Credit-risky financial assets performed well again in June as worries over tariffs and other risk factors dissipated.
Recent market surveys suggest higher levels of anxiety in the manufacturing sector related to tariffs, but that has yet to translate into material weakness in hard economic data.
There have been emerging signs of labor market cooling, but it’s still too soon for most Fed leaders to diagnose a material shift.
June was another strong month for credit-risky assets with the Liberation Day turmoil further in the rearview mirror.
The S&P 500 generated a 5.08% return last month, bringing the two-month return to 11.7%. As will be discussed in more detail throughout this commentary, fixed income credit also performed very well in June amid strong investor demand. Recent trading activity would suggest limited market worries about looming tariff risks to growth in the U.S. economy. However, the July 9 expiration of the 90-day pause of “reciprocal” tariffs for most trading partners presents some uncertainty.
The June Institute for Supply Management (ISM) Manufacturing survey suggests that sector’s businesses might be more anxious at this point than market participants. Within the responses, there were 3.2 companies reducing employee headcount for every one company hiring, one of the worst ratios since ISM began tracking employment comments, according to the report.
As we have noted in recent commentaries, soft data (e.g., surveys) doesn’t always evolve into hard data (actual economic impact), but there is clearly heightened anxiety surrounding trade policy and, to a lesser extent, immigration policies for manufacturers.
Jason Haley joined ALM First in 2008 and is the firm’s chief investment officer. He heads ALM First’s Investment Management Group (IMG), which is responsible for leading the investment process and investment theme development. Haley also oversees all capital markets activities, including portfolio management, trading, market research and commentary, and execution of hedging and funding strategies for the firm’s depository clients. He holds an MBA with a concentration in finance and a BBA with a concentration in marketing, both from The University of Mississippi.
Not an offer for investment advisory services. This content is provided for general educational information and market commentary purposes only.
July 21, 2025
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A Strong Month For Credit-Risky Assets. Higher Levels Of Anxiety In Manufacturing.
Top-Level Takeaways
June was another strong month for credit-risky assets with the Liberation Day turmoil further in the rearview mirror.
The S&P 500 generated a 5.08% return last month, bringing the two-month return to 11.7%. As will be discussed in more detail throughout this commentary, fixed income credit also performed very well in June amid strong investor demand. Recent trading activity would suggest limited market worries about looming tariff risks to growth in the U.S. economy. However, the July 9 expiration of the 90-day pause of “reciprocal” tariffs for most trading partners presents some uncertainty.
The June Institute for Supply Management (ISM) Manufacturing survey suggests that sector’s businesses might be more anxious at this point than market participants. Within the responses, there were 3.2 companies reducing employee headcount for every one company hiring, one of the worst ratios since ISM began tracking employment comments, according to the report.
As we have noted in recent commentaries, soft data (e.g., surveys) doesn’t always evolve into hard data (actual economic impact), but there is clearly heightened anxiety surrounding trade policy and, to a lesser extent, immigration policies for manufacturers.
Visit ALM First to read more about the latest economic data and monthly market trends.
Jason Haley joined ALM First in 2008 and is the firm’s chief investment officer. He heads ALM First’s Investment Management Group (IMG), which is responsible for leading the investment process and investment theme development. Haley also oversees all capital markets activities, including portfolio management, trading, market research and commentary, and execution of hedging and funding strategies for the firm’s depository clients. He holds an MBA with a concentration in finance and a BBA with a concentration in marketing, both from The University of Mississippi.
Not an offer for investment advisory services. This content is provided for general educational information and market commentary purposes only.
Daily Dose Of Industry Insights
Stay informed, inspired, and connected with the latest trends and best practices in the credit union industry by subscribing to the free CreditUnions.com newsletter.
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