Market Recap: 14 – 18 July 2025
Financial Markets
US Stock Market
The week was slightly positive for the main indices with the S&P500 and the NASDAQ 100 gaining 0.6% and 1.3%, respectively. Markets continue climbing slowly. The small cap index (Russel 2000) was up by 0.4% and sits slightly above the 200-day moving average, a short-term support. Trading volumes were average.
COMMODITIES
Precious metals continue consolidating and holding their levels. Gold and silver lost 0.2% and 0.6%, respectively. Gold is still close to the previous all-time high and has been in the range 3100-3500$. Silver has been strong and will likely stay above 35$/oz over the next weeks.
WTI crude oil went up to 66.4$/bbl and the trading range for the near future will likely be 64-71$/bbl.
Bitcoin went up to 123k$ but closed the week at 118k$. Bitcoin has support at ~112k$.
US DOLLAR, MONEY SUPPLY
The relative strength of the US dollar (DXY) recovered slightly to ~98.5. The EUR/USD is around 1.163$, the GBP/USD is at 1.342$, and the USD/JPY is at 148.80 JPY.
US M2 money supply at the date of 26th May 2025 was up by 0.36%, showing a slow increase over the previous month – credit institutions didn’t stop lending so far. If the money supply was going down, it would be another warning sign for the economy and equities.
The national financial conditions index (NFCI) released on 7th July 2025 loosened by 3.1%. Note that this indicator is delayed by two weeks. Positive numbers in the NFCI mean tighter financial conditions, while negative numbers indicate looser financial conditions.
BONDS AND OPTIONS
US bond yields were essentially unchanged this week. Yields now sit at 3.869% for the 2-year and 4.420% for the 10-year. The yield curve has uninverted since a year ago, and lower yields are expected in the next few years, likely as a consequence of a recession and/or interest rate cuts. However, long-term growth and inflation expectations remain at 4.9-5.0%.
The VIX rose during the week, but closed unchanged at ~16, a level that shows some complacency as the overall market is quite expensive and the risks of overvaluation are naturally high. Risk premiums in the options market are less attractive. Similarly to previous weeks, it is our opinion that the overall risk in the stock market (high valuations in the big caps) and uncertainty about the US and worldwide economy is considerable. Thus, any equity purchases must be strategic and opportunistic!
Comment Section
The US equity markets continue to slowly make new all-time-highs and the probability of any disappointment pushing the market down is high.
The trade tariff negotiations with the EU continues, but Trump pushes for up to 20% minimum tariffs on European Union.
An example of such a disappointment is the new threat of a 30% tariff on Mexico and the EU starting on August, as announced by Donald Trump. Israel continues their offensive in Gaza and a solution to the conflict is not in sight.
The earnings season has begun. Over the next weeks we’ll have a better idea of company’s earnings and outlook for the rest of the year. In general, we believe the odds are on the side of an equity market correction over the next months.
Have a nice weekend, and good luck!!!
Recommended Videos
Video: This is How Money Works – Machiavelli’s Lessons on Wealth
Channel: Truth
Video: Rockefellers Personal 38 Letters Of Power He Left His Son (Use These Or Be Left Behind)
Channel: Nic Munoz
Video: This Is What Happens If Trump Does The Unthinkable…
Channel: George Gammon
