Up, Up and Away!

 

The first six months of the year were a rollercoaster of ups and downs and backs and forths as the markets seesawed between highs and lows. The lows came in mid-April, shortly after April 2 – so-called "Liberation Day" – when Trump unleashed a wave of threatened tariffs on the world. The highs came both before and after Liberation Day but mainly after as all three indices set new records.

It was a nonstop blast, all right. For the record, the Nasdaq and S&P 500 were up over five percent for the six months while the Dow rose nearly four percent. Not earthshaking, but better than the alternative, especially in view of all the doomsday scenarios that rose up in response to a seeming unending series of crises.

"Nothing ever happens" is the new meme on Wall Street.

Despite wars, tariffs, spending bills, inflation, trade deficits, tax cuts – you name it – none of it seems to matter. Consumers and investors alike just shrug it off. The markets keep going up. So sit back and relax. Not to worry. In the end, it's all good.

Here's how Randy Forsyth put it in a recent Barron's piece:

But mainly, the first half gave rise to the investment meme of "Nothing ever happens," insofar as the stock market is concerned. Trade wars and the uncertain impact of tariffs on the economy; fiscal fights over the Big, Beautiful tax bill that resulted in the U.S. losing its last triple-A credit rating; and conflicts in the Middle East, including the U.S. bombing of Iranian nuclear sites on June 22. After all of that, the S&P 500 and the Nasdaq Composite are ending the first half at record highs.

And he's optimistic about the second half of the year:

Forget about the proverbial "wall of worry" that bull markets supposedly ascend. The new belief, "Nothing ever happens," is actually relevant to stocks and helped induce individual investors to buy the steep dip in April and May, putting a lie to all the hand-wringing. By halftime, the mood had swung back to FOMO, or fear of missing out.

CRYPTO & GOLD

The seemingly blasé approach of investors in the equity markets is mirrored by crypto investors, but even more so, as they seem to have a blind faith in the coins' ability to go up. Take Bitcoin, for example. It was up about 15 percent in the first half of the year. Last year it rose a whopping 121 percent! It's currently trading around $120,000.

Why bother with the equity markets when you can make money like that in crypto?

And it will only get better as the Trump Administration legitimizes cryptocurrencies of all kinds and they begin trading on real exchanges. Well, they're already trading on real exchanges and being offered by blue-chip investment houses. You can even buy a Bitcoin ETF and brag to your friends that you're now "into crypto."

Excuse me while I buy some more Coinbase (which, incidentally, is up more than 50 percent this year) and Robinhood (up 160 percent!).

The real winner of the first six months was not stocks or crypto but, amazingly, gold. That stodgiest of investments was up 25 percent – on top of a 29 percent increase in 2024 – and is currently trading at around $3,300 an ounce, an all-time record. Since when do both gold and crypto outpace equities?

Oh, and you can also buy gold as an ETF, and you don't have to tell anybody. Just keep it to yourself (like cash under the mattress, except in this case the cash is getting more valuable).

So there seem to be two different things going on here – an appetite for risk (crypto) and an desire for safety (gold). That's at the extremes, and it's okay to do both, especially since they're outpacing traditional investments. In the middle are all the rest of us, plodding along in stocks and bonds.

But that's where I want to be. I'll take my five percent in the first six months of the year – and another five percent between now and year-end – and live happily ever after.

SHIPPING STOCKS

So let's take a look at the wonderful world of maritime and see how some of these stocks did.

Not so good, actually. And not unlike most of the market, for that matter. It's been a very narrow rally, really, limited largely to Big Tech and AI. The rest of the market, including shipping stocks, has moved in a limited range.

And for good reason. Too much uncertainty, especially surrounding tariffs and trade, which directly affect shipping. If global trading volumes decline, as they will if some of the threatened tariffs go into effect, that will directly impact shipping.

So don't look for any good news regarding the container, tanker, ro-ro and bulker trades. They will likely continue to stagnate. Offshore too, despite the "drill, baby, drill" mantra, as the price of oil remains stuck in the mid-$60s and offshore wind flounders. "Nothing ever happens" has traditional shipping markets on edge – with one exception. Cruising.

Given all the strife in the world today, people are looking for an escape, and cruise lines are the beneficiary. Two in particular – Viking and Royal Caribbean – are big winners. Let's start with Viking (VIK).

The darling of Baby Boomers and the brainchild of Torstein Hagen, Viking's stock is up an impressive 30 percent so far this year and currently trades around $57. It's more than doubled from its IPO price of $24/share back in May 2024 and continues to generate solid earnings from its loyal base of affluent clients.

As you cruisers out there well know, the company pioneered river cruising in Europe, starting more than 25 years ago, and has since expanded into small ship and ocean cruising worldwide. With a fleet of nearly 100 vessels, it's consistently voted #1 in its various categories (river, ocean, expedition) by upscale publications like Travel+Leisure and Condé Nast Traveler and has won numerous awards for excellence.

It's a cruise line "For the Thinking Person" and features "Experiences created for curious travelers." It's famously noted for its TV advertising on programs like "Masterpiece Theatre" and "Downton Abbey" and was one of the first cruise lines of any type to advertise on TV.

Royal Caribbean (RCL), #2 among cruise lines in terms of size, did even better. Its stock is up more than 50 percent this year and has doubled over the last 12 months, currently trading around $315. Can it go any higher? That's the big question.

Many analysts think so and have price targets ranging as high as $400, and there are good reasons to be optimistic. It reported earnings recently and blew past estimates, earning more than $1 billion on revenues of $4.5 billion.

"The strong demand we are seeing across our new ships and land-based destinations reinforces that our strategy is working and resonating with today's traveler," noted Jason Liberty, President & CEO, in the company's earnings release. "As consumer preferences continue to evolve – toward more frequent vacations, closer-in vacation planning, and a greater focus on meaningful, experience-driven travel – our experiences are designed to meet these evolving expectations. These trends, combined with our pipeline of bold, guest-centric initiatives, position us not only to create value for our shareholders, but to continue winning share of the growing $2 trillion global vacation market."

Sounds pretty upbeat to me! RCL even pays a dividend – a small one, I'll admit (75 cents/share) – but it's the only company among the major players to do so, and it's certainly a sign of confidence.

NOTHING EVER HAPPENS

So sit back, relax. Ignore all the ups and downs of tariffs, trade, wars and ceasefires, inflation and jobs reports. The market keeps going up.

Nothing ever happens.