Weekend Update, July 7th, 2025
Index, sector & asset Performance
The S&P 500 extended its new ATH run last week, climbing +1.7% to finish at a high of 6,279. The Nasdaq Composite gained +1.6% to close at a record of 20,600. Tech and financial stocks led the rally. Nvidia rose to another record, rallying +1% last week. Year to date laggard, Apple rose +6.2%, lifted by reports that it may outsource AI development to power a new version of Siri. U.S. stocks are up +5% in June, +7% on the year and +13% from a year ago. Retruns last week per Goldman Sachs.
July tends to be a positive month in the markets because of previous seasonal behavior discussed during the first year of the presidential term. Seasonality, the market tends to peak the first two weeks of August for summer and early fall.
The US has reached a deal with the UK, China and Vietnam and is hopeful it can reach one with the EU ahead of Thursday’s tariff pause deadline. Over the weekend, the President and his administration upped the rhetoric for the need for more trade deals before August.
Summer shopping is around the corner. Amazon (July 8) and Walmart are both launching extended summer sales events/Prime-Days, signaling higher competition.
President Trump’s new tariffs targeting specific countries will take effect August 1, with negotiations ongoing and potential market impact. Commerce Secretary Howard Lutnick confirmed that President Trump’s new tariffs targeting individual countries will take effect August 1, providing some extra time for negotiations.
Every sector rose except communication services rose this week. Materials led gains climbing +3.7%, followed by gains of +2.4% in technology and financials and a +2.1% rise in energy. Industrials, real estate, consumer staples and health care also rose more than +1% each.
The materials sector’s top gainers included shares of Packaging Corp. of America as the company said it agreed to buy the containerboard business of industrial packaging products maker Greif.
In the technology sector, solar stocks rebounded sharply with FSLR gaining +22%. Some analysts believe that the President’s budget has near term and potentially long-term demand” for First Solar.
Communication services, the lone sector in the red, slipped -0.2%. Shares of Facebook led the drop-in communication services, falling -2% on the week. The company is reorganizing its artificial intelligence group with a focus on developing AI “superintelligence,” referring to systems that can perform tasks as well as or better than humans.
Over the weekend, TSLA CEO Elon Musk announced he had created a new political party. The party has a platform of reduced spending, deploying AI to the military, focusing on pro-tech outcomes, reduced regulation, free speech, and “centrist policies everywhere else”.
Economic indicators and Earnings commentary
Last Wednesday, the ADP employment report painted a negative picture about the labor market, showing a -33,000 decrease in private-sector employment in June. Those fears were erased by the June jobs report later in the week, which showed that the U.S. economy added +147,000 new jobs, well above expectations for a +110,000 gain. Take this number for what they are worth, next to nothing, as they have historically lacked accuracy and will be revised down in the future.
Investors believe in slightly more than two Fed interest rate cuts. The figure has been rising slowly because the economy is showing signs of slowing and inflation is falling.
NFIB Small business optimism for June hits Tuesday. FOMC minutes are released on Wednesday. Jobs data is released Thursday
Earnings reports should be limited this week unless companies try to sneak in a July 4th weekend “surprise”, usually bad news.
Commodities and Currencies
OPEC announced a bigger than expected oil production increase for summer, putting more pressure on oil prices. The dollar is down over -10% ytd after many strategists were worrying about its strength into yearend 2024.
Gold is stuck near $3350/oz.
Bitcoin rallied toward $110k.
Oak Harvest Weekly Stock Talk: V- Bottom Fireworks: The Rally most Everyone Missed, https://www.youtube.com/watch?v=uhfROl7NdIk
Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.
