MarketSurge powers the charts in this video.
Bull markets correct through sector rotations. We saw it last week. On July 1st, most momentum leaders sold off. The capital didn’t leave the stock market. It just rotated into other groups that have been lagging year-to-date – small caps, biotech, homebuilders, retailers, finance, etc. Such rotations are a normal part of the cycle. They are a sign that the bull market is expanding and encompassing more names. The wave is starting to lift more boats. There is more to choose from.
The next earnings season is a few weeks away, so the market is currently focused on the impact of the One Beautiful Bill and the trade deals with countries around the world. Vietnam agreed to pay 20% tariffs and 40% on transatlantic shipping. We are not going to discuss the longer-term consequences for the US consumer and companies, but focus on the immediate market reaction for now. The stocks of the companies that manufacture in Vietnam went higher – NKE, LULU, FSLR, BA, AAPL, etc. The Vietnam stock market made new 52-week highs. I suspect we will see a similar reaction to other deals – China, the EU, India, Latin America, Japan, etc.
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