3 things we are watching in July. Investors still stubbornly bearish after +28% gain from April lows.

VIDEO: We are keeping a “side eye” on a few things in July, including tariff deadlines, FOMC rate decision and the favorable seasonals.  The latest AAII data shows this remains one of the most hated rallies ever

Please click below to view our Macro Minute (duration: 4:32).

Equities started the first day of July flat with YTD gains at +5.4%. As we look ahead, investors are keeping a “side eye” on a few things:

• The 3 things at the top of mind are:
  – July 9th date when the “tariff exemptions” are lifted = unknown
  – July 29th-30th FOMC meeting = no cut expected, but cut positive
  – July seasonals = favorable
  – BONUS: is Trump-Elon feud starting again

• According to Mark Newton, Head of Technical Strategy, the equal-weight S&P 500 RSP 0.27%  has broken out which is a good sign of market expanding breadth. Therefore, in his view, “under the hood,” this is constructive. And he makes a similar comment about regional banks KRE 0.75%  which he also sees as having broken out. Again, another positive.
• What is notable is the underperformance of high momentum stocks. As shared by Ian K (x.com), the Goldman Sachs High Beta Long/Short Momentum index saw its largest single-day decline since the “Deep Seek” moment in January. Was the renewed feud between Trump-Elon behind this? Tesla shares fell today and are down -18% in just the past week alone.
• Also contributing to this momentum pullback is the Trump administration today stating they will not seek to extend the tariff waiver, which is set to be lifted on July 9th. On polymarket.com, the odds of a “remove majority of reciprocal tariffs by 90 day deadline” plunged from 70% to 47%.
• Of course, investors have to weigh whether this is simply a “negotiating tactic” as we get closer to July 9th or if this is definitive. When it comes to trade, we have seen more instances of counterparties responding to pressure and thus, opening the way for these tariff waivers to be extended.
• In our view, we think the 47% probability is arguably too low. I mean it is essentially 50/50, but the last 4 months would argue the odds should be higher. This could be a positive surprise.
• ISM Manufacturing was reported this week and came in at 49.0, a slight beat. The pricing and tariff commentary was interesting. It is clear there are discussions between suppliers and buyers about who absorbs the tariffs. But the overall picture for June is not that ominous. There is not a widespread evidence of price pressures. The ISM Manufacturing Price Index is still elevated at 69.7 with “price increases driven by steel and aluminum prices in June.” About 45.6% of companies increased prices.
• The JOLTS data was largely in line but for May above the April levels at 7.8 million vs expected 7.3mm. Some economists noted that it was restaurants that posted many of the job openings, reflecting the replacement of many workers. Is this related to ICE deportations? It is likely.
• The macro data this week is below. The most important ahead is the June Jobs Report on Thu:
  – 6/30 Mon 10:30 AM ET: Jun Dallas Fed Manuf. Activity Survey -13 vs -14e
  – 7/1 Tue 9:30 AM ET: Powell Participates in Panel with Lagarde, Bailey, Ueda
  – 7/1 Tue 9:45 AM ET: Jun F S&P Global Manufacturing PMI    52.9 vs 52.0e
  – 7/1 Tue 10:00 AM ET: Jun ISM Manufacturing PMI    49.0 vs 48.7e
  – 7/1 Tue 10:00 AM ET: May JOLTS Job Openings    7769k vs 7300ke
  – 7/3 Thu 8:30 AM ET: Jun Non-farm Payrolls    110ke
  – 7/3 Thu 8:30 AM ET: May Trade Balance    -71be
  – 7/3 Thu 9:45 AM ET: Jun F S&P Global Services PMI    53.1e
  – 7/3 Thu 10:00 AM ET: Jun ISM Services PMI    50.8e
  – 7/3 Thu 10:00 AM ET: May F Durable Goods Orders MoM    16.4%e
  – 7/4 Fri: Independence Day (Market Closed)
• Lastly, sentiment remains unusually bearish in the midst of the rise in stocks. In fact, as shown below, AAII is more bearish ever seen (20-week average) after a 28% than seen in the past 10 years:
  – After 28% rally dates, AAII sentiment (20-wk avg)
  – Spring 2017 –> +8% (AAII net bulls, 20-wk avg)
  – Summer 2019 –> +4%
  – Spring 2020 –> +0%
  – Spring 2023 –> -5%
  – June 2025 –> -22%
• You can see how much June is a huge outlier compared to other years. We have discussed in details the reason for this. But suffice it to say, this AAII data shows this is the “most-hated V-shaped rally” ever. Literally. And it is because many investors remain wary of tariffs, geopolitical risks, and many simply missed the explosive recovery rally.

