July 4, 2025 • 10 mins
Fresh news and strategies for traders. SPY Trader episode #1287.
Hey there, traders and investors! Welcome to Spy Trader, your goto podcast for understanding the pulse of the market. I'm your host, Money Mike, and it's 6 pm on Friday, July 4th, 2025, here on the Pacific Coast. We’ve got a lot to unpack from a truly eventful period in the markets, so let's dive right in. First up, our market recap. The U.S. stock market has been on an absolute tear, particularly in the second quarter of 2025. Both the S&P 500 and Nasdaq Composite have recently hit fresh record highs, and the Dow Jones Industrial Average is hot on their heels, nearing its own alltime peak. For the week ending July 3rd, the Dow climbed 2.3 percent, the S&P 500 gained 1.7 percent, and the Nasdaq Composite added 1.6 percent. June was a fantastic month, with the Dow up 4 percent, the S&P 500 surging 5 percent, and the Nasdaq Composite leading the charge with a 6 percent gain. Looking at the second quarter, it was the best for U.S. stocks in over a year, with the S&P 500 jumping 10.6 percent and the Nasdaq Composite soaring 17.8 percent. Even the smallcap Russell 2000 advanced 8.3 percent. While the first half of 2025 was a bit more mixed overall, described as 'tepid' for the major indexes, the S&P 500 remarkably recovered from a near 20 percent decline earlier in the year to finish the half up 5.5 percent. This resilience is truly something to watch. In terms of sectors, Industrials led gains with a 15.4 percent surge in the first half, followed by Technology at 11.6 percent, and Utilities at 11.0 percent. The Information Technology sector specifically had a very strong June, returning 9.8 percent. On the flip side, Consumer Discretionary fell 2.3 percent and Energy declined 0.2 percent in the first half of 2025. The AI rally, which has been a major theme, is broadening out beyond just the megacap tech giants, now reaching into related areas like electrification, data storage, and infrastructure. Now, for the macroeconomic conditions that are shaping this landscape. A strongerthanexpected June jobs report really boosted confidence, with U.S. employers adding 147,000 jobs, beating expectations, and the unemployment rate unexpectedly dropping to 4.1 percent. This has significantly reduced recession concerns, with the odds of a U.S. recession in 2025 falling from 65 percent in May to just 22 percent in July. However, this robust labor market has also dampened expectations for immediate interest rate cuts from the Federal Reserve. The Fed is holding its key policy rate at 4.25 percent to 4.50 percent, stating they need more time to assess tariff impacts. That said, Fed officials still anticipate two rate cuts in 2025, likely resuming in the fall. Following the jobs report, the yield on the 10year Treasury note rose to 4.34 percent, and the twoyear Treasury yield jumped to 3.88 percent, reflecting expectations for rates to stay higher for longer. Trade policy is another big one. There’s optimism following an agreement with Vietnam to reduce tariffs, but uncertainty remains as a 90day tariff pause is set to expire on July 9th. This could mean higher levies on goods from countries without new trade deals. The recently approved 'One Big Beautiful Bill,' which includes fiscal stimulus through tax cuts and increased spending, further supports the Fed's cautious stance on rates, but tariffs also pose a risk of elevated inflation. Geopolitically, easing tensions in the Middle East have also added to the positive market outlook. On the company front, we've seen some big movers. Datadog, ticker DDOG, saw its shares surge between 14.9 and 15 percent after S&P Global announced its inclusion in the S&P 500 index effective July 9th. Solar and semiconductor firms had a good run too, with First Solar, FSLR, up 8.5 percent, and Enphase Energy, ENPH, gaining 3.9 percent. Similarly, semiconductor design software firms Cadence Design Systems, CDNS, and Synopsys,
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hey there , traders and investors !
Welcome to Spy Trader , your goto podcast for understanding the pulse of the market .
I'm your host , Money Mike , and it's 6 pm on Friday , July 4th , 2025 , here on the Pacific Coast .
We’ve got a lot to unpack from a truly eventful period in the markets , so let's dive right in .
