CLA Outlook — Key Insights for Sound Financial Strategies

Take steps to prepare for changing scenarios.

July 7 Weekly Insights

Big Tech helps propel S&P500 to another record close

During 2Q25, investors drove the S&P 500® up 20% from its April lows to a record high of 6,210.49. The rally was driven by strong earnings growth in Big Tech and tax cut optimism, while investors seemed to have shrugged off prior concerns about inflation, tariffs, and geopolitical risks. The 2Q25 rally has extended valuations in certain sectors, which is why CLA continues to include Small Cap and Quality stocks in our strategies.

ADP® National Employment Report came in far below market expectations in June

The ADP® National Employment Report indicated that private employers lost 33,000 jobs in June, contrary to expectations for a gain of 100,000, with small companies experiencing the largest losses. The Bureau of Labor Statistics is set to release its June Jobs Report on July 3, with expectations for an increase of 110,000 new jobs and a slight rise in the unemployment rate to 4.3%. The weaker than expected jobs report supports CLA’s view that the economy is set to slow, and the Fed should start cutting rates sooner, rather than later.

Advisors and QOZ investors should begin planning now on ways to fund the deferred capital gains taxes, due April 2027

With limited distributions expected from QOZ property recapitalizations, investors and advisors should begin the planning process now. Planning now can help identify additional options that may not be available next year, therefore leading to a more informed and comprehensive decisions making process.

Develop strong financial strategies

Tune in to the second-quarter session of the CLA Outlook as we discuss timely topics around policy, the economy, and year-to-date market performance.

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Strategic Steps

5 Actions Portfolio Owners Should Take Considering Market Volatility

During uncertain times, successful investors take strategic steps to prepare for varied scenarios. Explore key actions you can take to navigate these periods:

1. Review your asset allocation

Align your portfolio with your long-term goals and risk tolerance.
Consider rebalancing your portfolio to maintain your desired asset allocation.
2. Harvest tax losses

Take advantage of market downturns to sell investments at a loss, which can offset gains and reduce your taxable income.
3. Make Roth conversions

Converting traditional IRA assets to a Roth IRA during market dips can be beneficial, as you may pay taxes on a lower account value.
4. Put excess cash to work

If you have cash reserves, consider investing in opportunities aligning with your financial strategy. Money market accounts may be an attractive option for investors seeking a higher return rate on their cash reserves while maintaining liquidity and low risk.
5. Consider gifting strategies

Use market volatility to make strategic gifts, potentially reducing your taxable estate while benefiting your beneficiaries.
We can help

No matter your financial position, incorporating sound tax and wealth advisory could help you achieve more. We are here to guide you to a more comprehensive approach.

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