executive Summary:
- Large caps create new height
- Major Digital Employment Law signed during “Crypto Week”
- The earning season closes with a strong start
- US dollar rallies on growing trade deals
- FOMC keeps rates stable
July continued a strong run for stock by looking at S&P 500 for the third consecutive month, and Nasdac for the fourth. Interestingly, the S&P500 had no significant moves of 1% in the direction, which has not happened since July 2023. VIX, a measure of market volatility, remained relatively calm, ended around the month around 17. Big tech stock shows were the stars of the show, but other areas such as homebuilders, banks, auto suppliers and oil major also performed well. On the other hand, sectors such as logistics, entertainment and media did not perform firmly.
This month’s market rally pushed S&P 500 and Nasdaq to a new record height, which withdrawn from the post- /-lieutenary day celloff. The rally was fuel by reducing tariffs and trade stress, a strong start in earnings, and a flexible macroeconomic background. Positive development in the AI region, increase in deal activity, and the passage of large beautiful bills also promoted the market spirit. Despite some concerns about rising interest rates, the market was optimistic, supported by flexible economic data.
Trade agreements played an important role in the performance of the market. The US reached several trade deals before the August 1 deadline, including agreements with the European Union and Japan. Negotiations with China showed signs of progress, in which Treasury Secretary Besant expressed optimism about talks. However, trade tension with Canada remained high, and a federal appeal court heard arguments about the validity of the tariff. Investors focused more on low uncertainty around trade policy rather than specific tariff levels, offset the tariff effect in some areas with AI speed.
Economic data for the month was mixed. June payroll exceeded the expectations, and the unemployment rate decreased by 4.1%. However, the increase in jobs in July is expected to slow down. The initial unemployed claims fell before a slight increase for six consecutive weeks, while the issued claims remained more. CPI and PPI data came more than expected, but the housing data was generally weak. There were no signs of rate cuts in September in the July meeting of Fed, with Hawkish Tekevays. Tension continued between President Trump and Fed Chair Powell, adding the uncertainty of the market.
Index display for July:
Total return to sector performance July:
Digital property:
July kicked with an expectation ahead of “Crypto Week” which took place between 14-18 JulyWan Goal to address important crypto law. The Highlight was the way of establishing and establishing the National Innovation for the US Stabelins Act (Genius Act), which was a decisive 308–122 votes in the House on July 17 and was signed in the law by President Trump on 18 July. This landmark law installs the first federal regulatory framework for payment stabilcoin, which introduces the two-tier license system. Under $ 10 billion, stablecoin issuers with a market capitalization can obtain state-level license, while large institutions require a federal license care by the office of the Currency (OCC). The law stated that Stabecrim is supported 100% by high quality liquid assets such as US dollars or Treasury, with the revelations of the monthly reserve, strict-mani laundering (AML), no-yor-customer (KYC), and with requirements compliance with restrictions. The move aims to increase consumer protection and integrate stabelin into a regulated financial system, which is an important step for digital payments.
With the Genius Act, the Digital Asset Market Clarity (Clarity Act) advances to the House with 294–134 votes on 18 July. The bill attempts to resolve judicial disputes between Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), which proposes a functional regulatory structure for digital assets. Its purpose is to clarify the oversite responsibilities and set a clear rule for market participants, although it is still waiting for the Senate idea. Additionally, the Anti-CBDC Monitoring State Act, passed narrowly passed by a 219–210 votes, prevents the Federal Reserve from releasing a central bank Digital Currency (CBDC), which reflects confidentiality and concerns over the government’s overrech. These bills collectively indicate a change towards regulatory clarity and innovation, although their Senate travel is uncertain.
At the state level, Texas made history by establishing the first US state-managed bitcoin reserve signed in the law this month. The reserve managed by the Texas controller of public accounts with guidance from a Crypto Investment Advisory Committee restrains eligible assets for people with more than $ 500 billion market cap – which is currently only bitcoin – and allows development through purchases, thorns, airDrops, gains and donations. The move takes Texas as a leader in a state-level crypto adoption eclipse, although the Governor of Arizona veto a similar bitcoin reserve bill on 1 July, exposing the Divisional State approaches.
Looking forward, the Senate will play an important role in shaping these initiatives. The Genius Act, already the Senate-Anumodit, can reach the President’s desk before the August holiday if it passes without major amendments. The Clarity Act and the Anti-CBDC Act are facing more investigation, with potential debate in September, especially partial partitions on CBDC issues. The working group’s July 22 report can affect these discussions, potentially proposed “National Digital Asset Stock Pile” or additional legislative measures. Internationally, Crypto-assets (MICA) regulation continues its phased implementation with level 2 and 3 lesson development in the European Union markets, while the UK carries forward its cryptoset regime, which is expected to have a final rule in 2026.
Earning Comment:
The results have been solid, the results are solid, reporting earnings for Q2’25 with ~ 60% S&P 500 companies, but the approach is uncertain. So far this reporting cycle is reporting EPS above estimates under only 83% of companies, which is 5 and 10-year averages 78% and above an average of 75% respectively. The total earnings are surprise +7.3%, currently below an average of 5 years of 9.1%, but above 6.9%at an average of 10 years. The positive EPS surprise is leading by the energy sector, which is printed above estimates +12.7%, followed by financial (10.8%) and communication (9.0%). Only industrial has surprised a negative EPS that came down in 2.4% below estimates.
On the development front, more areas are in red, but the increase in overall income is above recent trends. Currently the average income growth rate is 9.5%. There are currently six fields reporting EPS development, headed by technology (21.6%), financial (20.3%), and communication (18.8%), while consumers discretionary (-19.5%), and health care (-8.1%) are clear legords.
Sales surprise and development are also trending well, reporting positive sales growth with nine regions, only energy (-5.8%) and consumer discretionary (-0.3%) with reporting contractions. The average sales growth figure for the quarter is currently at 6.6%. The sale surprise for the first quarter is led by energy companies with an average beat of 6.9%, with an average of 0.9% average. The overall reverse sales are surprising that till date the information is 2.6%.
Results of sales and income by S&P sector:
2-day price reaction releases after income:
Mention of earnings:
Tariff
Liberal AI
Fed rate deduction barriers:
Bitcoin:
Dxy:
GDP Roses in Q2 under the leadership of net exports:
Business deal:
looking ahead:
August Q2’25 will bring further economic data along with jobs, inflation and GDP along with the conclusion of income season. While the Federal Reserve will not get again until mid -September, August data will be the leading drivers of their possible policy changes. In the last 15 years, an average return of -0.45%has been seen in the month of August, with 8 years in red and 7 years in green. Only September saw worse returns during the time limit with an average return of -0.94%.
Economic Calendar:
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