July 18th, 2025: Weekly Market Review

1. In June 2025, U.S. inflation data emerged as a focal point on the economic front, characterized by its surprisingly tame nature despite a modest uptick. 

The Consumer Price Index (CPI) rose by 0.3% month-over-month, pushing the annualized inflation rate to 2.7% from 2.4%, according to the Bureau of Labor Statistics. This increase, while aligning with economist forecasts, was minimal and reflected only the initial impact of President Trump’s tariffs, with notable price rises in tariff-sensitive categories like household furnishings (up 1%) and appliances (up 1.9%). Core CPI, excluding volatile food and energy, rose 0.2% monthly and 2.9% annually, slightly below expectations, signaling restrained underlying price pressures. Factors such as declining airfares, hotel costs, and vehicle prices, alongside businesses’ use of pre-tariff inventories, have mitigated broader inflationary effects. Economists like Gregory Daco note that tariff impacts are gradual, with strategies like inventory front-loading delaying consumer price shocks. This subdued inflation landscape, despite tariff pressures, has kept markets stable and supports the Federal Reserve’s cautious stance on interest rate cuts, though future reports may reveal stronger tariff-driven price increases. (See item 5K further below to access additional information)  REF: Bloomberg

2. You don’t know him yet… but you will!  Meet Roy Lee, also known as Chungin Lee, is a 21-year-old Korean American entrepreneur who dropped out of Columbia University after his suspension for creating Interview Coder, an AI tool initially designed to help software engineers cheat on technical job interviews. 

With co-founder Neel Shanmugam, Lee transformed this tool into Cluely, a San Francisco-based AI startup that raised $5.3 million in seed funding in April 2025 from Abstract Ventures and Susa Ventures, followed by a $15 million Series A round led by Andreessen Horowitz in June 2025, achieving $7 million in annual recurring revenue (ARR) by July 2025. Lee’s provocative marketing, including viral X posts and a bold launch video, has made him a polarizing figure, with his “cheat on everything” ethos sparking ethical debates. I believe Cluely’s software is poised to power the next major AI breakthrough, complementing the hardware being developed by Jony Ive and Sam Altman, whose rumored device, dubbed “IO,” is a small, wearable gadget that continuously listens to conversations and monitors surroundings, potentially revolutionizing personal AI integration.  More details on the io story (Click Here).

Cluely offers a real-time, undetectable desktop assistant that provides context-aware support during virtual interactions like job interviews, sales calls, and exams, using a hidden in-browser window to analyze screen content and audio for live suggestions and answers. Evolving from its origins in bypassing LeetCode challenges, Cluely now emphasizes productivity, with enterprise features driving its $7 million ARR, including a $2.5 million contract with a public company. While Lee compares Cluely to once-disruptive tools like calculators, critics argue it undermines fairness, with competitors like Truely developing detection tools. Paired with Ive and Altman’s IO hardware, Cluely’s software could enable seamless, real-time AI assistance embedded in daily life, but its ethical challenges raise concerns about integrity in global tech and education systems, potentially reshaping workplace and academic standards in AI-driven economies.  Click onto pictures below to access videos.  REF: Cluely, TechCrunch, Fortune

3. The U.S. House of Representatives passed three significant cryptocurrency-related bills during what was dubbed “Crypto Week”: the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, the Digital Asset Market Clarity (CLARITY) Act, and the Anti-CBDC Surveillance State Act.

• The GENIUS Act, which passed the House with a 308-122 vote and the Senate with a 68-30 vote, establishes a federal framework for stablecoins – digital currencies pegged to stable assets like the U.S. dollar – defining them as distinct from securities or commodities and subjecting issuers to state and federal oversight with strict reserve and transparency requirements.  REF: Congress.gov

• The CLARITY Act, passing the House 294-134, aims to clarify regulatory jurisdiction by assigning oversight of digital commodities like Bitcoin to the Commodity Futures Trading Commission (CFTC) while the Securities and Exchange Commission (SEC) regulates crypto-related securities, reducing the SEC’s enforcement power seen during the Biden administration. REF: Congress.gov

