Bloomberg surveys 19 of the largest Wall Street research firms for their market outlooks. In an article on August 14, 2025, Bloomberg reported that only 2 of 19 did not turn cautious and revise their outlooks downward after the sharp market drop in early April. Add ICON to that short list of 2, as we stayed bullish to participate in the sharp recovery. The 1500 Index is up 30.19% off the April 8 low. In May, a couple of weeks after the low we wrote, “We do not know what the market’s path will be like this time; we just believe April 8, 2025, will prove to be the low.”
On June 27, the S&P 1500 Index reached a (then) all-time high. In our mid-year Portfolio Update, we wrote: “When the market reaches an all-time high, many investors wonder, ‘Is it too high?’” We don’t think so as we still see stocks, on average, priced below our estimate of fair value. In addition, we do not see the behaviors that often accompany peaks.” Since then, the index chugged a little more than 2% higher in each of the next two months, July and August. Through August of this year, the index is up 10.3%.
Information Technology is the best-performing sector index off the April 8 low, but that is due to its initial recovery surge. That sector cooled off in August as it was the second-worst-performing sector index. Just the opposite, Healthcare is the worst performing sector index off the April 8 low, but it came alive in August to be the second-best performing sector for the month. We do not read much into these monthly reversals as they are likely due to tariff threats and negotiations, and Fed policy guessing. We like our sector positioning with a tilt toward economically sensitive, cyclical sectors and away from the so-called recession-proof, defensive sectors.
Bonds
Also, in the mid-year Portfolio Update we wrote: “Since mid-February, the yield on the 10-year Treasury has been in the range of 4.0% to 4.6% and finished the first half of the year about in the middle of that range at 4.24%. This seems sensible to us as we don’t see any reason for a big move, or breakout, in either direction.” The 10-Year Treasury finished August at 4.23%. This range still seems sensible to us.
The S&P 1500 hit an all-time high on August 28, 2025, and then backed off a little on the last trading day of the month. We do not see stocks, on average, to be over-priced, and we do not see the behaviors that often accompany market peaks. We believe the market can move higher over the next year.
The data quoted represents past performance, which is no guarantee of future results. Opinions and forecasts regarding sectors, industries, companies, countries and/or themes, and portfolio composition and holdings, are all subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security, industry, or sector.
Investing in securities involves inherent risks, including the risk that you can lose the value of your investment. An investment concentrated in sectors and industries may involve greater risk and volatility than a more diversified investment. Investments in international securities may entail unique risks, including political, market, regulatory, and currency risks. In general, there is less governmental supervision of foreign stock exchanges and securities brokers and issuers. Investing in fixed-income securities such as bonds involves interest rate risk. When interest rates rise, the value of fixed-income securities generally decreases.
Individual account holdings and composition may vary. Opinions and forecasts regarding sectors, industries, companies, countries and/or themes, and portfolio composition and holdings, are all subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security, industry, or sector.
ICON’s value-based investing model is an analytical, quantitative approach to investing that employs various factors, including projected earnings growth estimates and bond yields, in an effort to determine whether securities are over- or underpriced relative to ICON’s estimates of their intrinsic value. ICON’s value approach involves forward-looking statements and assumptions based on judgments and projections that are neither predictive nor guarantees of future results. Value readings are contingent on several variables including, without limitation, earnings, growth estimates, interest rates, and overall market conditions. Although valuation readings serve as guidelines for our investment decisions, we retain the discretion to buy and sell securities that fall beyond these guidelines as needed. Value investing involves risks and uncertainties and does not guarantee better performance or lower costs than other investment methodologies.
ICON’s value-to-price ratio is a ratio of the intrinsic value, as calculated using ICON’s proprietary valuation methodology, of a broad range of domestic and international securities within ICON’s system as compared to the current market price of those securities. According to our methodology, a V/P reading of 1.00 indicates stocks are priced at intrinsic value. We believe stocks with a V/P reading below 1.00 are overvalued while stocks with a V/P reading above 1.00 are undervalued. For example, we interpret a V/P reading of 1.15 to mean that for every $1.00 of market value, there is $1.15 of intrinsic value which has not yet been realized in the market price.
The unmanaged Standard & Poor’s Composite 1500 (S&P 1500) Index is a broad-based capitalization-weighted index comprising 1,500 stocks of Large-cap, Mid-cap, and Small-cap U.S. companies. The unmanaged Standard & Poor’s (S&P) Composite 1500 Sector Indexes track the performance of sectors that comprise the S&P Composite 1500 Index. Total return figures for the unmanaged sector indexes do include the reinvestment of dividends and capital gain distributions but do not reflect the costs of managing a mutual fund. The Standard and Poor’s (S&P) 1500 Consumer Discretionary Index is an unmanaged capitalization-weighted index comprising companies in the Consumer Discretionary sector as determined by S&P. Total returns for the unmanaged index include the reinvestment of dividends and capital gain distributions beginning on January 1, 2002. Index returns with reinvested dividends and distributions are unavailable prior to that date. The Standard and Poor’s (S&P) 1500 Financials Index is an unmanaged capitalization-weighted index comprising companies in the Financials sector as determined by S&P. The Standard and Poor’s (S&P) 1500 Information Technology Index is an unmanaged capitalization-weighted index comprising companies in the Information Technology sector as determined by S&P. The Standard and Poor’s (S&P) 1500 Materials Index is an unmanaged capitalization-weighted index comprising companies in the Materials sector as determined by S&P. The Standard and Poor’s (S&P) 1500 Industrials Index is an unmanaged capitalization-weighted index comprising companies in the Industrials sector as determined by S&P. Total returns for the S&P 1500 Industrials Index include the reinvestment of dividends and capital gain distributions beginning on January 1, 2002. Index returns with reinvested dividends and distributions are unavailable prior to that date. The Standard and Poor’s (S&P) 1500 Utilities Index is an unmanaged capitalization-weighted index comprising companies in the Utilities sector as determined by S&P. Individuals cannot invest directly in an index.
The 10-year yield is the benchmark 10-year yield to maturity reflected by the current issue 10-year U.S. Treasury note.
Sources: Bloomberg
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