Daily Commentary: July 03, 2025

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The Bad News That Never Comes

Posted by Pete Stolcers on July 03
www.oneoption.com

Other data points suggested soft employment and they contradicted the BLS.

PRE-OPEN MARKET COMMENTS THURSDAY – Given the rise in initial jobless claims during the last month, the weak ADP report and the Challenger Gray & Christmas layoffs report analysts were expecting a decline in job growth. This morning the BLS reported that 147K jobs were created during the month of June. The previous two months were revised upward by 15K and hourly wages only increased .2%. Both of those data points are bullish.

After the open ISM Services will be reported and that is an important number since it represents 80% of US economic activity. It came in at 50.8 last month and it rebounded from contraction territory. Any improvement in this reading would be bullish.

Politicians are scrambling to pass the Big Beautiful Bill before July 4th and it will stimulate economic growth on a longer-term basis. The market is expecting this and to a large degree it could already be priced in.

No matter how dire the situation is in China, S Korea, Japan or Europe, the US is impervious. The job market remains stable and the market will continue higher. Even if the jobs report was weak, I doubt the market would have sold off. The Fed has room to ease and that is providing a safety net for at least a few weak months of data. We have yet to see the first month of weakness.

Yesterday a trade deal with Vietnam was announced. They will pay a 20% tariff (down from the initial 46%) and goods transported through Vietnam (China primarily) will face a 40% tariff. A trade deal with India is expected soon. In general, the market has shrugged off the tariffs and trade deals. This is largely because we have yet to see any inflationary impact.

The market is at an all-time high and the news today was bullish. The S&P 500 is up 17 points and I believe any bid check will be brief and shallow. This is a half day trading session. I would wait for ISM Services at 10 AM ET and have your longs ready. The upward market momentum has been strong. If you have day trades that are performing, consider holding them over the long weekend. There’s a chance that the Big Beautiful Bill will get passed and that would be an upside catalyst.

Support is at the close from yesterday and I don’t see any meaningful resistance until SPY $640 (H+ trendline from 2021).

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