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Monday Market Kickoff: Record Highs & Key Earnings · The SPY Trader

• 0:00
  Alright , welcome back to Spy Trader , your goto podcast for navigating the ups and downs of the market !
• 0:06
  I'm your host , Market Maverick Mike , and it's 6 am on Monday , July 28th , 2025 Pacific .
• 0:15
  I hope you're all caffeinated and ready to dive into what's shaping up to be another fascinating week in the financial world .
• 0:22
  Now , let's kick things off with a quick recap of where we stand .
• 0:27
  US stock futures are looking quite green this morning , with the Nasdaq 100 up 0.55% , the Dow Jones Industrial Average up 0.19% , and the S&P 500 up 0.39% as of 4:30 a.m.
• 0:44
  Eastern Time .
• 0:45
  This builds on a fantastic close to last week , where the S&P 500 actually hit new intraday highs and finished up 1.5% for the week .
• 0:56
  The Nasdaq 100 gained 0.9% , and the Dow rose 1.3% .
• 1:02
  In fact , the S&P 500 has closed at a record high every day this past week , and the Nasdaq has achieved new highs in nine of the last ten sessions .
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  Yeartodate , the S&P 500 is up 7.8% , the NASDAQ up 8.6% , and the Dow Jones Industrials up 5.2% .
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  Now , for the big headlines .
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  First up , the US and EU have struck a new trade deal !
• 1:30
  President Trump announced a 15% tariff on European exports , a significant drop from the initially threatened 30% .
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  This follows a similar agreement with Japan that reduced tariffs from 25% to 15% , definitely easing investor jitters .
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  Second , we're in the thick of earnings season , folks !
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  This is a massive week , with over 150 S&P 500 companies reporting .
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  Four of the ' Magnificent Seven' tech giants are on deck : Meta and Microsoft on Wednesday , and Amazon and Apple on Thursday .
• 2:05
  So far , earnings have been robust , with nearly 80% , or 79.8% , of the 168 S&P 500 companies that have reported Q2 earnings exceeding analyst expectations .
• 2:19
  We saw Alphabet announce strong Q2 results , with revenue up 14% yearoveryear to 96.4 billion .
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  Nasdaq , Inc.
• 2:29
  also reported a 13% increase in net revenue .
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  American Airlines Group had a record quarter with 14.4 billion in revenue .
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  However , it's not all sunshine and rainbows .
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  Intel shares dropped nearly 9% after reporting a Q2 loss , while Tesla saw a 3.5% gain after falling sharply , boosted by a confirmed 16.5 billion semiconductor deal with Samsung .
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  And watch out , because the ' meme stock ' phenomenon might be making a comeback , with eyepopping gains in highly shorted stocks like Kohl's and Opendoor Technologies .
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  On the macroeconomic front , the Federal Reserve is widely expected to keep interest rates steady at their upcoming meeting , holding them between 4.25% and 4.5% .
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  The market consensus , according to the CME Group's FedWatch tool , shows a 97.4% probability of a rate hold .
• 3:30
  Inflation is still a watch point , with the PCE index expected to show a yearoveryear increase to 2.4% for June , up from 2.3% , and the CPI reaching 2.7% in June .
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  Forecasts suggest both could hit above 3% by yearend , partly due to tariffs .
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  The labor market is showing signs of cooling , with nonfarm payrolls rising by 147,000 in June , and wage growth moderating , though unemployment dipped slightly to 4.1% .
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  Lastly , the US economy is expected to slow down , with real GDP growth anticipated to be 0.8% yearoveryear by Q4 2025 , down from 2.8% in 2024 .
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  Now , let's break down what all this means for your portfolio .
• 4:23
  The overall sentiment is undeniably optimistic , primarily driven by those recent trade agreements , the consistently solid corporate earnings we're seeing , and the expectation that the Federal Reserve will maintain stable interest rates .
• 4:38
  Major indices are hitting new highs , which is fantastic , but we do have to acknowledge some macroeconomic crosscurrents .
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  The easing of trade tensions with the EU and Japan is a massive positive .
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  It reduces uncertainty , which businesses absolutely love , and it can really boost crossborder investment .