First up , our market recap .
(00:22):
The U.S.
stock market has been on an absolute tear , particularly in the second quarter of 2025 .
Both the S&P 500 and Nasdaq Composite have recently hit fresh record highs , and the Dow Jones Industrial Average is hot on their heels , nearing its own alltime peak .
For the week ending July 3rd , the Dow climbed 2.3 percent , the S&P 500 gained 1.7 percent , and the Nasdaq Composite added 1.6 percent .
(00:55):
June was a fantastic month , with the Dow up 4 percent , the S&P 500 surging 5 percent , and the Nasdaq Composite leading the charge with a 6 percent gain .
Looking at the second quarter , it was the best for U.S.
stocks in over a year , with the S&P 500 jumping 10.6 percent and the Nasdaq Composite soaring 17.8 percent .
(01:19):
Even the smallcap Russell 2000 advanced 8.3 percent .
While the first half of 2025 was a bit more mixed overall , described as ' tepid ' for the major indexes , the S&P 500 remarkably recovered from a near 20 percent decline earlier in the year to finish the half up 5.5 percent .
(01:41):
This resilience is truly something to watch .
In terms of sectors , Industrials led gains with a 15.4 percent surge in the first half , followed by Technology at 11.6 percent , and Utilities at 11.0 percent .
The Information Technology sector specifically had a very strong June , returning 9.8 percent .
(02:04):
On the flip side , Consumer Discretionary fell 2.3 percent and Energy declined 0.2 percent in the first half of 2025 .
The AI rally , which has been a major theme , is broadening out beyond just the megacap tech giants , now reaching into related areas like electrification , data storage , and infrastructure .
(02:26):
Now , for the macroeconomic conditions that are shaping this landscape .
A strongerthanexpected June jobs report really boosted confidence , with U.S.
employers adding 147,000 jobs , beating expectations , and the unemployment rate unexpectedly dropping to 4.1 percent .
(02:46):
This has significantly reduced recession concerns , with the odds of a U.S.
recession in 2025 falling from 65 percent in May to just 22 percent in July .
However , this robust labor market has also dampened expectations for immediate interest rate cuts from the Federal Reserve .
The Fed is holding its key policy rate at 4.25 percent to 4.50 percent , stating they need more time to assess tariff impacts .
(03:16):
That said , Fed officials still anticipate two rate cuts in 2025 , likely resuming in the fall .
Following the jobs report , the yield on the 10year Treasury note rose to 4.34 percent , and the twoyear Treasury yield jumped to 3.88 percent , reflecting expectations for rates to stay higher for longer .
(03:38):
Trade policy is another big one .
There’s optimism following an agreement with Vietnam to reduce tariffs , but uncertainty remains as a 90day tariff pause is set to expire on July 9th .
This could mean higher levies on goods from countries without new trade deals .
The recently approved ' One Big Beautiful Bill , ' which includes fiscal stimulus through tax cuts and increased spending , further supports the Fed's cautious stance on rates , but tariffs also pose a risk of elevated inflation .
(04:12):
Geopolitically , easing tensions in the Middle East have also added to the positive market outlook .
On the company front , we've seen some big movers .
Datadog , ticker DDOG , saw its shares surge between 14.9 and 15 percent after S&P Global announced its inclusion in the S&P 500 index effective July 9th .
(04:36):
Solar and semiconductor firms had a good run too , with First Solar , FSLR , up 8.5 percent , and Enphase Energy , ENPH , gaining 3.9 percent .
Similarly , semiconductor design software firms Cadence Design Systems , CDNS , and Synopsys , SNPS , rose after the U.S.
(04:58):
government lifted restrictions on exporting certain software to China .
Oracle , ORCL , shares jumped over 8 percent to new alltime highs on news of a reported 30 billion dollar data deal win and strong growth in its MultiCloud database revenue .
Not all sectors were shining though .
Centene , CNC , shares plummeted almost 40 percent after the company withdrew its fullyear guidance due to weak growth and higherthanexpected costs .