BOTTOM LINE: Still “most hated rally”

This still remains the “most hated” V-shaped stock rally. We view Bitcoin as a leading indicator and thus, we expect stocks to reattain all time highs, which Bitcoin achieved last week. We see S&P 500 reaching 6,600 by year-end.

And the expected drivers for this upside are:

• Still most hated rally
• Sizable perception gap: Tariff “bark worse than bite”
• Hedge funds increased short interest recently
• $7 trillion cash on sidelines
• Investment outlook better now than in Feb 2025:
  – tariff visibility
  – tax and de-regulation visibility
  – US cos survived 5^th major “stress test”
  – Fed more dovish in 2026

As for what we would buy

• Washed out stocks
• MAG7 & Bitcoin
• Industrials
• Financials: Large-cap and regional banks
• Small-caps
  

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45 SMID Granny Shot Ideas: We performed our quarterly rebalance on 5/22. Full stock list here -> Click here

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Key Incoming Data July:

• 7/1 9:45 AM ET: Jun F S&P Global Manufacturing PMI Tame
• 7/1 10:00 AM ET: May JOLTS Job Openings Mixed
• 7/1 10:00 AM ET: Jun ISM Manufacturing PMI Tame
• 7/3 8:30 AM ET: Jun Non-farm Payrolls
• 7/3 8:30 AM ET: May Trade Balance
• 7/3 9:45 AM ET: Jun F S&P Global Services PMI
• 7/3 10:00 AM ET: May F Durable Goods Orders MoM
• 7/3 10:00 AM ET: Jun ISM Services PMI
• 7/8 6:00 AM ET: Jun Small Business Optimism Survey
• 7/8 9:00 AM ET: Jun F Manheim Used Vehicle Index
• 7/8 11:00 AM ET: Jun NYFed 1yr Inf Exp
• 7/9 2:00 PM ET: Jun FOMC Meeting Minutes
• 7/15 8:30 AM ET: Jun Core CPI MoM
• 7/15 8:30 AM ET: Jul Empire Manufacturing Survey
• 7/16 8:30 AM ET: Jun Core PPI MoM
• 7/17 8:30 AM ET: Jul Philly Fed Business Outlook
• 7/17 8:30 AM ET: Jun Retail Sales
• 7/17 9:00 AM ET: Jul M Manheim Used Vehicle Index
• 7/17 10:00 AM ET: Jul NAHB Housing Market Index
• 7/17 4:00 PM ET: May Net TIC Flows
• 7/18 10:00 AM ET: Jul P U. Mich. 1yr Inf Exp
• 7/22 10:00 AM ET: Jul Richmond Fed Manufacturing Survey
• 7/23 10:00 AM ET: Jun Existing Home Sales
• 7/24 8:30 AM ET: Jun Chicago Fed Nat Activity Index
• 7/24 9:45 AM ET: Jul P S&P Global Services PMI
• 7/24 9:45 AM ET: Jul P S&P Global Manufacturing PMI
• 7/24 10:00 AM ET: Jun New Home Sales
• 7/24 11:00 AM ET: Jul Kansas City Fed Manufacturing Survey
• 7/25 8:30 AM ET: Jun P Durable Goods Orders MoM
• 7/28 10:30 AM ET: Jul Dallas Fed Manuf. Activity Survey
• 7/29 9:00 AM ET: May S&P CS home price 20-City MoM
• 7/29 10:00 AM ET: Jul Conference Board Consumer Confidence
• 7/29 10:00 AM ET: Jun JOLTS Job Openings
• 7/30 8:30 AM ET: 2Q A GDP QoQ
• 7/30 2:00 PM ET: Jul FOMC Decision
• 7/31 8:30 AM ET: Jun Core PCE MoM
• 7/31 8:30 AM ET: 2Q ECI QoQ

