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Record Rally: Jobs Report Fuels Market Surge · The SPY Trader

• 0:00
  Welcome back to Spy Trader , your goto podcast for navigating the markets !
• 0:05
  I’m your host , Moneybags Mike , and it’s 6 pm on Thursday , July 3rd , 2025 , Pacific Time .
• 0:12
  The fireworks are already starting early in the market , even before the big Independence Day holiday tomorrow !
• 0:19
  The U.S.
• 0:19
  stock market is absolutely soaring , with major indices hitting or nearly hitting record highs , fueled by some fantastic economic news and a wave of optimism .
• 0:31
  Let's dive into the headlines .
• 0:33
  The S&P 500 closed at a new record high of 6,279.35 yesterday , gaining 0.8% for the day and marking its fourth record high in just five trading days .
• 0:47
  It’s up nearly 7% yeartodate and surged an impressive 10.6% in the second quarter of 2025 .
• 0:56
  Not to be outdone , the Nasdaq Composite also hit a new record high of 20,601.10 , up 1% for the day , and the Dow Jones Industrial Average advanced 0.8% to 44,828.53 , nearing its own alltime high from December 2024 .
• 1:16
  The second quarter was the best for U.S.
• 1:18
  stocks in over a year , and historically , July has been a strong month for the S&P 500 .
• 1:26
  A big reason for this market cheer was the June jobs report , released yesterday .
• 1:32
  U.S.
• 1:32
  employers added 147,000 jobs , handily beating expectations of 110,000 , and the unemployment rate unexpectedly dipped to 4.1% from 4.2% .
• 1:46
  This report really reinforced the resilience of our economy .
• 1:51
  We’re also seeing a boost from optimism around potential U.S.China trade deals and a new agreement with Vietnam , though everyone's watching that July 9th deadline for new tariffs .
• 2:02
  On the legislative front , President Trump's 'One Big Beautiful Bill , ' that comprehensive tax and spending package , has cleared the Senate and is now headed to the House .
• 2:14
  In company news , Datadog , or DDOG , surged a cool 15% yesterday after announcing it will join the S&P 500 index on July 9th .
• 2:25
  Tesla , or TSLA , has seen some volatility recently , climbing 5% on Tuesday after its Q2 global deliveries figures , but then falling slightly yesterday and tumbling over 5% on Monday amid a publicized dispute involving Elon Musk .
• 2:43
  Apple , or AAPL , has notably underperformed the S&P 500 yeartodate , losing 17% through Tuesday , partly due to concerns about its AI progress .
• 2:55
  Goldman Sachs , or GS , was a strong performer within the Dow , rising 2.5% on Monday .
• 3:02
  Now , let’s talk macro .
• 3:04
  The annual inflation rate was 2.4% for May , and the next update on June data is due July 15th .
• 3:12
  Forecasts suggest a slight acceleration to 2.64% for June .
• 3:17
  The Federal Reserve held interest rates steady at 4.25% to 4.50% in June .
• 3:24
  That strong jobs report has really dampened expectations for a July rate cut , with market probabilities plummeting to just 5% from 24% before the report .
• 3:35
  The 10year Treasury yield rose to 4.35% yesterday , reflecting those revised expectations .
• 3:43
  So , what does all this mean for your portfolio ?
• 3:46
  The U.S.
• 3:46
  stock market is definitely in a bullish trend right now .
• 3:50
  That robust jobs report signals a resilient economy , which is a great foundation for corporate earnings and consumer spending .
• 3:58
  The rally in AI stocks is also broadening out beyond just the megacap tech giants , with related sectors like electrification , data storage , and infrastructure benefiting .
• 4:09
  This expansion of growth is a very healthy sign for the market .
• 4:14
  Plus , the ongoing trade optimism and legislative developments are certainly boosting investor confidence .
• 4:21
  However , it's not all smooth sailing .
• 4:24
  That strong jobs report means a nearterm interest rate cut from the Fed is now highly unlikely .
• 4:31
  Higherforlonger rates can impact borrowing costs for businesses and consumers , so that's something to keep an eye on .
• 4:39
  Also , the threat of tariffs could reignite inflationary pressures , potentially forcing the Fed to maintain or even raise rates if inflation picks up significantly .
• 4:49
  And despite the recent gains , the first half of 2025 was quite volatile , and July historically can see a rise in the VIX .
• 4:58
  Geopolitical tensions , especially in the Middle East , and continued trade policy uncertainties remain potential sources of market swings .
• 5:07
  So , what are Moneybags Mike’s recommendations for you today ?
• 5:11
  First , maintain diversification with a tilt towards quality growth .
• 5:16
  While tech has led , the broadening AI rally means opportunities beyond just the biggest tech companies .
• 5:22
  Consider balancing your portfolio with established tech leaders , but also look into industries benefiting from AI infrastructure , data solutions , and electrification .
• 5:32
  A balanced approach is key , especially with the recent sector rotation we’ve seen .
• 5:38
  Second , monitor macroeconomic indicators closely .
• 5:43
  The upcoming inflation data on July 15th and any further statements from the Federal Reserve regarding interest rates could significantly impact market direction .
• 5:52
  Third , evaluate earnings season carefully .
• 5:56
  The Q2 earnings season kicks off in earnest next week with the major banks .
• 6:01
  Focus on companies that show strong earnings quality , healthy margins , and positive forward guidance , particularly those managing tariff impacts well .
• 6:12
  Fourth , consider Industrials and Cyclicals for broader exposure .
• 6:16
  Given their strong performance in Q2 and the recent shift towards cyclical stocks , companies in these sectors could offer compelling opportunities if economic resilience continues and trade concerns ease .
• 6:29
  Finally , always be prepared for volatility .
• 6:33
  The market's recent history of sharp swings means they are always possible .
• 6:39
  Have a clear investment strategy and consider risk management techniques , like setting stoplosses or keeping some cash reserved for potential buying opportunities during pullbacks .
• 6:50
  That's all for this edition of Spy Trader .
• 6:53
  Keep those eyes on the market , and I'll catch you next time !