(05:27):
This negative news impacted other healthcare insurers like UnitedHealth , UNH , and Elevance Health , ELV .
Tesla , TSLA , had a volatile week , ending slightly down and showing an 8.3 percent decline in June , contributing to a 21 percent yeartodate drop .
Investors are really waiting for updates on its robotaxi expansion during the upcoming secondquarter earnings call .
(05:53):
So , what does all this mean for you , the savvy investor ?
The current state of the U.S.
stock market is a fascinating mix of strong economic fundamentals and ongoing policy uncertainties .
The primary driver of this recent surge is undoubtedly the robust U.S.
economy , particularly highlighted by that strong jobs report .
(06:15):
This signals continued employment growth and falling unemployment , easing recession fears and boosting corporate earnings expectations .
The broadening of the AI rally , reaching into industrial and utility sectors , suggests a healthier and more sustainable market expansion beyond just a few tech giants .
(06:36):
Optimism around trade deals and easing geopolitical tensions are also big positives .
And that ' One Big Beautiful Bill ' provides fiscal stimulus , which is generally supportive of economic growth .
However , there are significant headwinds to consider .
The strong economy has cooled expectations for immediate Federal Reserve interest rate cuts , likely pushing them to the fall , which has led to a jump in Treasury yields .
(07:03):
Higher yields mean increased borrowing costs for businesses and consumers .
That looming July 9th deadline for the tariff pause creates real policy uncertainty .
If new trade deals aren't secured , tariffs could rise substantially , potentially impacting corporate profit margins and consumer demand , and adding to inflation .
(07:25):
Also , market valuations , especially for the S&P 500 , are elevated , meaning there’s less room for error .
And as we saw with Centene , not all sectors are performing equally , and industryspecific challenges can still lead to significant stock price declines .
Alright , Money Mike’s concrete recommendations time !
(07:47):
First , maintain diversification but with a tilt towards growth .
Given the continued strength in technology and the broadening AI rally into industrial and utility sectors , keeping exposure to growthoriented stocks is wise .
But remember , with elevated valuations , diversification across sectors like industrials and utilities can help manage risk .
(08:11):
Second , monitor trade developments closely .
That July 9th expiration of the tariff pause is a critical nearterm event .
Keep a close eye on trade negotiations and potential new tariffs , as these could introduce significant volatility and impact specific sectors , especially those relying on international trade or complex supply chains .
(08:34):
Third , prepare for potential interest rate volatility .
While the Fed is expected to cut rates later in the year , the strong jobs data makes the exact timing uncertain .
Be ready for fluctuations in bond yields and adjust your fixedincome allocations accordingly .
The seventoten year maturity space for U.S.
investmentgrade bonds might offer some value here .
(08:57):
Fourth , focus on companies with strong fundamentals and a clear path to earnings growth .
In an environment of elevated valuations , companies that can clearly show doubledigit earnings growth and have solid financial foundations will be more resilient .
The upcoming secondquarter earnings season will be crucial for assessing the impact of tariffs on company profits and consumer demand .
(09:23):
Fifth , be selective in healthcare and consumer discretionary .
Centene’s recent struggles are a warning sign in healthcare , and the lagging performance of Consumer Discretionary stocks points to potential headwinds from consumer sentiment and policy changes .
Do your thorough due diligence for any individual stock selections in these sectors .
(09:46):
Finally , consider opportunistic entries on dips .
While the market is at record highs , any significant pullbacks due to tariff news or shifts in Fed policy could present excellent buying opportunities for longterm investors , given the underlying resilience of the U.S.
economy .
The S&P 500’s impressive recovery in the first half of the year really shows this market’s ability to bounce back .
(10:12):
That's all for this episode of Spy Trader !
I'm Money Mike , and remember , keep those eyes on the market , and your portfolio diversified .
See you next time !
Hey there , traders and investors !
Welcome to Spy Trader , your goto podcast for understanding the pulse of the market .
