Market Check - Week of June 30
Happy Independence Day / Big Beautiful Bill Passes
Todays edition is 24 hours late - thanks for your patience. Given we have started the week, I’ll share my thoughts on stocks and sectors later tonight (once we get past todays session
Happy 4th from Seattle, gang. Thank God for America. Land of the Free. Because of the Brave. Still the best house in a bad neighborhood. Look the fireworks from Seattle! (credit Sigma Sreedharan for this amazing photo)
U.S. markets kicked off July with a burst of volatility and renewed optimism, as the passage of the “Big Beautiful Bill” sent ripples through Wall Street and Main Street alike.
The sweeping legislation, now law, locks in permanent tax cuts for individuals and small businesses, overhauls student loan structures, and brings a raft of new incentives for overtime and tipped wages, moves cheered by business leaders but flagged by some economists for their long-term impact on deficits and inflation.
While the bill’s immediate boost to disposable income and corporate sentiment helped power the S&P 500 and Nasdaq to fresh highs, billionaire Ray Dalio’s warning of “big, painful disruptions” ahead - thanks to projected trillion-dollar deficits, kept bond markets on edge.
The political drama didn’t stop at fiscal policy: Elon Musk’s high-profile split from Donald Trump dominated headlines after Musk announced a new “America Party” in protest of the bill’s spending, prompting a war of words that rattled Tesla shares and injected fresh uncertainty into the business-political landscape.
Meanwhile, tariff tensions are back in focus with the White House set to send out dozens of trade ultimatum letters: unless new deals are struck by July 9, tariffs on goods from key partners could surge as soon as August 1. This raises the specter of renewed trade frictions just as global supply chains begin to heal.
Seasonality offers a silver lining: July has historically been one of the strongest months for U.S. equities, with the S&P 500 averaging a 1.4% gain over the past 35 years and the Nasdaq riding a nine-year winning streak, though volatility often ticks up mid-month as traders digest fresh policy signals and summer liquidity thins.
Looking ahead, this week brings a loaded schedule.
Investors will be watching closely as the July 8–9 trade deadlines approach, with negotiations underway between the U.S. and partners including the EU, Japan, and Vietnam. Meanwhile, the release of Fed minutes and economic data from the UK and China will give markets a clearer sense of global growth momentum. Datadog’s upcoming inclusion in the S&P 500 on July 9 could boost tech sentiment. The passage of the GOP’s tax and spending bill may have longer-term implications for debt and inflation. Finally, the Fed’s next move remains in focus. Despite earlier dovish guidance from Chair Powell, the latest jobs report has significantly lowered the odds of a rate cut at the July 30 meeting.
With sentiment running high but key decisions looming, this week could mark a turning point. If trade progress continues and global data holds up, the rally may have more room to run. But with valuations starting to get stretched and policy risk rising, any surprise could trigger a potential repricing.
In summary, the market is delicately balancing between the influence of fundamentals, geopolitics, and central banks. We also know August - October is seasonal weakness so lets keep that in mind as we proceed.
I will be giving a seperate note on stocks later today. Stay tuned. Premium members will be getting the heads up via substack chat shortly.
Trade wisely,
Les