S&P 500 Daily Update for Monday July 7, 2025

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Market Update Summary for Thursday, July 3, 2025
Outlook for Monday July 7, 2025
Market Performance:
The market closed up 0.83% on lower-than-average volume due to a shortened trading day before the July 4th holiday.
The S&P 500 opened above R1 (6241), went above R2 (6254), and closed slightly below the intraday high, holding gains without significant selling.
Positive trend across all time frames, but the market is showing signs of being overextended, with sentiment becoming exuberant.
Economic Data:
Employment Situation Report: Stronger-than-expected non-farm payrolls at 147,000 (vs. 120,000 expected). Previous reports revised upward, indicating economic strength. Unemployment rate dropped to 4.1% (from 4.2%). Average hourly earnings rose 0.2% (below 0.3% expected), suggesting easing inflationary pressure.
Other Reports: Trade balance showed a larger deficit ($71.5B vs. $70.5B expected). Weekly jobless claims fell to 233,000 (vs. 244,000 expected). ISM services index rose to 50.8 (above 50, indicating expansion). Factory orders grew 8.2% (vs. 7.9% expected).
Interest Rates: 10-year yield rose to 4.35%, approaching 4.5%, which could pose concerns if breached.
Dollar: Slight bounce but remains in a downtrend, supporting stock market gains.
Market Sentiment and Technicals:
Sentiment is extremely positive (78, up from 63), raising caution about potential over-optimism.
Technical indicators (e.g., RSI, CCI, Stochastics, McClellan Oscillator) show extreme positive readings, suggesting the market is overbought but not necessarily reversing soon.
Advance-decline ratios and momentum oscillators indicate broad market strength, with growth stocks (mega caps, tech, semiconductors) leading.
S&P 500 is significantly above its 20- and 50-period moving averages, entering the +4 standard deviation channel, a rare occurrence.
Golden Cross confirmed for the S&P 500 (50-day moving average crossing above 200-day), signaling bullish long-term trends.
Sector Highlights:
Tech and Semiconductors: Boosted by the Trump administration’s decision to lift restrictions on chip design software exports to China, though security concerns were noted.
Growth vs. Value: Growth stocks outperformed value, with large, mid, and small-cap growth-to-value ratios improving.
Financials and Banks: Strong performance following successful stress tests last week, with the financial sector hitting all-time highs.
Defensive Sectors: Staples and real estate lagged, while discretionary, communication, and tech led gains.
Geopolitical and Macro Risks:
Potential geopolitical tensions (Iran-Israel, Russia-Ukraine, India-Pakistan) and domestic uncertainties could impact markets.
Rising interest rates are a concern, though the market currently anticipates two rate cuts in 2025.
Outlook for Monday, July 7, 2025:
No economic reports scheduled, likely leading to low activity or volatility.
Seasonality favors positive performance in early July, historically the strongest part of the month.
The market remains in a confirmed uptrend but is overbought, suggesting caution for a potential slowdown or profit-taking post-holiday.
Key levels to watch: S&P 500 pivot points, continued strength in growth stocks, and interest rate movements (4.5% threshold on 10-year yield).
Conclusion:
The S&P 500 is trending positively but showing signs of overextension. While economic data supports growth, exuberant sentiment and geopolitical risks warrant caution. Investors should monitor for potential slowdowns or corrections, especially after the holiday weekend.

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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!