complex of Home Depot, Walmart, Target, BJ’s Wholesale, and TJX, we get more than just a snapshot of corporate health. We will get a fresh biopsy of the tariff burden. These earnings reports will determine tariff-raised prices on everything from a garden hose to a pair of socks.
But the conversation we'll all be eavesdropping on next takes place on the banks of a river in Wyoming, where the world's central bankers gather in a mountain retreat for the annual Jackson Hole Symposium. Here, the Federal Reserve will attempt to pull the ultimate magician's trick: to signal a major policy pivot without saying a word. Will Fed Chair Jerome Powell, with all eyes on him, use his podium to lay the intellectual groundwork for a September rate cut, or will he, like a seasoned fly-fisherman, cast a line of ambiguity into a stream of uncertainty and wait to see what bites—will either confirm the path forward or send the financial markets into a holding pattern, where hope and fear are once again tethered by the thinnest of threads.
You may try to destroy wealth, and find that all you have done is to increase poverty.” – Former UK Prime Minister Winston Churchill, 1947
Op-Ed: The Process Is the Point
by Gregory Lai
For me, investing has never been about the outcome. It’s always been about the process.
Okay, not totally true—but it sounded good. Truth is, I’ve been gambling my whole life. It started with poker and mahjong home games, and evolved into BFF road trips to Vegas.
But investing isn’t gambling—and it’s a shame more people don’t understand that. Gambling, by design, is a losing game. Investing, when done right, delivers long-term returns. (And yes, for the record, I only play craps these days.)
That might sound strange in an industry obsessed with returns and rankings. But the longer I’ve done this, the more I’ve come to believe that investing—real investing—isn’t just a numbers game. It’s a behavior game. A discipline game. A self-awareness game.
Many people can earn money. Some can even save it. But most don’t invest. Candidly, that’s why the wealth advisory business still has so much runway. The opportunity isn’t in beating the market—it’s in helping people stick with it.
Back to the point: markets go up, markets go down. Strategies outperform and underperform. But process—if it’s grounded in principle, not prediction—is the only thing you can carry through the cycle.
And let’s be honest—humans love the prediction game. We’ve got egos. But how many of us predicted this cycle? COVID, war, Trump, tariffs, the Fed... no one saw it all coming. And yet here we are: all-time highs, tame inflation, high employment, and AI even higher.
It’s hard to stick with the process in a world that rewards reaction. Hard to be rational when the market is emotional. Hard to stay steady when everyone else is sprinting toward the latest trade.
Mag 7, sound familiar?
The truth is that investing is simple. But it’s not easy. The hardest part isn’t finding the right model—it’s staying with it when it feels like it’s failing you.
What I’ve learned is that process is a kind of promise. A contract you make—with yourself, with your clients, with your future—that you won’t get swept away by the noise. That you’ll show up with intention. That you’ll stay honest, especially when it’s hard.
That’s the real work.
Because in the end, wealth isn’t the reward. The reward is the clarity that comes from doing things the right way, for the right reasons. And the security isn’t just financial—it’s knowing that even in a world you can’t control, your process is something you can.
Now, as we head into the second half of 2025, respect the process. Stay true to your long-term models. And here’s the only forecast I trust:
I bet it won’t be anything we would have predicted
Advisory services offered through Sowell Management, a Registered Investment Advisor. The views expressed represent the opinion of Sowell Management. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and non-proprietary sources that have not been independently verified for accuracy or completeness. While Sowell Management believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sowell Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.
You should receive a confirmation email shortly. Don’t forget to reserve your room through the unique Sowell hotel reservation page. You can extend your stay at the Sowell Summit reduced room rate.
WEEK AHEAD
August 18-22, 2025
Temperature Check for the Economy
This past week, the S&P 500 managed to put a bit more polish on its recent performance, rising a solid +0.99%, yielding a YTD gain of 10.55%. For a market that seems to have a built-in upward bias, this was a gentle confirmation that the good times, while not necessarily rolling, are at least still ambling along. It's a bit like a Hollywood premiere: the stars showed up, the crowd was happy, but the reviews are still coming in, and some of them are a bit... mixed.
The Producer Price Index (PPI) arrived with a roar, surging 0.9% month-over-month. It seems tariffs are indeed in the numbers, with producers facing a hotter headwind than the average consumer is experiencing at the checkout counter. While price declines for household staples helped to offset some consumer-facing price increases, core CPI prices for consumer goods still rose 3.1% year-over-year. Meanwhile, the core PPI data—the "guts" of wholesale inflation—came in much hotter than anticipated, rising 0.9% month-over-month and 3.7% year-over-year.
