Closing Recap

Thursday, July 03, 2025

U.S. stock markets continue to amaze, pushing higher again amid further signs of an improving economy as monthly nonfarm payrolls come in well above consensus/show decline in unemployment, while ISM Services data and factory orders also showed strength, boosting investor sentiment. There hasn’t been much to fret about of late with signs of a solid labor market, tariff deals are starting to materialize (China, Vietnam) benefitting the U.S., inflation has slowed the last 4 months (as per data), and even geopolitical situations (Israel/Iran and Ukraine/Russia) have cooled. This has led to a massive +25% plus rally over 55 days since the April pullback, pushing the S&P 500 and Nasdaq to record highs (and the Dow knocking on records) led by a renewed rally in the AI/Data center/power sectors, and record runs for financials and industrials. Heading into the 4^th of July holiday tomorrow (and early 1:00 pm et close for the NYSE exchange today), fireworks for U.S. stocks indeed with the S&P and Nasdaq at all-time highs, Bitcoin prices not far from all-time highs, gold prices not far from record highs, housing prices remain elevated – while the National debt, credit card debt also at record highs! For the week, S&P 500 up 1.72%, Nasdaq up 1.62%, Dow up 2.3%.

While today’s headline jobs data was strong, notable parts of the job gains showed the weakest private sector growth since October 2024 (per CNBC Liesmann) as 73K of the +147K job gains were on the gov’t side. The stronger jobs results boosting Treasury yields as the chance of Fed rate cuts in the n-t lessen; the 2-yr yield +8bps to 3.87% and 10-yr +3.5bps to 4.328%. The U.S. dollar also spiked following the monthly jobs headline, unemployment figures on signs the economy remains strong (while inflation remains subdued). August gold prices fall following the spike in the dollar/yields an ounce as n-t rate cut expectations lessen post jobs data. Traders have significantly dialed back bets on interest-rate cuts after Thursday’s stronger-than-expected jobs report as per WSJ. Interest-rate futures showed the chances of an interest-rate cut in July falling to 5% from 24% Wednesday, according to CME Group data. The chances of three or more 25bps cuts by the end of the year fell to 30% from 56%. The chances of one or zero cuts this year rose to 25% from 9%.

In Trade News this week: Ahead of the July 9^th trade/tariff deadline with nations, yesterday President Trump announced a trade deal with Vietnam. Under the agreement, a 20% tariff will apply to Vietnamese exports, and a 40% levy will target goods deemed transshipped through the country, while Vietnam will eliminate all tariffs on US imports. Meanwhile the Trump administration removed export license requirements for chip design software sales to China part of the US-China trade deal. We’ll see if any new trade deals arise in coming days with Japan, India, EU, Canada among the ones most high profile.

In Sentiment data: The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was +11.9 vs -5.2 last week. Bulls surge to 45% from 35.1%, Neutrals fall to 21.9% from 24.7%, Bears fall to 33.1% from 40.3%. This week’s NAAIM Exposure Index reading surged to 99.30, falling from last week’s 81.41, the highest reading since the 99.24 reading on 12/11 – recent trough from 4-17 of 35.16 – Last Quarter Average (Q2) of 73.28. Both showing potential short-term peaking signs as contra indicators.

• The June unemployment rate surprisingly fell to 4.1% from prior 4.2% and the consensus 4.3% while the June U-6 underemployment rate was at 7.7%. June average workweek all private workers 34.2 hours as June average hourly earnings +3.7% y/y below consensus +3.9% and M/M rose +0.2% vs. est. +0.3%)
• Weekly Jobless Claims fell to 233,000 in the latest week (6-week low) vs. consensus 240,000; the 4-week moving average fell to 241,500 from 245,250 prior week; continuing claims unchanged at 1.964M and above the consensus of 1.956M; the insured unemployment rate unchanged at 1.3% in the latest week.
• ISM Non-Manufacturing Services) activity picked up in June as orders rebounded, but employment contracted for the third time this year, Overall ISM services PMI increased to 50.8 last month from 49.9 in May and above ests 50.5 (expansion above 50 reading). The new orders measure rebounded to 51.3 last month from 46.4 in May, services employment fell to 47.2 from 50.7 in May; prices paid for services inputs eased to a still-high 67.5 from 68.7 in May, which was the highest level since November 2022.
• U.S. May factory orders surge +8.2%, in-line with consensus +8.2% and vs April -3.9%; factory orders ex-transportation +0.2% vs April -0.6%; factory orders ex-defense +7.5% vs April -4.3%; nondurables orders +0.1% vs April -1.0%; nondefense cap orders ex-aircraft unrevised at +1.7%; May shipments revised to +0.4% from +0.5%; inventories/shipments ratio 1.58 months’ worth vs April 1.58 months
• The May trade deficit in-line with consensus at (-$71.5B) and vs April deficit (-$60.3B); U.S. may goods deficit $97.51B, services surplus $25.99B; the May exports (-4.0%) vs April +3.4%, imports (-0.1%) vs April (-16.3%); U.S. May exports $279.00B vs April $290.57B, imports $350.52B vs April $350.83B.
• U.S. S&P Global June final composite PMI at 52.9 (vs flash 52.8) and U.S. S&P Global June final services PMI at 52.9 (vs flash 53.1).

