InterMarket Analysis Update for Monday July 14, 2025

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The Intermarket Analysis weekly video update for July 14, 2025, examines various markets to gain insights into the S&P 500’s performance, as no market operates in isolation. Key points include:
Valuation: The S&P 500 is historically expensive, with a PE ratio above 20 (currently 22.1), compared to mid-caps (16.1) and small caps (15.5). The forward PE is also around 22, suggesting high valuations but no immediate shift from last week’s trends. Mega cap stocks (e.g., Magnificent Seven) have a PE of 29.1, driving much of the market’s high valuation as well as gains.
Growth vs. Value: Growth continues to outperform value, indicating a positive market sentiment. Small and mid-cap growth-to-value ratios are positive but weakened slightly on Friday.
Inflation and Commodities: Inflation is ticking up slightly, with the CRB index in an uptrend. Commodities including copper are strong, suggesting economic optimism, while aluminum, corn, and wheat remain in downtrends. Oil is rising but still in a downtrend, and diesel prices may signal inflationary pressure.
Sectors and Indexes: The S&P 500, NASDAQ, and NASDAQ 100 hit all-time highs, but small and mid- caps lost gains on Friday. Tech and industrials are strong, while staples, real estate, and healthcare underperforming the S&P 500. Financials are a concern, with potential support from upcoming earnings reports.
Bonds and Yields: The 10-year yield is rising, and bonds are underperforming stocks. Junk bonds are outperforming government bonds, and the stock-to-bond ratio favors stocks. Long-term bonds remain in a downtrend.
Currencies and Metals: The dollar is oversold but in a long-term downtrend. The euro, pound, and yen are up against the dollar. Silver is outperforming gold, which is trading sideways. The copper-to-gold ratio suggests economic strength.
Market Trends: Growth-oriented indexes (NASDAQ 100, FANG) and ETFs (ARK, total US stock) are in uptrends. Emerging markets and high-leverage loans signal economic optimism. Bitcoin is up significantly, and semiconductors are hitting all-time highs.
Correlations: Stocks and oil, as well as stocks and the 10-year yield, show positive correlations, which is unusual as stocks typically move inversely to yields. The S&P 500 and transports also show strong correlation.
Positive Factors: Growth, tech, semiconductors, copper, silver, emerging markets, and high-leverage loans are in uptrends. Most indexes (NASDAQ, NYSE, Wilshire) are strong, with broad market participation.
Negative Factors: The dollar, Dow Jones composite, mid-caps, small caps, and micro caps are underperforming, though showing improvement. No major shifts from last week’s trends.
Overall, the market remains positive, driven by growth stocks and mega caps, but high valuations and rising inflation/yields warrant caution.

PDF of Slides:
https://drive.google.com/file/d/17sFZ3WXtFI3H4TEHWK1rDlizDFdf2hjx/view?usp=sharing

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!