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Market Peaks & Policy Pivots · The SPY Trader

• 0:00
  Alright everyone , welcome back to Spy Trader , your goto podcast for navigating the ups and downs of the stock market !
• 0:07
  I'm your host , Monty Moneybags , and it's 6 am on Monday , July 7th , 2025 , Pacific time .
• 0:16
  We've got a lot to cover this morning , so let's jump right into the financial headlines that are shaping our world .
• 0:22
  The US stock market is definitely on a positive roll .
• 0:26
  Both the S&P 500 and the Nasdaq Composite recently hit fresh record highs just last week , on July 2nd .
• 0:35
  The S&P 500 , currently sitting around 6,279 , is up 0.83% in the last 24 hours , 2.74% over the past week , and a solid 5.74% over the last month .
• 0:52
  Yeartodate , it's up over 6% , and an impressive 14.02% over the last year .
• 0:59
  The Nasdaq , now at 20,601 , has seen similar gains , up 1.02% in the last day and 5.55% over the month .
• 1:10
  Even the Dow Jones , trading at 44,828 , is showing good momentum with a 0.77% gain .
• 1:20
  While some technical indicators suggest these indices might be ' overbought , ' the broad market rally indicates a healthy underlying base .
• 1:28
  Now , shifting gears to sector performance , we've seen some interesting rotations .
• 1:34
  Towards the end of last week , materials and healthcare stocks posted the largest gains , suggesting a potential shift away from the big tech and communication services names that have been leading the charge .
• 1:46
  Speaking of news , trade policy continues to be a central focus .
• 1:51
  The US recently reached a new agreement with Vietnam , which is a positive sign , but a major deadline looms : the Trump administration has set an August 1st deadline for countries to finalize trade deals or face increased tariffs , reverting to April levels .
• 2:09
  Plus , a 90day tariff pause expires on July 9th , so keep an eye on that .
• 2:16
  On the economic front , we got a hotterthanexpected jobs report for June , showing 147,000 nonfarm payrolls added , well above the 110,000 forecast , and the unemployment rate unexpectedly fell to 4.1% .
• 2:31
  This resilient labor market data has definitely boosted market sentiment .
• 2:36
  And just a note , US markets had an abbreviated session on July 3rd for the Independence Day holiday , so volumes were lighter .
• 2:45
  From the corporate earnings side , strong reports are expected to continue supporting US equities .
• 2:52
  Looking at specific companies , Datadog , ticker DDOG , saw its stock jump 11% in premarket trading last week after news broke that it would be joining the S&P 500 .
• 3:06
  On the flip side , Tesla , ticker TSLA , had a tough time recently , partly due to reports of Elon Musk considering starting a third political party , and also after reporting a 14% yearoveryear decline in vehicle deliveries last quarter , missing Wall Street expectations .
• 3:24
  While big tech names like Nvidia , Microsoft , and Apple are huge market movers , some were down slightly last week as investors rotated into other sectors .
• 3:36
  So , what does all this mean for us , the savvy Spy Traders ?
• 3:40
  The current market strength is largely driven by that resilient economic data , especially the robust jobs report , and the temporary easing of trade tensions .
• 3:50
  The S&P 500 and Nasdaq hitting new highs definitely signals a bullish sentiment , possibly fueled by expectations of continued economic stability and those anticipated Federal Reserve rate cuts later in the year .
• 4:05
  However , we're navigating a complex landscape .
• 4:09
  That August 1st tariff deadline and the July 9th expiration of the tariff pause introduce significant uncertainty that could easily trigger volatility .
• 4:18
  While trade tensions have deescalated a bit , the potential for tariffs to reignite inflation , possibly pushing core PCE inflation towards 3.1% by yearend , and impact corporate profit margins , remains a real concern .
• 4:35
  We did see a slight decrease in real GDP in the first quarter of 2025 , and economists are forecasting a summer slowdown , with GDP growth potentially decelerating to 0.8% yearoveryear by the fourth quarter .
• 4:50
  This suggests that while the economy is resilient , growth is moderating .
• 4:54
  The Fed's held its policy rate steady , waiting for more clarity on tariffs , but their June projections still point to two interest rate cuts this year .
• 5:05
  So , for our trading recommendations , based on what we're seeing , first off , continue to maintain diversified portfolios with a lean towards US equities .
• 5:15
  Given the ongoing strength in the US markets and the potential for continued strong corporate earnings , it makes sense to have a strategic allocation to US large and midcap stocks .
• 5:26
  Diversification across sectors is crucial , as market leadership might broaden beyond just tech .
• 5:33
  Secondly , consider overweighting financials , healthcare , and consumer discretionary sectors .
• 5:39
  Edward Jones specifically recommends these , suggesting they're wellpositioned .
• 5:44
  Financials could benefit from a stable labor market , and healthcare and consumer discretionary sectors could see continued demand as the economy holds steady .
• 5:54
  Third , keep a very close eye on those tariff negotiations .
• 5:59
  The August 1st deadline is a critical event .
• 6:02
  Stay informed about trade developments , as a reescalation could negatively impact various sectors , especially those relying on global supply chains .
• 6:12
  You might even consider defensive positions or hedging strategies if tensions intensify .
• 6:18
  Fourth , stay attuned to inflation data and any commentary from the Federal Reserve .
• 6:24
  While inflation has been contained , the risk of tariffdriven inflation is real , and the Fed's path for interest rate cuts will heavily depend on this data .
• 6:34
  Fifth , be selective in the technology and communication services sectors .
• 6:39
  While they've been incredibly strong , some indicators suggest they might be temporarily overbought .
• 6:45
  Focus on companies with strong fundamentals , clear growth trajectories , and sustainable competitive advantages rather than just chasing momentum .
• 6:55
  Sixth , consider opportunities in small and midcap stocks .
• 7:00
  These indices have actually outperformed recently , which could signal a broadening of the rally and potential value in these segments .
• 7:08
  Seventh , always review individual company events and earnings .
• 7:12
  News like Datadog joining the S&P 500 can lead to significant stock movements , so staying informed about earnings reports and corporate developments is vital for individual stock selection .
• 7:25
  And finally , prepare for potential volatility .
• 7:29
  Despite the current positive sentiment , policy uncertainty , particularly around tariffs and fiscal policy , could introduce choppiness in the second half of 2025 .
• 7:40
  Having a welldefined investment strategy and risk management plan is always your best defense .
• 7:47
  That's it for this edition of Spy Trader .
• 7:49
  Thanks for tuning in , and I'll catch you next time !