In other reports:
Not surprisingly, this wholesale inflation scare had a ripple effect in the bond market, where long-term Treasury yields rose by 6–7 basis points in response to the news. After all, if producers are paying more, there's a strong chance those higher costs will be passed along—either to consumers through higher prices or by reducing corporate profit margins. This brings to mind another of the Gipper's observations: "The best minds are not in government; if they were, the government would be a great business." Currently, the best minds on Wall Street are trying to determine which of these two outcomes is more likely. On a more reassuring note for American consumers, the week's retail sales data came in essentially in line with expectations, showing 0.5% growth, indicating that the engine of consumer spending continues to chug along.
Earnings and the Chipmaker's Gambit
As the Q2 earnings season winds down, it continues to provide a sturdy foundation for the market's bullish narrative. A majority of S&P 500 companies have beaten their top-line estimates, and an impressive 80% have exceeded bottom-line estimates. The technology sector, in particular, has been a key driver of this success, reaffirming its central role in the market's recent gains. It seems a good number of these companies have been quietly building a little city on a hill of their own, one quarter at a time.
The week also featured a very specific and highly political piece of stock-moving news. Intel stock rose a remarkable 23% following reports that the Trump administration is considering using Chips Act funds to acquire a stake in the chipmaker. The move is designed to promote U.S. chip manufacturing and, in the process, reduce global dependency on Taiwan Semiconductor (TSM). As a result of the news, TSM's stock fell 1.2% last week. It’s a bold move, and whether it’s a wise one will be a story for a later date, but for now, it serves as a reminder that in the modern economy, geopolitical strategy is a potent catalyst for investment.
As we turn the page on the second-quarter results from the retail-industrial complex of Home Depot, Walmart, Target, BJ’s Wholesale, and TJX, we get more than just a snapshot of corporate health. We will get a fresh biopsy of the tariff burden. These earnings reports will determine tariff-raised prices on everything from a garden hose to a pair of socks.
But the conversation we'll all be eavesdropping on next takes place on the banks of a river in Wyoming, where the world's central bankers gather in a mountain retreat for the annual Jackson Hole Symposium. Here, the Federal Reserve will attempt to pull the ultimate magician's trick: to signal a major policy pivot without saying a word. Will Fed Chair Jerome Powell, with all eyes on him, use his podium to lay the intellectual groundwork for a September rate cut, or will he, like a seasoned fly-fisherman, cast a line of ambiguity into a stream of uncertainty and wait to see what bites—will either confirm the path forward or send the financial markets into a holding pattern, where hope and fear are once again tethered by the thinnest of threads.
Op-Ed: The Process Is the Point
by Gregory Lai
For me, investing has never been about the outcome. It’s always been about the process.
Okay, not totally true—but it sounded good. Truth is, I’ve been gambling my whole life. It started with poker and mahjong home games, and evolved into BFF road trips to Vegas.
But investing isn’t gambling—and it’s a shame more people don’t understand that. Gambling, by design, is a losing game. Investing, when done right, delivers long-term returns. (And yes, for the record, I only play craps these days.)
That might sound strange in an industry obsessed with returns and rankings. But the longer I’ve done this, the more I’ve come to believe that investing—real investing—isn’t just a numbers game. It’s a behavior game. A discipline game. A self-awareness game.
Many people can earn money. Some can even save it. But most don’t invest. Candidly, that’s why the wealth advisory business still has so much runway. The opportunity isn’t in beating the market—it’s in helping people stick with it.
Back to the point: markets go up, markets go down. Strategies outperform and underperform. But process—if it’s grounded in principle, not prediction—is the only thing you can carry through the cycle.
And let’s be honest—humans love the prediction game. We’ve got egos. But how many of us predicted this cycle? COVID, war, Trump, tariffs, the Fed... no one saw it all coming. And yet here we are: all-time highs, tame inflation, high employment, and AI even higher.
It’s hard to stick with the process in a world that rewards reaction. Hard to be rational when the market is emotional. Hard to stay steady when everyone else is sprinting toward the latest trade.
Mag 7, sound familiar?
The truth is that investing is simple. But it’s not easy. The hardest part isn’t finding the right model—it’s staying with it when it feels like it’s failing you.
What I’ve learned is that process is a kind of promise. A contract you make—with yourself, with your clients, with your future—that you won’t get swept away by the noise. That you’ll show up with intention. That you’ll stay honest, especially when it’s hard.
That’s the real work.
Because in the end, wealth isn’t the reward. The reward is the clarity that comes from doing things the right way, for the right reasons. And the security isn’t just financial—it’s knowing that even in a world you can’t control, your process is something you can.
Now, as we head into the second half of 2025, respect the process. Stay true to your long-term models. And here’s the only forecast I trust:
Source: Visual Capitalist
Advisory services offered through Sowell Management, a Registered Investment Advisor. The views expressed represent the opinion of Sowell Management. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and non-proprietary sources that have not been independently verified for accuracy or completeness. While Sowell Management believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sowell Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.