Q2-2025 Client Commentary

July 3, 2025

The second quarter of 2025 was marked by significant volatility in April, as markets responded to both domestic political developments and ongoing geopolitical tensions in the Middle East and Ukraine. President Trump’s newly announced tariff policy raised concerns about higher import costs and the potential for renewed inflation in consumer prices. However, as we’ve routinely seen during past episodes of market stress, when worst-case outcomes do not immediately materialize, markets tend to recover from oversold conditions. This June 30th quarter followed that familiar pattern, with global equities rebounding and U.S. major indices posting mid-single digit gains year-to-date.

Although the tariff announcements were surprising, many publicly traded companies appear to have anticipated some of these potential disruptions and have taken steps to delay or mitigate pressures until there is greater policy clarity. We expect tax and trade policy to become more defined as the year progresses, offering further insight into the economic path forward.

Interest rates and Federal Reserve policy are increasingly in the headlines. Higher interest rates are not only an impediment to the housing industry, car industry and capital investment of every kind (typically purchased with borrowed money), but also reduce the perceived future value of making that investment today. We believe that the current environment is modestly restrictive and reflects moderating inflation while supporting continued economic strength. Though the timing of any cut in interest rates is questionable, we do not see them going up and restricting growth anytime in the near future.

When we are not reading financial statements or listening to company conference calls during earnings season — which lasts roughly four months of the year — we often delve into trade journals and scientific research. These labors never grow dull for us, as we are always seeking new insights to better serve our clients. For example, last month we came across an AI-driven app called Purposeful, created by Vic Strecher, Ph.D., a professor at the University of Michigan. The app is designed to help people struggling to find meaning in their lives. We found the neuroscience behind it fascinating will share a quote from Dr. Strecher that resonated with us:

"Even amidst adversity and societal upheavals, such as the pandemic, it's purpose that directs people toward altruism over fear, and solidarity over isolation."

Despite the concerning headlines, we continue to believe in the long-term, secular drivers of innovation — particularly in financial technology and data-driven industries. These areas remain fertile ground for attractive investment opportunities. While we remain vigilant in analyzing unfolding developments, our outlook for the remainder of the year is one of cautious optimism.

As a new initiative, we’ve begun participating in iHeart Radio’s Ask the Experts weekly program, which airs live every Tuesday at 8:00 a.m. on WIBA AM 1310 in Madison. Recordings are also available on iHeart Radio available at https://www.iheart.com/podcast/53-wisconsin-capital-managemen-283385670  or wherever you get your podcasts.

All of us at Wisconsin Capital Management wish you a safe and enjoyable summer and remember not to point or put fireworks in your hands.

Warm regards,

The information presented in this newsletter is the opinion of Wisconsin Capital Management, LLC and does not reflect the view of any other person or entity.  The information provided is believed to be from reliable sources, but no liability is accepted for any inaccuracies.  This is for information purposes and should not be construed as an investment recommendation.

Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark.

Opinions expressed are those of the author and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Past performance is not indicative of future performance, and all investments are subject to risk of loss. See Wisconsin Capital Management’s Form ADV Part 2A and Form CRS at https://www.wiscap.com/ for additional information about our business practices and conflicts identified.

Advisory services offered through Wisconsin Capital Management, LLC, an Investment Advisor registered with the U.S. Securities & Exchange Commission.

All registered investment advisers have the same fiduciary duty as Wisconsin Capital Management, LLC.