• The Anti-CBDC Surveillance State Act, passing narrowly at 219-210, prohibits the Federal Reserve from issuing a central bank digital currency (CBDC), citing concerns over government surveillance and control of financial transactions.  REF: Congress.gov

All three bills advanced through the House on July 17, 2025, after a contentious process involving a procedural vote initially stalled by conservative Republicans, who were persuaded by President Trump’s intervention to support the legislation. The GENIUS Act, having passed both chambers, awaits President Trump’s signature to become law, while the CLARITY Act, lacking a Senate counterpart, requires further Senate deliberation, with a target for completion by September 30, 2025. The Anti-CBDC Act, also passed by the House, faces an uncertain path in the Senate due to its narrower bipartisan support, with only two Democrats voting in favor. These bills reflect a Republican-led push, supported by Trump, to position the U.S. as a global crypto leader, though Democratic opposition, particularly to the Anti-CBDC Act, highlights concern about regulatory gaps and potential ties to Trump’s business interests.

The implications of these bills are far-reaching. The GENIUS Act fosters stablecoin innovation by providing regulatory clarity, potentially boosting their use in payments and strengthening the U.S. dollar’s global role, though critics warn of risks to banking stability if not tightly regulated. The CLARITY Act could shield the crypto industry from aggressive SEC enforcement, encouraging institutional adoption and innovation, but its Senate passage remains uncertain, potentially delaying comprehensive market rules. The Anti-CBDC Act safeguards financial privacy by blocking a government-controlled digital dollar, appealing to those wary of surveillance, but it may limit U.S. competitiveness in global digital finance if other nations adopt CBDCs. Globally, these laws could attract crypto businesses to the U.S., enhancing its financial innovation hub status, but they also risk alienating trading partners like the EU and UK, who are advancing their own crypto regulations, potentially complicating international coordination.  Click onto pictures below to access videos.  REF: Coindesk, CNBC, BARRON’S

NOTE: Not investment advice or recommendations. Investor should consider the investment objective, risks, charges and expenses carefully before investing.  For additional information about securities mentioned above or in the video, please visit the companies’ websites of referenced securities mentioned above.  Read carefully before investing.

With the current macro-economic backdrop, below are areas we currently favor:

• Fixed Income – Short-term Corporates (Low-Beta)
• Fixed Income – Corporates High Yield as Opportunistic Allocation (Low-Beta)
• Businesses that contribute to and benefit from AI & Automation (Market-Risk)
• Cyber-Security & Software (Market-Risk)
• Fintech & Financials (Market-Risk)
• Digital Asset – Bitcoin (Market-Risk/Hedge)
• Cloud Computing (Market-Risk)
• Biotechnology (Market-Risk)

4. World Watch

4A. The Brook Mine in Ranchester, Wyoming, opened (on 7/11/25) as the first new U.S. rare earth element (REE) mine in over 70 years, an important step toward reducing reliance on China, which dominates over 80% of global REE production. 

Operated by Ramaco Resources, the mine extracts critical minerals like neodymium and dysprosium from coal and clay, offering a cost-effective, low-radioactivity alternative to traditional hard-rock mining. With an estimated 1.7 million tons of rare earth oxides, it could meet 3-5% of U.S. demand for permanent magnets used in electric vehicles, wind turbines, and military equipment. Celebrated by U.S. Energy Secretary Chris Wright and Wyoming Governor Mark Gordon, the mine strengthens national security by countering China’s geopolitical leverage over critical mineral supplies.

The Brook Mine’s economic potential is significant, with a projected net present value of $1.197 billion and a 38% internal rate of return, driven by an annual output of 1,242 tons of oxides. Supported by a $6.1 million Wyoming grant, Ramaco aims to build a domestic supply chain, processing REEs on-site and potentially producing magnets and semiconductors. This aligns with efforts to boost U.S. energy independence, creating jobs and stimulating Wyoming’s economy. However, challenges include the $533 million development cost and competition from China’s low-price market. Despite these hurdles, the mine enhances U.S. economic resilience and national defense by securing critical supply chains, though scaling operations remains a key obstacle. Click onto picture below to access video.  REF: AP, Y-Finance, KTVQnews, Ramaco

4B. President Donald Trump’s tariff policies, reintroduced in 2025, have significantly reshaped global trade dynamics, dominating economic news worldwide. 

