Bob’s Journal 7/24

The Stock Market’s Winners are Changing

Several major stock indexes are near historic highs. But some other indexes, as well as many sectors and individual stocks, aren’t doing as well.

The S&P 500, Nasdaq 100 and Nasdaq Composite all closed last week near or above their highs. But the Dow Jones Industrial Average is well behind them and recently stalled.

Smaller company stock indexes, such as the Russell 2000, are doing even worse. The Russell 2000 closed about 10% below its recent high. Smaller company stocks have lagged well behind the large company stock indexes for years.

The sectors within the major indexes have stark performance differences. Only three sectors closed within 1% of their 52-week highs last week, according to Bespoke Investment Group — utilities, technology and industrials.

Another three sectors closed between 1% and 5% below their 52-week highs — financials, communication services and consumer staples. That leaves over half of the sectors more than 5% below their highs. Health care is the biggest laggard, closing almost 17% below its 52-week high. Energy was second-worst with an 11.7% decline.

Another development this year is that the Magnificent Seven stocks no longer are a monolith. The stocks are taking different paths.

In recent years the major indexes, such as the S&P 500, have been driven by the performances of Amazon.com (AMZN), Alphabet (GOOGL), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA).

Since 2023 those stocks rose together, and by much higher percentages, than the rest of the market.

NVDA, MSFT and META continued their strong returns in the first half of 2025. AMZN and GOOGL hovered around unchanged.

AAPL and TSLA fell, losing 15% to 20% in the first half. For several months, TSLA was down more than 40%.

The stocks have been driven largely by fundamentals. The group surged together initially because they seemed to be leading the way on artificial intelligence (AI) and technology in general.

More recently, about half the group continues to benefit from their AI efforts and optimism about AI. The others are either perceived as lagging in AI developments or have other issues that are holding back their stocks.

The seven stocks did so well in recent years that they are a substantial portion of the S&P 500. The performance of the group will dictate the index’s returns until a rotation to new leaders takes hold.

Why Most Investors Lose Money on Digital Assets and How to Avoid That Fate

Bitcoin recently hit an all-time high. Last week, Congress passed legislation that’s friendly to digital assets, and additional favorable legislation is on the way.

Yet, Bitcoin and other digital assets have been a landmine for most investors.

A higher percentage of digital currency investors report they lost more money than they report profiting from the investments, according to a LendingTree survey. About 38% of digital currency investors said they sold at a loss.

Congress recently passed the Genius Act, which creates standards and rules for stablecoins. A stablecoin is a digital asset that is backed by cash or near-cash, such as treasury bills. President Trump is expected to sign the bill into law.

The House of Representatives passed two other bills that are expected to make digital assets more attractive. One law creates rules for digital asset infrastructure firms, such as brokers, exchanges and issuers. The other bill prevents the U.S. Treasury from issuing its own digital currency.

Both of those bills will be considered by the Senate.

In addition, the Trump administration has issued regulations that are friendly to digital assets.

There are several reasons why investors lose money on digital currencies and digital assets. Most don’t understand the sector.

There are significant differences between Bitcoin and other digital currencies and assets. It’s a mistake to consider meme coins, NFTs (nonfungible tokens) and other digital assets to be the same as Bitcoin. The companies that make up the digital asset infrastructure also are often misunderstood by investors.

The misunderstandings and widespread misstatements about digital assets are why I presented a comprehensive review and explanation of digital currencies and assets in the May 2024 episode of the Spotlight Series.

Another reason investors lose money in digital assets is they buy and sell at the wrong times.

They follow headlines and buy after the assets are making new highs. Prices of digital assets are volatile, and these investors sell after prices fall. They also put too much money at risk in these assets.

We added a Bitcoin ETF and an ETF that invests in digital asset companies to our portfolios earlier this year. We purchased after prices sank below all-time highs that were set in late 2024. I also recommended small allocations to the assets.

We’re going to hold these ETFs for some time. Successful investors in these assets hold them over the long-term. Data indicate Bitcoin hasn’t declined over any four-year period, even when starting at a previous record high.

Portability of Estate Tax Exemption Between Spouses Isn’t Automatic

A common misunderstanding about the portability between spouses of the lifetime estate and gift tax exemption can lead to problems.

Each individual has a lifetime exemption from the estate and gift tax, which is $13.99 million in 2025 and will rise to $15 million in 2026.

An individual’s unused exemption can be passed to a surviving spouse, which is known as portability. That’s why it’s frequently said that a married couple has an exemption that’s double the individual exemption.

What’s often overlooked is that passing the unused exemption amount to the surviving spouse isn’t automatic. The estate executor must elect to pass on the unused exemption.

The election is made by the timely filing of an estate tax return for the deceased spouse. No special language is needed.

The IRS considers the portability option to be elected if an estate tax return is filed, unless there’s a statement saying that the unused exemption amount isn’t being transferred to the surviving spouse.

