Bullish July: Highs and Outlook

Fresh news and strategies for traders. SPY Trader episode #1277. Welcome back to Spy Trader, your goto podcast for navigating the ups and downs of the stock market. It's 6 am on Tuesday, July 1st, 2025, Pacific time, and I'm your host, Bullish Barry, ready to dive into today's market action. The US stock market is kicking off July with some serious momentum, pushing major indices near alltime highs. The Dow Jones Industrial Average is up, nearing fortyfour thousand, the S&P 500 is sitting comfortably above sixtyone hundred, and the techheavy Nasdaq Composite is pushing twenty thousand. This overall rally is largely thanks to a few key factors. First, we're seeing some good news on the global front with geopolitical tensions easing, especially with a reported ceasefire between Israel and Iran, which has also helped bring down oil prices. Trade relations are also looking up, with Canada rescinding its digital services tax for negotiations and talks of a new USChina trade deal. And of course, megacap tech is still leading the charge. Apple's stock, for example, saw a bump after reports they're looking into using Open AI or Anthropic tech for Siri. On the flip side, we've seen news of Nvidia insiders selling off over a billion dollars in stock, including some by CEO Jensen Huang, which is something to keep an eye on. From a macroeconomic perspective, the Federal Reserve's preferred inflation measure, core PCE, came in slightly above expectations for May, but consumer inflation expectations for the year ahead plummeted in June, which is great. The big news from the bond market is that it's pricing in three Fed rate cuts this year, more than the Fed's own forecast of two, leading to declining Treasury yields. This generally helps the market by making borrowing cheaper. US business activity expanded in June, and durable goods orders surged in May, thanks to commercial aircraft bookings, showing a resilient economy, though growth might be slower. The upcoming US June jobs report is definitely on investors' radars. So, why is the market so bullish right now? It boils down to optimism about monetary policy, meaning those expected interest rate cuts making stocks more attractive. There's also an improved global outlook from deescalating tensions and trade progress. And the technology sector continues its impressive run, fueled by innovation and AI developments. The underlying economic fundamentals, while showing slower growth, remain stable. Now, for some concrete recommendations on how to navigate this market. First, maintain exposure to growthoriented sectors, especially Technology and Communication Services. These sectors have shown strong momentum. Think about established tech giants and innovative communication companies. Second, consider the Financial and Industrial sectors for cyclical upside. With expected lower interest rates and a resilient economy, financials could benefit from increased lending, and industrials are showing strong business activity. Third, exercise caution and be selective in Consumer Discretionary and Energy. These sectors have lagged, and consumer spending could be sensitive to economic shifts, while energy prices can be volatile. Fourth, keep a close eye on macroeconomic data, particularly inflation and employment reports. Any unexpected shifts here could influence the Fed's decisions. Fifth, always diversify and rebalance your portfolios. Even in a bullish market, volatility can happen. Don't put all your eggs in one basket. Consider a mix of growth and value stocks, and maybe broad market ETFs. Finally, be aware of companyspecific risks. While the market is strong, individual company news like insider stock sales, such as those at Nvidia, can signal potential concerns. Always do your due diligence. That's all for this edition of Spy Trader. Stay sharp out there, and happy trading!

Episode Transcript

(00:00):
Welcome back to Spy Trader , your goto podcast for navigating the ups and downs of the stock market .
It's 6 am on Tuesday , July 1st , 2025 , Pacific time , and I'm your host , Bullish Barry , ready to dive into today's market action .
The US stock market is kicking off July with some serious momentum , pushing major indices near alltime highs .

(00:25):
The Dow Jones Industrial Average is up , nearing fortyfour thousand , the S&P 500 is sitting comfortably above sixtyone hundred , and the techheavy Nasdaq Composite is pushing twenty thousand .
This overall rally is largely thanks to a few key factors .
First , we're seeing some good news on the global front with geopolitical tensions easing , especially with a reported ceasefire between Israel and Iran , which has also helped bring down oil prices .

(00:57):
Trade relations are also looking up , with Canada rescinding its digital services tax for negotiations and talks of a new USChina trade deal .
And of course , megacap tech is still leading the charge .
Apple's stock , for example , saw a bump after reports they're looking into using Open AI or Anthropic tech for Siri .
On the flip side , we've seen news of Nvidia insiders selling off over a billion dollars in stock , including some by CEO Jensen Huang , which is something to keep an eye on .

(01:29):
From a macroeconomic perspective , the Federal Reserve's preferred inflation measure , core PCE , came in slightly above expectations for May , but consumer inflation expectations for the year ahead plummeted in June , which is great .
The big news from the bond market is that it's pricing in three Fed rate cuts this year , more than the Fed's own forecast of two , leading to declining Treasury yields .

(01:54):
This generally helps the market by making borrowing cheaper .
US business activity expanded in June , and durable goods orders surged in May , thanks to commercial aircraft bookings , showing a resilient economy , though growth might be slower .
The upcoming US June jobs report is definitely on investors' radars .

(02:16):
So , why is the market so bullish right now ?
It boils down to optimism about monetary policy , meaning those expected interest rate cuts making stocks more attractive .
There's also an improved global outlook from deescalating tensions and trade progress .
And the technology sector continues its impressive run , fueled by innovation and AI developments .

(02:40):
The underlying economic fundamentals , while showing slower growth , remain stable .
Now , for some concrete recommendations on how to navigate this market .
First , maintain exposure to growthoriented sectors , especially Technology and Communication Services .
These sectors have shown strong momentum .

(03:00):
Think about established tech giants and innovative communication companies .
Second , consider the Financial and Industrial sectors for cyclical upside .
With expected lower interest rates and a resilient economy , financials could benefit from increased lending , and industrials are showing strong business activity .

(03:20):
Third , exercise caution and be selective in Consumer Discretionary and Energy .
These sectors have lagged , and consumer spending could be sensitive to economic shifts , while energy prices can be volatile .
Fourth , keep a close eye on macroeconomic data , particularly inflation and employment reports .

(03:41):
Any unexpected shifts here could influence the Fed's decisions .
Fifth , always diversify and rebalance your portfolios .
Even in a bullish market , volatility can happen .
Don't put all your eggs in one basket .
Consider a mix of growth and value stocks , and maybe broad market ETFs .
Finally , be aware of companyspecific risks .

(04:04):
While the market is strong , individual company news like insider stock sales , such as those at Nvidia , can signal potential concerns .
Always do your due diligence .
That's all for this edition of Spy Trader .
Stay sharp out there , and happy trading !