I'm your host , Money Mike , and it's 6 pm on Friday , July 4th , 2025 , here on the Pacific Coast .
We’ve got a lot to unpack from a truly eventful period in the markets , so let's dive right in .
First up , our market recap .
(00:22):
The U.S.
stock market has been on an absolute tear , particularly in the second quarter of 2025 .
Both the S&P 500 and Nasdaq Composite have recently hit fresh record highs , and the Dow Jones Industrial Average is hot on their heels , nearing its own alltime peak .
For the week ending July 3rd , the Dow climbed 2.3 percent , the S&P 500 gained 1.7 percent , and the Nasdaq Composite added 1.6 percent .
(00:55):
June was a fantastic month , with the Dow up 4 percent , the S&P 500 surging 5 percent , and the Nasdaq Composite leading the charge with a 6 percent gain .
Looking at the second quarter , it was the best for U.S.
stocks in over a year , with the S&P 500 jumping 10.6 percent and the Nasdaq Composite soaring 17.8 percent .
(01:19):
Even the smallcap Russell 2000 advanced 8.3 percent .
While the first half of 2025 was a bit more mixed overall , described as ' tepid ' for the major indexes , the S&P 500 remarkably recovered from a near 20 percent decline earlier in the year to finish the half up 5.5 percent .
(01:41):
This resilience is truly something to watch .
In terms of sectors , Industrials led gains with a 15.4 percent surge in the first half , followed by Technology at 11.6 percent , and Utilities at 11.0 percent .
The Information Technology sector specifically had a very strong June , returning 9.8 percent .
(02:04):
On the flip side , Consumer Discretionary fell 2.3 percent and Energy declined 0.2 percent in the first half of 2025 .
The AI rally , which has been a major theme , is broadening out beyond just the megacap tech giants , now reaching into related areas like electrification , data storage , and infrastructure .
(02:26):
Now , for the macroeconomic conditions that are shaping this landscape .
A strongerthanexpected June jobs report really boosted confidence , with U.S.
employers adding 147,000 jobs , beating expectations , and the unemployment rate unexpectedly dropping to 4.1 percent .
(02:46):
This has significantly reduced recession concerns , with the odds of a U.S.
recession in 2025 falling from 65 percent in May to just 22 percent in July .
However , this robust labor market has also dampened expectations for immediate interest rate cuts from the Federal Reserve .
The Fed is holding its key policy rate at 4.25 percent to 4.50 percent , stating they need more time to assess tariff impacts .
(03:16):
That said , Fed officials still anticipate two rate cuts in 2025 , likely resuming in the fall .
Following the jobs report , the yield on the 10year Treasury note rose to 4.34 percent , and the twoyear Treasury yield jumped to 3.88 percent , reflecting expectations for rates to stay higher for longer .
(03:38):
Trade policy is another big one .
There’s optimism following an agreement with Vietnam to reduce tariffs , but uncertainty remains as a 90day tariff pause is set to expire on July 9th .
This could mean higher levies on goods from countries without new trade deals .
The recently approved ' One Big Beautiful Bill , ' which includes fiscal stimulus through tax cuts and increased spending , further supports the Fed's cautious stance on rates , but tariffs also pose a risk of elevated inflation .
(04:12):
Geopolitically , easing tensions in the Middle East have also added to the positive market outlook .
On the company front , we've seen some big movers .
Datadog , ticker DDOG , saw its shares surge between 14.9 and 15 percent after S&P Global announced its inclusion in the S&P 500 index effective July 9th .
(04:36):
Solar and semiconductor firms had a good run too , with First Solar , FSLR , up 8.5 percent , and Enphase Energy , ENPH , gaining 3.9 percent .
Similarly , semiconductor design software firms Cadence Design Systems , CDNS , and Synopsys , SNPS , rose after the U.S.
(04:58):
government lifted restrictions on exporting certain software to China .
Oracle , ORCL , shares jumped over 8 percent to new alltime highs on news of a reported 30 billion dollar data deal win and strong growth in its MultiCloud database revenue .
