The following is your June 2025 Robertson Stephens Monthly Performance Report.
As you’ll see, the final month of the first half of the year closely mirrored the first in terms of market performance. The middle months proved far more challenging, as investors wrestled with uncertainty around tariff policy and war in the Middle East. In both cases—at least so far—worst-case fears have not materialized, likely due to the continued resilience in hard economic data. Whether the 90+ day tariff pause merely delayed signs of persistent inflation and slowing growth, as suggested by mid-period soft data, remains to be seen.
Looking ahead to the second half, it seems unlikely markets will maintain the pace of Q2’s rebound—but then again, few anticipated Q2’s strength to begin with.
With the S&P 500 and Nasdaq reaching new highs, the overall market message remains constructive—though not without caution. Sentiment has returned to complacent, even overly optimistic levels (typically a bearish signal), and we’ve yet to see broad confirmation of new highs across sectors, indices, and participation metrics (breadth/Advance-Decline data). If those confirming signals emerge in Q3, they would support a higher level of conviction in the current, cautiously bullish outlook.
As you know, I’ve long valued the insights of two independent research firms: Ned Davis Research and BCA Research. I’ve also kept you updated on the views of Jeffrey Gundlach at DoubleLine (brilliant, though not independent), and going forward, I’ll be incorporating commentary from Torsten Slok, Chief Economist at Apollo Capital. He’s also not independent, but I’ve yet to detect any bias in his work.
As a contrarian by nature, I’m not thrilled that all four of these sources share a similar base case for the second half: stubborn inflation, a non-expanding economy (at best), and a non-zero chance of recession—ranging from 25% to 60%. That alone is a red flag for a risk manager. Another is a richly priced market set against a backdrop of stagnation. While Q2 made conservative allocations look off the mark, these risk signals compel me to maintain our current posture: high cash, lower risk.
Be well,
Mike
Sources: Addepar, Apollo Capital, BCA Research, Bloomberg, DoubleLine Capital Ned Davis Research