The U.S. imposed a 30% tariff on European Union goods (on 7/14/25), following 35% levies on Canada and 25% on Japan and South Korea, citing trade imbalances. These tariffs generated $99.6 billion in U.S. revenue by July 2025, with $26.6 billion collected in June alone. Aimed at protecting domestic industries, the policy has driven up import costs, prompting businesses globally to stockpile goods to mitigate price hikes – a short-term strategy that cannot persist as inventories deplete. This has heightened trade tensions, with affected nations threatening retaliation, risking disruptions to global supply chains and increasing costs for consumers.

The implications for economies outside the U.S. are substantial, with higher U.S. import costs straining exporters in the EU, Canada, Japan, and South Korea. These nations face reduced competitiveness in the U.S. market, potentially shrinking export revenues and slowing GDP growth. For example, Canada’s trade-dependent economy could see manufacturing and energy sectors hit hard, while Japan and South Korea may face challenges in their tech and automotive exports. Retaliatory tariffs from these countries could escalate into a broader trade war, further disrupting global supply chains and raising prices for consumers worldwide. Emerging markets reliant on stable trade with these major economies may also suffer, as reduced global demand and higher costs ripple outward, potentially stifling growth and exacerbating inflationary pressures already evident in rising global commodity prices.  Click onto picture below to access video about how a cheese manufacturer benefits from tariffs. Click here for a comprehensive US tariffs imposed on other countries courtesy of ReedSmith. REF: WSJ, JPM, ReedSmith, KREM2

4C. An updated snapshot of the current global state of economy.

According to TradingEconomics as of 7/14/2025 (REF: TradingEconomics):

• China’s consumer prices rose by 0.1% yoy in June 2025, reversing a 0.1% drop in the previous three months and surpassing market forecasts of a flat reading. 
• India’s consumer price inflation eased for the eighth straight month, falling to 2.1% in June 2025, the lowest level since January 2019, down from 2.82% in May and below market expectations of 2.5%.
• The annual inflation rate in France rose to 1% in June 2025, revised up from an initial estimate of 0.9% and higher than May’s 0.7%.
• The unemployment rate in Canada eased to 6.9% in June of 2025 from the near-four-year high of 7% in the previous month, contrasting with expectations that it would increase to 7.1%.

5. Quant & Technical Corner – A selection of quantitative & technical data we monitor on a regular basis to help gauge the overall financial market conditions and the investment environment.

5A. Most recent read on the Fear & Greed Index with data as of 7/14/2025 – 7:59PM-ET is 76 (Extreme Greed).  Last week’s data was 74 (Extreme Greed) (1-100).  CNNMoney’s Fear & Greed index looks at 7 indicators (Stock Price Momentum, Stock Price Strength, Stock Price Breadth, Put and Call Options, Junk Bond Demand, Market Volatility, and Safe Haven Demand).  Keep in mind this is a contrarian indicator!  REF: Fear&Greed via CNNMoney

5B. St. Louis Fed Financial Stress Index’s (STLFSI4) most recent read is at –0.8790 as of July 10, 2025.  Previous week’s data was -0.7036.  A big spike up from previous readings reflecting the turmoil in the banking sector back in 2023.  This weekly index is not seasonally adjusted.  The STLFSI4 measures the degree of financial stress in the markets and is constructed from 18 weekly data series: seven interest rate series, six yield spreads and five other indicators. Each of these variables captures some aspect of financial stress. Accordingly, as the level of financial stress in the economy changes, the data series are likely to move together.  REF: St. Louis Fed

5C. University of Michigan, University of Michigan: Consumer Sentiment for February [UMCSENT] at 52.2, retrieved from FRED, Federal Reserve Bank of St. Louis, June 27, 2025.  Back in June 2022, Consumer Sentiment hit a low point going back to April 1980.  REF: UofM

5D. The Chicago Fed National Activity Index (CFNAI) increased to –0.28 in May from –0.36 in April. Two of the four broad categories of indicators used to construct the index increased from April, but three categories made negative contributions in May. The index’s three-month moving average, CFNAI-MA3, decreased to –0.16 in May from +0.06 in April. REF: ChicagoFed, May’s Report