Not all sectors were shining though .
Centene , CNC , shares plummeted almost 40 percent after the company withdrew its fullyear guidance due to weak growth and higherthanexpected costs .
(05:27):
This negative news impacted other healthcare insurers like UnitedHealth , UNH , and Elevance Health , ELV .
Tesla , TSLA , had a volatile week , ending slightly down and showing an 8.3 percent decline in June , contributing to a 21 percent yeartodate drop .
Investors are really waiting for updates on its robotaxi expansion during the upcoming secondquarter earnings call .
(05:53):
So , what does all this mean for you , the savvy investor ?
The current state of the U.S.
stock market is a fascinating mix of strong economic fundamentals and ongoing policy uncertainties .
The primary driver of this recent surge is undoubtedly the robust U.S.
economy , particularly highlighted by that strong jobs report .
(06:15):
This signals continued employment growth and falling unemployment , easing recession fears and boosting corporate earnings expectations .
The broadening of the AI rally , reaching into industrial and utility sectors , suggests a healthier and more sustainable market expansion beyond just a few tech giants .
(06:36):
Optimism around trade deals and easing geopolitical tensions are also big positives .
And that ' One Big Beautiful Bill ' provides fiscal stimulus , which is generally supportive of economic growth .
However , there are significant headwinds to consider .
The strong economy has cooled expectations for immediate Federal Reserve interest rate cuts , likely pushing them to the fall , which has led to a jump in Treasury yields .
(07:03):
Higher yields mean increased borrowing costs for businesses and consumers .
That looming July 9th deadline for the tariff pause creates real policy uncertainty .
If new trade deals aren't secured , tariffs could rise substantially , potentially impacting corporate profit margins and consumer demand , and adding to inflation .
(07:25):
Also , market valuations , especially for the S&P 500 , are elevated , meaning there’s less room for error .
And as we saw with Centene , not all sectors are performing equally , and industryspecific challenges can still lead to significant stock price declines .
Alright , Money Mike’s concrete recommendations time !
(07:47):
First , maintain diversification but with a tilt towards growth .
Given the continued strength in technology and the broadening AI rally into industrial and utility sectors , keeping exposure to growthoriented stocks is wise .
But remember , with elevated valuations , diversification across sectors like industrials and utilities can help manage risk .
(08:11):
Second , monitor trade developments closely .
That July 9th expiration of the tariff pause is a critical nearterm event .
Keep a close eye on trade negotiations and potential new tariffs , as these could introduce significant volatility and impact specific sectors , especially those relying on international trade or complex supply chains .
(08:34):
Third , prepare for potential interest rate volatility .
While the Fed is expected to cut rates later in the year , the strong jobs data makes the exact timing uncertain .
Be ready for fluctuations in bond yields and adjust your fixedincome allocations accordingly .
The seventoten year maturity space for U.S.
investmentgrade bonds might offer some value here .
(08:57):
Fourth , focus on companies with strong fundamentals and a clear path to earnings growth .
In an environment of elevated valuations , companies that can clearly show doubledigit earnings growth and have solid financial foundations will be more resilient .
The upcoming secondquarter earnings season will be crucial for assessing the impact of tariffs on company profits and consumer demand .
(09:23):
Fifth , be selective in healthcare and consumer discretionary .
Centene’s recent struggles are a warning sign in healthcare , and the lagging performance of Consumer Discretionary stocks points to potential headwinds from consumer sentiment and policy changes .
Do your thorough due diligence for any individual stock selections in these sectors .
(09:46):
Finally , consider opportunistic entries on dips .
While the market is at record highs , any significant pullbacks due to tariff news or shifts in Fed policy could present excellent buying opportunities for longterm investors , given the underlying resilience of the U.S.
economy .
The S&P 500’s impressive recovery in the first half of the year really shows this market’s ability to bounce back .
(10:12):
That's all for this episode of Spy Trader !
I'm Money Mike , and remember , keep those eyes on the market , and your portfolio diversified .
See you next time !
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