Another quarter-year is in the books and markets both crashed and rallied in the short span of three months. What started out on April 2 as a full-blown market meltdown due to trade tariff announcements on imported goods, quickly morphed into a furious rally sending stocks up nearly ten percent for the period 1, with some indices rising even more 2.

Uncertainty reigned first as tariffs, which are generally regarded as a headwind for economic growth and corporate profits, caused the stock market to react negatively. The violent market reaction quickly gave way to huge rallies as the President backed off his initial threats and appeared ready to negotiate. Many market forecasters predicted the tariffs would create great turmoil and selloffs, but as the second quarter unfolded, many of those same experts revised their models and began predicting positive returns for stock markets. Another factor was that economic data such as unemployment, inflation and corporate profits remained in solid territory, indicating that the economy is, so far, staying healthy.

Another reason for good results could be certainty. Just as the third quarter opened, Congress passed, and the President signed the One Big Beautiful Bill Act (OBBBA), codifying it into law. While there are many parts of this nine-hundred-plus page legislation, the bill provides long-term certainty on taxes. Taxes changed in 2018 under the Tax Cuts and Jobs Act (TCJA) however, many of those changes were slated to ‘sunset,’ or expire at the end of this year. The OBBBA extends most of those changes and makes them permanent, creating certainty regarding tax policy for the next few years. In our opinion, markets ‘prefer’ certainty to uncertainty as the latter makes it more difficult to invest for tomorrow. Changes from the TCJA that have been extended include: corporate tax rates remain at twenty-one percent, pass-through entities keep their twenty percent deduction (for some businesses), and lower individual income tax rates are continued. New changes in OBBBA include a partial restoration of the state and local tax (SALT) deduction by increasing it up to forty thousand dollars a year from ten thousand dollars (but only if you earn less than five hundred thousand dollars per year), a change to the taxation of gratuities (or tips) for some service workers, estate tax exempt amounts increased to fifteen million dollars per person or thirty million dollars per couple, and a new limitation on charitable deductions that requires they exceed one-half of one percent of adjusted gross income for taxpayers that itemize, or if they take the standard deduction, a limit of $1,000 per person applies 3.

The new law, and the certainty it provides, offers opportunities to plan for wealth transfer, business investment and long-term tax planning. As advisers, we encourage you to consider decisions on estate and gift planning, retirement, and charitable planning now that the law is set. Estate and gift planning can provide benefits beyond just tax savings, such as creditor protection, business succession planning, special needs planning and philanthropic goals. We are delighted to help you with these decisions. We have recently upgraded our financial planning software suite, and can now model future scenarios for retirement planning, estate planning and other financial decisions you may be considering.

As always, we are here to help you find your way through whatever arises in your financial life - be it certain or uncertain. Please contact us with any changes to your situation and enjoy your summer!

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Regards,

Scott Lasky, CFP®

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1- S&P 500, Q2, 2025, Source, S&P, 2- NASDAQ market Q2, 2025, Source NASDAQ 3- Source U.S. Congress

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Disclosures All statements are opinions and should not be construed as facts. This newsletter is for informational purposes only and should not be deemed as a solicitation to invest or increase investments in Lionshead Wealth Management’s products or affiliated products. The information provided is for educational purposes. Your advisor does not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions. Further, your advisor makes no warranties with regard to such information, or a result obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.All investment strategies have the potential for profit or loss; changes in investment strategies, contributions or withdrawals may materially alter the performance and results of a portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's investment portfolio.  Lionshead Wealth Management is registered as an investment adviser and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement of the firm by securities regulators nor does it indicate that the adviser has attained a particular level of skill or ability.
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