5E. (6/20/2025) The Conference Board Leading Economic Index (LEI) for the US ticked down by 0.1% in May 2025 to 99.0 (2016=100), after declining by 1.4% in April (revised downward from –1.0% originally reported). The LEI has fallen by 2.7% in the six-month period ending May 2025, a much faster rate of decline than the 1.4% contraction over the previous six months. The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The indexes are constructed to summarize and reveal common turning points in the economy in a clearer and more convincing manner than any individual component. The CEI is highly correlated with real GDP. The LEI is a predictive variable that anticipates (or “leads”) turning points in the business cycle by around 7 months. Shaded areas denote recession periods or economic contractions. The dates above the shaded areas show the chronology of peaks and troughs in the business cycle. The ten components of The Conference Board Leading Economic Index® for the U.S. include: Average weekly hours in manufacturing; Average weekly initial claims for unemployment insurance; Manufacturers’ new orders for consumer goods and materials; ISM® Index of New Orders; Manufacturers’ new orders for nondefense capital goods excluding aircraft orders; Building permits for new private housing units; S&P 500® Index of Stock Prices; Leading Credit Index™; Interest rate spread (10-year Treasury bonds less federal funds rate); Average consumer expectations for business conditions.  REF: ConferenceBoard, LEI Report for May  (Released on 6/30/2025)

We have experienced a “rolling recession” since June 2022 and are only now emerging from it. However, authorities are not labeling it a recession due to high employment data.

5F. Probability of U.S. falling into Recession within 3 to 4 months is currently at 82.02% (with data as of 07/14/2025 – Next Report 07/28/2025) according to RecessionAlert Research.  Last release’s data was at 84.97%.  This report is updated every two weeks. REF: RecessionAlertResearch

5G. Yield Curve as of 7/14/2025 is showing Normal.  Spread on the 10-yr Treasury Yield (4.44%) minus yield on the 2-yr Treasury Yield (3.90%) is currently at 54bps.  REF: Stockcharts   The yield curve—specifically, the spread between the interest rates on the ten-year Treasury note and the three-month Treasury bill—is a valuable forecasting tool. It is simple to use and significantly outperforms other financial and macroeconomic indicators in predicting recessions two to six quarters ahead.  REF: NYFED

5H. Recent Yields in 10-Year Government Bonds.  REF: Source is from Bloomberg.com, dated 7/14/2025, rates shown below are as of 7/14/2025, subject to change.

The 10-Year US Treasury Yield… The 10-Year Yield is indirectly related to inflation. I expect the 10-Year Yield to drop further as dis-inflation kicks in.  REF: StockCharts1, StockCharts2

10-Year Real Interest Rate at 1.87166% as of 6/11/25.  Last month’s data was 1.66756%.  REF: REAINTRATREARAT10Y

ICE BofA US High Yield Index Option-Adjusted Spread (BAMLH0A0HYM2) currently at 2.97 as of July 14, 2025.  This is a key indicator of market sentiment, particularly regarding risk and economic health.  At its core, the spread reflects the extra return investors demand to hold riskier corporate debt over safer government securities. High-yield bonds are issued by companies with lower credit ratings (below investment grade, like BB or lower), meaning they carry a higher chance of default. The spread compensates for this risk. When the spread is narrow—say, around 2.5% to 3%, as seen recently—it suggests investors are confident, willing to accept less extra yield because they perceive lower default risk or a strong economy. Narrow spreads often align with bullish markets, where cash is flowing, growth is steady, and fear is low.   REF: FRED-BAMLH0A0HYM2

5I. (7/14/2025) Today’s National Average 30-Year Fixed Mortgage Rate is 6.83% (All Time High was 8.03% on 10/19/23).   Last week’s data was 6.79%.  This rate is the average 30-year fixed mortgage rates from several different surveys including Mortgage News Daily (daily index), Freddie Mac (weekly survey), Mortgage Bankers Association (weekly survey) and FHFA (monthly survey).  REF: MortgageNewsDaily, Today’s Average Rate

The recent spike in the 30-year fixed-rate jumbo mortgage to 6.83%, compared to Freddie Mac’s rate at 6.72% and the Mortgage Bankers Association (MBA) rate at 6.77%, highlights key differences in the mortgage market. Jumbo mortgages, which exceed the conforming loan limits set by government agencies like Freddie Mac, typically carry higher interest rates because they are riskier for lenders. These loans are not backed by government entities, which increases the risk for lenders and, consequently, leads to higher rates. In contrast, Freddie Mac and MBA provide averages for conforming loans, which meet federal guidelines and have lower risk due to government backing, keeping their rates lower.

