HOTLINE
Hotline Archive
July 25, 2025
This is John Bonnanzio with a Fidelity Monitor & Insight Hotline update for Friday evening, July 25.
On Monday July 28, we will make the following Model Portfolio trades:
In the Unique Opportunities Model, we will sell our entire position in Telecom & Utilities [FIUIX] and purchase Small Cap Growth Index [FECGX] with the proceeds.
In the Select Model, we will sell our entire stake in Select Utilities [FSUTX] and purchase Select Biotechnology [FBIOX] with the proceeds.
In the Growth Model, we will sell our entire position in Telecom & Utilities [FIUIX] and purchase Mid Cap Stock [FMCSX] with the proceeds.
In the Growth & Income Model, we will sell our entire position in Telecom & Utilities [FIUIX] and purchase Low-Priced Stock [FLPSX] with the proceeds.
In the Income Model, we will sell our entire position in Telecom & Utilities [FIUIX] and purchase Low-Priced Stock [FLPSX] with the proceeds.
In the Annuity Sector Model, We will sell our entire position in VIP Utilities [FXRRC] and purchase VIP Health Care [FPDRC] with the proceeds.
In the Annuity Growth Model, We will sell our entire position in VIP Utilities [FXRRC] and purchase VIP Mid Cap [FNBSC] with the proceeds.
While we’ll have more to say about these trades in the August newsletter, in broad terms we see less need to be defensive because of the weak dollar (it’s down almost 8% this year in trade-weighted terms). A lower greenback stands to boost earnings for exporters and companies with foreign operations alike, potentially offsetting any headwinds from higher tariffs.
There are no other model portfolio trades advised.
The S&P 500 scored its fifth consecutive high on Friday, and it did so without much help from the Magnificent Seven technology disruptors.
Instead, upward market momentum has been broadly driven by solid second-quarter earnings. Following a period when share-price appreciation had been outpacing earnings growth (thereby raising price-to-earnings valuations), this time around it is stocks that are meeting or exceeded earnings expectations that are being rewarded. (The converse has also been true.)
Investors are also feeling better about White House policy. Indeed, several new trade accords (most prominently one with Japan) have not seen reciprocal tariffs going as high as initially expected. Further, the Trump Administration is showing a willingness to allow large mergers and acquisitions to move forward -- though sometimes with political provisions as add-ons.
Finally, market participants are being comforted by generally healthy economic data. “Lowish” unemployment is helping to keep consumers’ heads above water, meaning manageable default rates on everything from car loans to vacations. In turn, bank earnings have been good and are expected to remain that way for the next two quarters.
For the week through Friday’s close, the Nasdaq Composite rose 1.0% versus gains of 1.5% and 1.3% for the S&P 500 and Dow Industrials, respectively. And, for the most part, small- and mid-caps stocks fared well amid growing expectations that the trade pacts will benefit these areas of the market by removing barriers to selling U.S. goods abroad: the Russell 2000 gained 0.9% and the mid-cap gauge advanced 1.4%.
Overseas, Japanese stocks soared on news of a U.S.-initiated trade accord; the Nikkei rose 4.1%. During the same period, China’s Shanghai popped 1.7%, while emerging market stocks continued to rally: they jumped 2.0% this week and have now risen nearly 18% for the year-to-date.
As for Europe, the Stoxx 600 advanced a modest 0.5% while London’s FTSE 100 gained 1.4%.
Inventory buildups and easing Mideast tensions contributed to oil prices retreating. West Texas Intermediate fell 3.4% from last week, having last traded at $65.04 a barrel.
In the fixed-income arena, Treasurys maturing in 5-plus years saw their yields fall modestly, while short-term bills and notes rose ever-so-slightly. With bond prices moving inversely to their yields, the benchmark 10-year Note ended the week at 4.40% - a rise of four basis points.
| Our model performance as of Friday's close is listed below: | ||
|---|---|---|
| Week | YTD | |
| S&P 500 | + 1.5% | + 9.4% |
| Barclays US Aggregate Bond | + 0.4% | + 3.5% |
| Income Model | + 0.7% | + 5.6% |
| G&I Model | + 1.1% | + 7.8% |
| Growth Model | + 1.6% | + 10.3% |
| Select System | + 1.2% | + 11.8% |
| Unique Opportunities Model | + 1.6% | + 9.4% |
The August issue will be posted on our website Friday evening August 1, alongside our regularly scheduled Hotline update.
Fidelity Monitor & Insight's Hotline is updated on Friday evenings or whenever the Dow moves 1,000 points or more in either direction.