To transfer the unused exemption amount, the estate tax return must be filed even if one isn’t otherwise required and the estate’s value is far less than the deceased spouse’s exemption amount.

An estate recently learned about this the hard way.

The wife passed away with an estate valued at less than the exemption amount. The executor obtained an extension of the deadline for filing the estate tax return. But the executor didn’t file the return until well after the new deadline.

The husband died two years after the wife. His executor filed an estate tax return claiming his exemption amount plus the unused portion of the late wife’s exemption. The IRS denied the use of the late wife’s exemption amount, and the Tax Court agreed.

The wife’s estate tax return wasn’t properly filed, because it was late. In addition, required information was missing, such as an itemization of the estate’s assets and the fair market values of the assets on the date of her death.

If there’s any possibility a surviving spouse’s estate might exceed that spouse’s lifetime exemption amount, the executor of the estate of the first spouse to pass away should file an accurate, timely estate tax return to preserve any unused exemption amount for the surviving spouse.

(Estate of Rowland v. Commissioner, T.C. Memo 2025-76)

The Data

The Leading Economic Index from The Conference Board fell by 0.3% in June to 98.8. It was unchanged in May.

The index declined 2.8% in the first half of 2025. That’s worse than the 1.3% fall in the second half of 2024.

The Conference Board said the index triggered its recession signal each of the last three months, as it did for much of 2022. But the group said it isn’t forecasting a recession. Instead, it anticipates real gross domestic product (GDP) growth in 2025 will be low at 1.6%.

In the first half of July, the Consumer Sentiment Index from the University of Michigan rose to 61.8 from 60.7 at the end of June. If it holds through the end of the month, the mid-July reading will be the highest since February.

The Philadelphia Fed Manufacturing Index rose to 15.9 in July from -4.0 in June.

By contrast, the Richmond Fed Manufacturing Index dropped to -20 in July, its lowest level since September 2024 and second-lowest level since May 2020. It was -8 in June.

Retail sales increased 0.6% in June after declining 0.9% in May. The 12-month increase in retail sales was 3.9% through June and 3.3% through May.

Excluding gasoline and vehicle sales, retail sales advanced 0.6% in June and were unchanged in May.

Existing home sales fell 2.7% in June after rising 1.0% in May. The number of existing homes sold in June was the lowest since October 2024.

The median sale price of an existing home in June was $435,300, 2.0% higher than 12 months earlier and a record high. The data go back to 1999 and prices aren’t indexed for inflation.

Optimism among home builders increased slightly in July, according to the Housing Market Index from the National Association of Home Builders. The index rose to 33 from 32 in June, which was the lowest level since December 2022.

Housing starts jumped 4.6% in June after falling 9.7% in May. The increase was in multifamily housing units. Their starts increased 30.6% in June. Single-family home starts fell by 4.6%.

New unemployment claims declined by 7,000 to 221,000, the lowest level since April.

Continuing claims, which lag a week behind new claims, increased to 1.956 million, tied for the second-highest level since 2021, from 1.954 million.

The Markets

The S&P 500 rose 1.08% for the week ended with Tuesday’s close. The Dow Jones Industrial Average gained 1.13%. The Russell 2000 increased 2.03%. The All-Country World Index (excluding U.S. stocks) added 1.54%. Emerging market equities advanced 1.54%.

Long-term treasuries gained 1.78% for the week. Investment-grade bonds increased 1.22%. Treasury Inflation-Protected Securities (TIP) added 0.89%. High-yield bonds gained 0.81%.

In the currency sector, the U.S. dollar declined 1.24%.

Energy-based commodities increased 0.89%. Broader-based commodities rose 1.35%. Gold advanced 3.06%.

Bob’s News & Updates

A recent review on amazon.com of my latest book said, “Carlson is a unique national asset while alive! Get the book, dude!” Look for “Retirement Watch: The Essential Guide to Retiring in the 2020s” (Regnery Capital: 2023) at amazon.com, barnesandnoble.com, booksamillion.com, and regnery.com.

My previous book, “Where’s My Money: Secrets to Getting the Most out of Your Social Security,” is receiving mostly five-star reviews on Amazon for telling you clearly what your benefit options are in different situations and how to determine the best choice for you. You can find it on amazon.com or Regnery.com.

The number of regular viewers for my Retirement Watch Spotlight Series continues to increase. You should sign up because I make in-depth presentations of key retirement finance topics. You can watch these online seminars from the comfort of your home or office at times you choose. To learn more about my new Spotlight Series, click here.

A recent five-star review of my book, “The New Rules of Retirement” on amazon.com, said, “A complete retirement guide! One of the best books on this topic!” Click for more details about the revised edition of “The New Rules of Retirement.”

If you’re interested in my books, check my amazon.com author’s page.

I’m a senior contributor to the Forbes.com blog. You can view my contributor page here.