Monday Takeaways: The 3 Market Signals That Reveal What’s Coming Next

Shah Gilani|June 16, 2025

The market just gave us a master class in resilience…

When missiles started flying this weekend, most investors expected the worst…

But the market’s response revealed something crucial about the current bull run.

I’ve been through enough geopolitical crises to know the difference between noise and genuine threats to your portfolio.

This weekend’s events fall into a very specific category that historically leads to surprising outcomes for prepared investors.

Plus, there’s a behind-the-scenes development with Q2 earnings estimates that could amplify whatever happens next.

Click on the image below to discover why this “crisis” might actually be setting up the next major move.

Transcript:

Hey, everybody. Shah Gilani here with your Monday takeaways.

Wow. A lot of stuff happening.

But the big takeaway from last week was what happened on Friday, which was a combination of a rather boring week where stocks were working their way higher trying to get to new highs. The S&P was at one point just 1.3% away from all-time highs. And then on Friday, Israel attacked Iran’s nuclear facilities, killed some of their nuclear scientists, and things just went downhill. The takeaway from that isn’t the political side of it or the speculation of where it could go, but the immediate takeaway was what the market did and then didn’t do.

It didn’t absolutely collapse. Yes, stocks traded down on Friday on the news, but really, we didn’t see horrible losses. We saw rather contained losses, in my opinion, given the fact that we’re going into a weekend and missiles were sure to fly, which they did.

So the takeaway was that stocks looked pretty darn resistant given the fact that there was a full-on attack by Israel on Iranian nuclear facilities – and I’m going to say Iran, period. So that’s the most important takeaway. When it comes to war, everybody gets nervous. Everybody thinks markets are going to discount what could happen, but they generally don’t.

They generally double discount, which is: well, this too isn’t about earnings yet. And if it’s not going to become about earnings, it’s a theater dust-up. If it’s a theater war, then it doesn’t have international implications and doesn’t have earnings implications. The markets cough, check their temperature, and move on.

And we’re seeing that already this morning with the futures bouncing. So we’re looking at Nasdaq futures up 0.85%, S&P up 0.67%, the Dow’s even up, and bonds holding in there. We didn’t see a flight to quality. We didn’t see a crazy flight to quality on Friday.

That’s another huge takeaway. There was no panic in terms of “let’s rush into bonds for a safe haven trade to park money, and we don’t want to be in stocks. We don’t know what we want to do. We don’t know what’s going to happen. Let’s just park money in Treasuries.” Didn’t happen. So another takeaway was no panic really over what happened in terms of Israel attacking Iran. So markets this morning are moving on.

Thank you so much. Now anything can happen because it is a war. But yes, Iran fought back. Yes, Iran launched cruise missiles. More than a few of them hit Israel.

So far, damage is not great in terms of the amount of devastation, but there are certainly lives that have been lost in Israel and, of course, in Iran.

But the world seems to be holding its breath that this perhaps will not continue much longer. Nobody knows. But the takeaway from the market’s reaction is no flight to quality into U.S. bonds, no flight from the stock market.

And this morning, Monday, after the weekend, people are trying to buy the low from the sell-down from last week, which makes sense because, again, we are inches away from all-time record highs. That being said, it’s not going to be a very busy week. We have the Fed meeting tomorrow and Wednesday, their statements, and we will find out perhaps that they change the dot plot. I think the takeaway to expect from the Fed meeting is a lot of nothing.

Will they address the fact that so far inflation numbers – PCE, CPI, and even producer price index, PPI – didn’t really show a bump in anything that was expected? Because we were supposed to see tariff prices, tariff inflation, work its way into both PCE and CPI, but it didn’t happen. It was a nothing burger.

So the trend looks good in spite of what the expectations were, which were not good. The takeaway there is: is there room for the Fed to cut?

I don’t think so. Not yet. Later? Maybe. If we get to 2% on inflation and we don’t get the tariff inflation, which a lot of people say it’s just going to take time, but we are going to get it.

But markets look at what they have to deal with right now. And right now, they don’t see it. And hence, the positivity and the willingness this morning to buy futures and bid up stocks going into the day. So otherwise, it’s not going to be a busy week.

Most of the earnings are out. There are some earnings, of course, this week, but a trickle of earnings. Most earnings are out. It’s hard to believe that come July – not too far from now – we’re going to start to get second quarter earnings. The takeaway on second quarter earnings from analysts is that they have been cutting their growth estimates for earnings for Q2 pretty radically.

Right now, the mixed blend for, say, across-the-board stocks looks like we’re close to 13% earnings growth in the first quarter year over year. So pretty healthy first quarter in terms of earnings growth. The analysts right now, the consensus average estimate is a cut for earnings growth in the second quarter to be something like 6%. So we’re talking half of what we have actually seen in the first quarter.

So again, this is analyst estimates and the consensus is cut, cut, cut, cut, because they’re expecting pass-through of tariff inflation. They’re expecting a slower economy. They’re expecting a lot of stuff, and they’re cutting earnings because they just look too good maybe. But the takeaway there is this makes for a lower bar for stocks going forward to traverse.

Investors who look at that think: well, if expectations are getting cut and then companies beat, then those stocks will look good again. And so maybe they’re holding on now in anticipation that the market will hold up, get to new highs, there’ll be money coming in off the sidelines, and it’s all good.

That’s pretty rational, I think. I’m going to say that’s a rational takeaway.

It’s certainly my takeaway. I don’t know if it’s yours, but you might want to consider it. Those are the takeaways for your Monday. I’ll catch you guys next week. Cheers, everybody.