• TRIP shares jumped after The Wall Street Journal reported activist investor Starboard Value had built an over 9% stake in the travel company https://tinyurl.com/3e6rxdd4
• XPOF shares jumped after saying the Securities and Exchange Commission concluded its investigation into the company without acting.

• Homebuilders (LEN, TOL, LEN, KBH, DHI) shares slipped, paring recent gains as Treasury yields jumped
• US ethane producers (ET, EPD) said the gov’t has removed license requirements for shipping the gas to China, clearing the way for deliveries to the country’s ports without additional approvals
• In Packaging: Citigroup raised its Q2 EBITDA estimates for all its covered beverage packagers (CCK, AMBP, BALL, OI) by 2%-3% on average to reflect outperformance in North America and modest help from foreign exchange impacts.
• In Solar: sector outperforms as China to curb disorderly competition in industry; Beijing wants to push out lower-quality producers, stabilize prices, and limit excess capacity. That could mean fewer ultra-cheap Chinese panels flooding global markets—and more pricing power for Western players. Shares of FSLR advanced amid less competition fears; domestic installers like RUN, SEDG may benefit from rising import costs while ENPH, NXT, who are heavily reliant on Chinese components could see higher input costs could compress margins.
• In Industrials: Orders for new heavy-duty commercial trucks (CMI, PCAR) in June dropped by 36% from the same month last year, reflecting the continued weakness in the freight-hauling industry. Orders for 9,400 trucks were placed last month in the U.S., Canada and Mexico, according to the preliminary estimate from market forecaster ACT Research. The orders were down 25% from May

• In Bank Research: Wolfe Research with a few ratings changes as they downgraded PNC to Per Perform from Outperform as sees relatively less upside torque in PNC, which screens as expensive vs the Outperform-rated banks in its coverage that generate higher returns; they upgraded HBAN to Outperform saying additional fixed-rate asset repricing tailwinds and HBAN’s ability to match fund its loan growth with strong deposit growth reinforce Wolfe’s belief that NIM will expand into 2026. VLY was upgraded to Overweight at Morgan Stanley saying Valley has taken significant actions over the past year to reduce its concentration in commercial real estate, increase its reserve ratio, and build capital.
• In Bitcoin/Crypto: Bitcoin prices with a strong finish to the week, topping $110,000 today and up 2.5% on month and over 17% YTD; IREN shares jumped after announces purchase of 2,400 next-generation NVDA Blackwell B200 and B300 GPUs worth $130/says acquisition is fully funded from existing cash and expects the investment to deliver attractive risk-adjusted returns and support discussions around its AI Data Center business; RIOT said it produces 450 bitcoin in June 2025; Bitcoin miners strong WULF, CLSK, MARA, HIVE.
• In REITs: in Agency Mortgage REITs: Citizens downgraded TWO to Market Perform from Outperform, lowered ests for AGNC, ARR, DX while raised ests for IVR, NLY, ORC and TWO saying they updated its earnings models for the Agency MREIT group to reflect the current interest rate and macro environment. Prison REITs (CXW, GEO) advanced after the Senate version of the "One Big Beautiful Bill Act" aligns with the House version when it comes to spending on immigration, and the proposal should be beneficial to both.

• SMMT shares active after Bloomberg reported is in talks for $15B partnership with AZN to license Summit’s ivonescimab lung-cancer treatment.

• In Media: ROKU tgt was raised to $110 from $100 at Bank America ahead of results and raises its 2H forecast to reflect an improving macro backdrop saying Roku’s efforts over the last several years should better insulate them from macro shocks relative to prior cycles. TKO tgt was raised to $20o from 4185 at Bank America as anticipates another strong quarter from TKO, but focus will likely remain on upcoming media rights renewals.
• In Internet: META was upgraded to Hold from Underperform at Needham with no price target saying channel checks are driving upside to the firm’s estimates, but the analyst remains on the sidelines with a Hold because the firm believes Meta’s strategy diffusion wastes capital and adds risks.
• In Software: DDOG shares jumped after being added to the S&P 500 index, replacing JNPR after HPE closed its Juniper Networks deal on Wednesday. CRWD shares hit record highs after Wedbush raised its tgt to $575 from $525, saying the security software co is gaining traction with customers and deals are progressing well and notes AI is helping drive more demand.
• In AI/Data Center: CRWV announces first NVDA GB300 NVL72 Deployment. CRWV says their joint collaboration with DELL, VRT and Switch on this deployment of the Nvidia GB300 NVL72 is fundamental to their speed and agility, providing the critical support they need to turn groundbreaking technology into a reality for their customers at an unprecedented pace.