Hello and happy Sunday to everyone!

Whether it’s because of the game, the commercials or the halftime show, I know most of you are probably waiting for the Super Bowl today. I’ll be planting myself on the couch pretty soon too, so let’s run down what to expect for the week ahead before I settle into a food coma.

What We're Talking About This Week!

• Quick Hits For The Week Ahead

• Dividend Landscape

• Top 10 List

• Looking Ahead

Quick Hits For The Week Ahead

Among the major events that took place last week:

• A tariff threat

• A tariff walkback

• A non-farm payroll report that came in a little weak

• A UofM consumer sentiment report that showed a lot of concern about the path of inflation

• A modest uptick in volatility that was mostly unwound by week’s end.

Equities remain sturdy, but many asset classes still urge caution

U.S. equities plunged at last Monday’s open after President Trump announced tariffs on China, Mexico and Canada. By noon the same day, the Mexico and Canada tariffs got postponed, but the 10% China tariff went ahead on Tuesday. China announced a set of retaliatory tariffs set to go live this coming week. Finally, at the end of last week, Trump announced a suspension on tariffs for smaller packages from China, such as those from Temu.

The rapid fire nature of changing trade policies confirms for me that tariffs are going to be used as a political bargaining tool, not a means of reshoring foreign manufacturing. After an early bout of volatility, the major U.S. equity averages finished the week little changed, but gold and long-term Treasuries both added 2%. U.S. stocks seem to already be generating smaller reactions from changes in tariff policy earlier than I anticipated. This is a good thing for the markets because I don’t think tariff rhetoric at this point warrants any change in portfolio positioning. The longer-term threat of inflation due to tariffs seems much smaller at this point, but a trade war with China could still cause issues.

Gold & Treasuries are telling the right story

The S&P 500 and Nasdaq 100 are still hovering near all-time highs, so it would be easy to assume that means everything is fine, but I’m worried about what gold & Treasuries are telling us right now.

The 10-year Treasury yield has fallen more than 30 basis points in less than a month. This has happened during a period where inflation has ticked higher, survey data shows consumers worried about more inflation and the Fed unlikely to bring rates lower, if at all.

Inflation risk should be pushing rates higher. Instead, they’re moving lower. That looks more like a flight to safety pulse than anything. Plus, it’s occurred as healthcare, consumer staples, low volatility and value stocks have been outperforming.

Gold has been rallying for about two years and it’s showing little sign of slowing down.

A lot of this has been due to central banks and sovereign governments building up their gold stashes, but precious metals don’t go from $2000 and ounce to nearly $3000 for no reason. The VanEck Gold Miners ETF (GDX) and the Global X Silver Miners ETF (SIL) are both up around 50% over the past year. Gold has been one of the hottest trades and there’s still value in the gold miners.

The fact that technology is now the worst-performing sector of 2025 so far shows that 1) market breadth is improving, 2) the magnificent 7 trade doesn’t have the stranglehold on the market that it once did and 3) defensive equities are where a lot of the money is rotating into.

Inflation concerns are a bad sign for the market

The February University of Michigan consumer sentiment report told us two things:

1. Inflation expectations for the next year climbed from 3.3% to 4.3% in a single month, a one month rate of change that we’ve only seen a handful of times in the report’s history. This coincides with President Trump’s ramp-up in tariff rhetoric. It turns out that the average consumer may understand the impact of tariffs better than we thought.

2. U.S. consumer sentiment missed expectations by a fairly wide margin and hit its lowest level since last July. The drop is almost certainly linked to inflation concerns.

Inflation has been the one thing that’s sunk both stocks and bonds. So far, the actual inflation numbers have shown an uptick, but nothing major yet. If price increases begin accelerating, there’s probably easy 10% correction potential for the S&P 500.

International stocks are making a comeback

I’ve talked about this in recent weeks, but the performance gap is beginning to get larger. The S&P 500 and Nasdaq 100 are up 2.3% and 2.5%, respectively, year-to-date. But look at some of these other performance numbers:

• iShares Eurozone ETF (EZU): +7.4%

• iShares MSCI China ETF (MCHI): +6.1%

• iShares Core MSCI EAFE ETF (IEFA): +5.3%

• iShares MSCI Spain ETF (EWP): +8.9%

• iShares MSCI Germany ETF (EWG): +8.9%

• iShares MSCI Brazil ETF (EWZ): +12.0%

There are 10 developed and/or emerging market countries whose stocks are up at least 8% year-to-date. Sure, countries, including Hong Kong, India, Indonesia and Thailand are all in the red right now, there’s enough happening here to make international equities a consideration again.

The Europe recovery has been slow and drawn out. Recession risk is still there and there are outstanding questions regarding how much monetary support the ECB can provide before turning things off. But conditions are improving and coming off of a bottom, that could be the ideal time for stocks to take off. It may already be starting.