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  The fact that nearly 80% of S&P 500 companies are beating earnings expectations tells us that corporate America is , by and large , healthy and efficient , even with some economic headwinds .
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  This is a powerful engine driving stock prices higher .
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  The Fed's expected decision to hold rates steady provides predictability , which the market thrives on .
• 5:23
  However , we're seeing those inflationary pressures reemerge , especially with potential tariffinduced cost increases .
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  If inflation keeps creeping up , it could force the Fed's hand down the line , potentially leading to a more hawkish stance .
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  We're also seeing signs of a decelerating economy with slowing GDP growth and moderating job gains .
• 5:46
  This suggests a cooler economy .
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  While a ' soft landing ' is still largely anticipated , the labor market dynamics , like reduced immigration impacting the workforce , could signal a more fragile growth picture for lower and middleincome families .
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  Finally , it's worth noting that the S&P 500 is currently trading at 22.6 times earnings estimates , which is quite a bit above its longterm average .
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  This high valuation means the market could be more sensitive to any disappointments in earnings or economic data .
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  And that reemergence of ' meme stock ' activity ?
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  While fun for some , it's a clear signal of overexuberance and reminds us why fundamental analysis is so crucial .
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  Given this mixed but generally positive backdrop , I recommend a balanced and adaptive investment strategy .
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  First , for core portfolio stability , keep your exposure to broad market ETFs .
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  Think SPDR S&P 500 ETF Trust ( SPY ) , iShares CORE S&P 500 ETF ( IVV ) , or Vanguard S&P 500 ETF ( VOO ) .
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  For even broader US market exposure , consider the Vanguard Total Stock Market ETF ( VTI ) .
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  These funds offer diversified exposure and benefit from the overall market's upward trend and strong corporate performance .
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  Second , maintain strategic allocation to technology , but be selective .
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  While the Nasdaq has seen huge gains , focus on techfocused ETFs like the Invesco QQQ Trust ( QQQ ) , which tracks the Nasdaq100 .
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  For individual companies , look at the ' Magnificent Seven ' that are reporting strong earnings , such as Microsoft ( MSFT ) and Alphabet ( GOOG , GOOGL ) .
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  These companies continue to drive innovation , especially in AI .
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  However , given the high valuations in tech and recent dips for some like Intel , a selective approach is key .
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  Watch closely for comments on AI spending from upcoming earnings reports .
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  Third , for diversification , consider Industrials and Financials .
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  These sectors are performing strongly yeartodate .
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  Look at sectorspecific ETFs like the Industrial Select Sector SPDR Fund ( XLI ) and the Financial Select Sector SPDR Fund ( XLF ) .
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  Industrials could benefit from increased domestic investment , and financials could see stability from sustained interest rates .
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  Fourth , when picking individual stocks , emphasize quality and value .
• 8:24
  With the S&P 500 trading at high valuations , solid balance sheets and consistent earnings growth are your friends .
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  For example , American Airlines ( AAL ) reported record revenue in Q2 , showing strength in the travel sector , a great example of a company with strong fundamentals .
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  This approach helps buffer against potential market corrections and counters the speculative ' meme stock ' frenzy .
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  Fifth , stay vigilant and monitor macroeconomic data closely .
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  Keep an eye on the PCE index , jobs reports , and any further trade news .
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  The Fed is datadependent , so shifts in inflation or employment data could trigger policy changes .
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  Be prepared to adjust your portfolio .
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  And finally , if you're looking for stability and income , consider fixed income ETFs like the iShares Core U.S.
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  Aggregate Bond ETF ( AGG ) or Vanguard Total Bond Market ETF ( BND ) .
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  However , with potential reaccelerating inflation , manage your bond exposure carefully .
• 9:28
  Longterm Treasury ETFs like iShares 20 Year Treasury Bond ETF ( TLT ) might experience more volatility if interest rates start to move .
• 9:38
  Alright , that's your rundown for today !
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  By staying diversified and informed , you can navigate these market currents and find those sweet spots for growth .
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  Until next time , this is Market Maverick Mike signing off .
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  Happy trading !