Housing Affordability Index for May = 97.2 // Apr = 101.0 // Mar = 103.2 // Feb = 102.2 // Jan = 100.7 // Dec = 100.7 // Nov = 99 // Oct = 102.3. Data provided by Yardeni Research.  REF: Yardeni

5J. Velocity of M2 Money Stock (M2V) with current read at 1.386 as of (Q1-2025 updated 6/26/2025).   Previous quarter’s data was 1.383.  The velocity of money is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy.  Current Money Stock (M2) report can be viewed in the reference link.   REF: St.LouisFed-M2V

M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less IRA and Keogh balances at depository institutions; and (2) balances in retail MMFs less IRA and Keogh balances at MMFs. Seasonally adjusted M2 is constructed by summing savings deposits (before May 2020), small-denomination time deposits, and retail MMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1. Board of Governors of the Federal Reserve System (US), M2 [M2SL], retrieved from FRED, Federal Reserve Bank of St. Louis; Updated on June 24, 2025.  REF: St.LouisFed-M2

Money Supply M0 in the United States decreased to 5,648,600 USD Million in May from 5,732,900 USD Million in April of 2025. Money Supply M0 in the United States averaged 1,194,572.77 USD Million from 1959 until 2025, reaching an all time high of 6,413,100.00 USD Million in December of 2021 and a record low of 48,400.00 USD Million in February of 1961.   REF: TradingEconomics, M0

5K. In June, the Consumer Price Index for All Urban Consumers rose 0.3 percent, seasonally adjusted, and rose 2.7 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.2 percent in June (SA); up 2.9 percent over the year (NSA). July 2025 CPI data are scheduled to be released on August 12, 2025, at 8:30AM-ET.  REF: BLS, BLS.GOV

 5L. Technical Analysis of the S&P500 Index.  Click onto reference links below for images.

• Short-term Chart: Trend Bullish on 7/14/2025 – REF: Short-term S&P500 Chart by Marc Slavin (Click Here to Access Chart)

• Medium-term Chart: Trend Bearish to Bullish on 7/14/2025 – REF: Medium-term S&P500 Chart by Marc Slavin (Click Here to Access Chart)

• Market Timing Indicators – S&P500 Index as of 7/14/2025 – REF: S&P500 Charts (7 of them) by Joanne Klein’s Top 7 (Click Here to Access Updated Charts)

• The S&P500 is hitting all-time-high, rebounding from a V-shaped recovery.  REF: Stockcharts

• S&P500 and CBOE Volatility Index (VIX) as of 7/14/2025.  REF: FRED, Today’s Print

5M. Most recent read on the Crypto Fear & Greed Index with data as of 7/14/2025 is 50 (Neutral).  Last week’s data was 50 (Neutral) (1-100).  Fear & Greed Index – A Contrarian Data.  The crypto market behavior is very emotional. People tend to get greedy when the market is rising which results in FOMO (Fear of missing out). Also, people often sell their coins in irrational reaction of seeing red numbers. With the Crypto Fear and Greed Index, the data try to help save investors from their own emotional overreactions. There are two simple assumptions:

• Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.
• When Investors are getting too greedy, that means the market is due for a correction.

Therefore, the program for this index analyzes the current sentiment of the Bitcoin market and crunch the numbers into a simple meter from 0 to 100. Zero means “Extreme Fear”, while 100 means “Extreme Greed”.  REF: Coinmarketcap.com, Today’sReading

Bitcoin – 10-Year & 2-Year Charts. REF: Stockcharts10Y, Stockcharts2Y