Dividend Landscape

Dividend stocks still remain in favor here as a whole, but not convincingly and without a real consensus. Dividend growth has generally done better as would be expected in a more defensive environment, but performance has been very fund-specific.

Although they’re not reflected in the graphic above, international dividend ETFs have been the class of this segment of the market. The best performer year-to-date is the Invesco International Buyback Achievers ETF (IPKW) with a gain of 7.3%. Other popular ETFs, such as the WisdomTree International Quality Dividend Growth ETF (IQDG), the WisdomTree Europe Quality Dividend Growth ETF (EUDG) and the ALPS O’Shares Europe Quality Dividend ETF (OEUR), are all up more than 6%.

I’m guessing you can sense a theme here.

Top 10 List

Let’s take a look at a handful of ETFs worth highlighting:

Vanguard Mid-Cap Growth ETF (VOT)

One of the best performing size/style combos year-to-date has been mid-cap growth. VOT is up more than 8% and is at least doubling up on many of the other groups. Mid-caps have delivered long-term above average risk-adjusted returns even though it’s not done so in recent years. The happy middle ground is making a comeback.

VanEck Morningstar Wide Moat ETF (MOAT)

Wide moat is still a great long-term strategy for a portfolio, but it just hasn’t delivered this year. Its overweight to healthcare has finally given it a boost, but its cyclical and tech exposures haven’t worked out. I’m actually a little surprised this fund hasn’t done better given its more conservative lean, but I wouldn’t give up on it yet, especially if healthcare continues to outperform.

Invesco CurrencyShares Japanese Yen ETF (FXY)

The yen has been strengthening relative to the greenback throughout 2025 to the point where it’s becoming a problem again for dollar-denominated assets. We saw the reverse yen carry trade deliver a jolt to U.S. equities in the 2nd half of last year and we’re starting to head down the same path again. If Japanese inflation remains elevated and the BoJ tilts towards hiking further, look out.

Pacer Metaurus U.S. Large Cap Dividend Multiplier 400 ETF (QDPL)

Most investors have just invested in the S&P 500 and left it at that, but other strategies are emerging. I like QDPL because it gives you most of the S&P 500 exposure, but 4x the dividend yield. Which would you rather have right now: 100% S&P 500 exposure with a 1.2% yield or 88% S&P 500 exposure with a ~5% yield? I’m leaning towards the latter.

Range Nuclear Renaissance Index ETF (NUKZ)

Clean energy has gotten raked in 2025 thanks to Trump policies, but nuclear has been the exception. NUKZ, which provides exposure to companies involved in nuclear development, is up 25% year-to-date. Its top holdings - Oklo, Constellation Energy and Cameco - alone account for roughly 35% of the fund. Given the geopolitical environment, I’m not sure I’d count on this one to last.

iShares 20+ Year Treasury Bond ETF (TLT)

As mentioned above, Treasury bonds are rallying again and I think it’s due to some flight to safety interest. The Fed may not be looking to bring rates down soon, but the macro environment is leaning towards a slowdown. History suggests it happens a few quarters after the yield curve un-inverts, which would put that around year-end. TLT would likely do quite well in that scenario.

Cambria Cannabis ETF (TOKE)

Cannabis funds have miserable track records and the negative performance has continued even as deregulation becomes a major theme. One of the bigger names ETFs, the Amplify U.S. Alternative Harvest ETF (MJUS), just closed its doors despite over $60 million in assets, a level that almost always is good enough to keep open. TOKE is the best performer of the group, but conditions still look bad.

BondBloxx CCC Rated USD High Yield Corporate Bond ETF (XCCC)

I’m not an advocate for junk bonds in the current environment, but XCCC has been surprisingly resilient. The yield has come down as the yield curve has shifted lower, but credit spreads, the real sign of trouble in this group, haven’t budged. As long as that happens, this portfolio looks good, but things can change fast. Gotta keep a close watch on this one if you choose to invest.

First Trust Rising Dividend Achievers ETF (RDVY)

RDVY has been a top tier dividend ETF this year and the back of a simple strategy - invest in companies developing a strong long-term dividend growth profile. If the current pivot to defense continues, I think this fund could be an excellent choice, even over stalwarts, such as the Vanguard Dividend Appreciation ETF (VIG).

SPDR Portfolio TIPS ETF (SPIP)

TIPS are finally starting to outperform Treasuries again, which means investors might be starting to take inflation more seriously. The move isn’t nearly what it was in the lead-up to 2022, but it’s starting to pick up steam.

Looking Ahead

Looking better for: TIPS, value, financials

Looking worse for: consumer discretionary, China, Treasury bonds

If you have any more thoughts, feel free to jump into the comments below!