Key Incoming Data June:

• 6/2 9:45 AM ET: May F S&P Global Manufacturing PMI Tame
• 6/2 10:00 AM ET: May ISM Manufacturing PMI Tame
• 6/3 10:00 AM ET: Apr JOLTS Job Openings Tame
• 6/3 10:00 AM ET: Apr F Durable Goods Orders MoM Tame
• 6/4 9:45 AM ET: May F S&P Global Services PMI Tame
• 6/4 10:00 AM ET: May ISM Services PMI Tame
• 6/4 2:00 PM ET: Jan Fed Releases Beige Book Mixed
• 6/5 8:30 AM ET: 1Q F Unit Labor Costs Tame
• 6/5 8:30 AM ET: 1Q F Nonfarm Productivity QoQ Tame
• 6/5 8:30 AM ET: Apr Trade Balance Tame
• 6/6 8:30 AM ET: May Non-farm Payrolls Tame
• 6/6 9:00 AM ET: May F Manheim Used Vehicle Index Tame
• 6/9 11:00 AM ET: May NYFed 1yr Inf Exp Tame
• 6/10 6:00 AM ET: May Small Business Optimism Survey Tame
• 6/11 8:30 AM ET: May Core CPI MoM Tame
• 6/12 8:30 AM ET: May Core PPI MoM Tame
• 6/13 10:00 AM ET: Jun P U. Mich. 1yr Inf Exp Tame
• 6/16 8:30 AM ET: Jun Empire Manufacturing Survey Tame
• 6/17 8:30 AM ET: May Retail Sales Tame
• 6/17 10:00 AM ET: Jun NAHB Housing Market Index Tame
• 6/18 9:00 AM ET: Jun M Manheim Used Vehicle Index Mixed
• 6/18 2:00 PM ET: Jun FOMC Decision Mixed
• 6/18 4:00 PM ET: Apr Net TIC Flows Tame
• 6/20 8:30 AM ET: Jun Philly Fed Business Outlook Tame
• 6/23 9:45 AM ET: Jun P S&P Global Services PMI Tame
• 6/23 9:45 AM ET: Jun P S&P Global Manufacturing PMI Tame
• 6/23 10:00 AM ET: May Existing Home Sales Tame
• 6/24 9:00 AM ET: Apr S&P CS home price 20-City MoM Tame
• 6/24 10:00 AM ET: Jun Conference Board Consumer Confidence Tame
• 6/24 10:00 AM ET: Jun Richmond Fed Manufacturing Survey Tame
• 6/25 10:00 AM ET: May New Home Sales Tame
• 6/26 8:30 AM ET: May P Durable Goods Orders MoM Tame
• 6/26 8:30 AM ET: May Chicago Fed Nat Activity Index Tame
• 6/26 8:30 AM ET: 1Q T GDP QoQ Tame
• 6/26 11:00 AM ET: Jun Kansas City Fed Manufacturing Survey Tame
• 6/27 8:30 AM ET: May Core PCE MoM Mixed
• 6/27 10:00 AM ET: Jun F U. Mich. 1yr Inf Exp Tame
• 6/30 10:30 AM ET: Jun Dallas Fed Manuf. Activity Survey Tame

Economic Data Performance Tracker 2025:

Economic Data Performance Tracker 2024:

Economic Data Performance Tracker 2023: