Daily Update Podcast for Wednesday July 16, 2025

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Market Update Summary for Tuesday, July 15, 2025
Outlook for Wednesday July 16, 2025
Market Performance:
The S&P 500 experienced a down day, with a 0.4% decline, showing internal weakness despite the modest percentage drop.
The S&P set an intraday all-time high above 6,300 but closed at the day's low below S1 at 6247.
Growth sectors, particularly semiconductors (e.g., NVIDIA), performed well, driven by news of high-end chip sales to China. The NASDAQ and NASDAQ 100 hit all-time highs, while value stocks and the broader market weakened.
Financials dropped 1.7% despite strong earnings from JPMorgan Chase and BlackRock, with a "sell the news" reaction. Citigroup rose 3.7%, while Wells Fargo fell 5.5%.
Mid-caps and small-caps saw sharper declines, with value & growth down.
Key Economic Data:
CPI came in hotter than expected at 0.3% (vs. 0.2% forecast), with core inflation surprising the market, which had grown complacent.
Year-over-year CPI is rising, suggesting persistent inflation around 3%, above the Fed’s 2% target. This led to a 10-year yield approaching 4.5% (at 4.49%), potentially pressuring stocks.
The New York Empire State Manufacturing Index turned positive, indicating some regional economic improvement.
Market Dynamics:
The S&P 500 opened with a gap up due to a lower-than-expected headline CPI. It fell below key pivot levels (R2, R1, daily pivot) and saw selling into the close.
Sentiment remains highly positive (74, near the cautionary 75 level), with low fear and minimal hedging, though some fear emerged late in the session.
Volume remains below average, typical for summer, but a spike in selling volume could signal deeper concerns.
Technical indicators show short-term weakness (e.g., StochRSI extreme negative, momentum oscillators declining), but intermediate and long-term trends remain positive. The SPX is closer to the 20-period moving average, easing overbought conditions.
The Zahorchak method issued a rare long-term sell signal, though not yet confirmed by other indicators.
Sector and Ratio Trends:
Growth outperformed value, with the growth-to-value ratio hitting new highs. Tech and semiconductors led, while staples and financials lagged.
International-focused stocks outperformed domestic ones despite tariff concerns, which were blamed for some of the day’s decline.
The S&P equal-weighted index underperformed the cap-weighted index, and market breadth narrowed slightly, though advance-decline lines held above moving averages.
Outlook for Wednesday, July 16, 2025:
Key reports include PPI, MBA Mortgage Applications, Industrial Production, and Capacity Utilization. Geopolitical developments and trade/tariff news will remain influential.
Seasonality turns neutral to negative for the Dow and S&P, but neutral to positive for the NASDAQ. Options expiration on Friday could drive volatility, though historical data suggests more upside than downside.
The second half of July historically underperforms the first half, with potential for further pullbacks based on patterns in 2023 and 2024 (significant mid-July to October declines followed by recoveries).
Conclusion:
The market remains in a positive trend across all time frames but shows signs of a pullback, possibly working off overbought conditions.
Growth sectors continue to drive strength, while value and small-caps lag. Inflation and rising yields are concerns, but no major reversal is confirmed yet.
Wednesday’s data may provide further direction, with the market potentially pausing before resuming its upward trend.

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!