MARKET RECAP

• US stocks +1.49%, international stocks +1.98%, bonds +0.35%.
• The Leading Economic Index fell by 0.3% to 98.8. The index was pulled down by low consumer expectations, rising unemployment-insurance claims and weak new orders in manufacturing.
• The Nasdaq has been above it’s 20-day moving average for about 65 days, the longest such streak since 1999.
•  Other speculative signs in the market include the top 10 stocks accounting for approximately 40% of the S&P market cap, heavily shorted stocks experiencing significant gains, and an increase in stocks being bought on margin.

SCOREBOARD

MARKET RECAP

• US stocks +0.67%, international stocks +0.16%, bonds were flat.The S&P 500 closed just below a record high set on Thursday. Bitcoin hit a record on Monday, breaking $123,000, but is currently trading at around $118,000.
• Trump announced a 30% tariff on the EQ and Mexico on Thursday.
• Trump eased export restrictions on certain types of AI chips, which helped advance the market.
• Trump spoke a lot about firing Fed Chair Powell during the week, and started reviewing cost over runs on the Fed’s building project, as a way to get Powell to leave his post. But as the week went on, Trump backed off and said he wouldn’t fire him.
• Wholesale prices were up 2.3% year over year, lower than the 2.5% forecast.
• So far, earnings are beating expectations. JPM was positive about the economy.

SCOREBOARD

MARKET RECAP

• Dow was down 1%, SPX down 0.3% and the NASDAQ down 0.1%. The dollar was down to levels dating back to 2000 on the impact of Trump’s tariff moves.
• Trump is back to his crazy tariffs, threatening a 200% tariff on pharmaceutical imports and 50% on copper, sending the metal to a record high price.
• The One Big Beautiful Bill Act, passed last week, is estimated to increase the deficit by $3.3 trillion over the next decade, according to the CBO. Trump and the Republicans insist this won’t happen. In either case, both political parties continue to ignore the deficit. Small changes now can make a big difference later. However, we are not taking any action to correct the problem. And when at some future point, the situation becomes too big to ignore, it is going to be much more difficult to fix. As the late economist Stanley Fischer once said, financial crises “take much longer to develop than you expect, and then…they happen much more quickly than you expect.”
• Trump continues to go after Fed Chair Jerome Powell, in his push for lower interest rates. Blaming Powell for not lowering rates, but the Fed has held off to see the impact of tariffs on inflation. Trump would help his cause if he didn’t resume has campaign to raise tariffs to ridiculous levels, and didn’t just pass a bill that will increase the deficit by trillions.
• NVDA broke above $4 trillion in market value.

BITCOIN – Bitcoin broke through resistance and is trading at 118,800.

SCOREBOARD

MARKET RECAP

• Trump signed the “big, beautiful” bill. Right on time to the target of July 4th that he had set.
• Trump indicated that he would impose unilateral tariffs of up to 70% on August 1.
• Jobs increased by 74,000 in June, but over half of private industries cut jobs during the month. That was only the third time since April 2020 that it had happened. Businesses cited uncertainty as the reason for holding back on hires due to immigration issues and tariffs. There is also an artificial intelligence factor, hesitancy to hire if AI can do the job at some future point. The average workweek dropped by 0.1 hours to 34.2. The unemployment rate fell by 0.1 percentage points to 4.1%, but part of that decline was due to a workforce decrease of 130,000 people.
• CPI was only up by 0.1% in May, leaving one to wonder where the increased tariffs are going. Tariffs are currently running at approximately $400 billion annually, and aggregate profits of the S&P 500 are around $2 trillion. If the $400 billion is not being covered by higher profits, it means it will come from US companies or overseas vendors.

US STOCK MARKET (VTI)

SCOREBOARD