Tech dips, transports soar: JOLTS surge and Senate's Big Beautiful Bill passes

So the first day of the new quarter and month – did not result in anything to be concerned about – OK – Nasdaq stocks sold off – just a bit, down 0.8% and the Mag 7 lost 408 pts or 1.5% which some tried to say was the beginning of the end, which makes me laugh, the beginning of the end???? Remember what I told you, it is a vacation week, volumes are low, and moves can be exaggerated and amplified in either direction.

Bespoke Investment Group (who I love) put out this message.

“If you’re long recent winners and are feeling the pain today, we would not be making any dramatic portfolio shifts just yet.”

Dramatic Shifts? Wait, did I miss something? Oh, right – TSLA lost $16 or 5.3% and NVDA lost $4.70 or 3%, META - $18 or 2.5%, oh and don’t forget MSFT – it lost $5 or 1.1%... ARE YOU KIDDING ME??? There are 495 other names in the S&P that did just fine…..and there are 30 names in the Dow that surged, and the Equal Weight S&P ended the day higher as well…so what are we talking about?

This is what caused some to say that the market is nervous. Here’s a thought, if this makes you nervous, you are in the wrong place! And if THIS got you nervous, what did April do to you?

Why is this a surprise? Look, The Mag 7 is up 108% from July 2024 – December 2024 and it gave back 29% thru April 2025 only to regain 36% thru June 30^th taking it once again to near all-time highs….….and the story line now is ‘WATCH OUT? Because they came under pressure yesterday? Tell me I misunderstood!

Look – it was just as we discussed – it is the start of the new quarter, traders and investors are getting ready to take advantage of what they think is next and yesterday’s story was really about how some money (not all of it), just some – got taken out of the Mag 7 (because some of those names I listed above are kissing new highs with the exception of TSLA) as investors took some of those recent profits and plowed it into where they think the next move will be – and where is that? Apparently it’s Transports and small and mid-caps!

The Transports gained 485 pts or 2.85% while the Russell gained 22 pts or 1.1%! (Money also moved into the other 493 S&P names as the Equal Weight S&P gained 1.1% as well).

And why? Well, because BOTH of those sectors (Russell and Transports) are the underperformers ytd….Coming into yesterday – the Transports were down 3% ytd while the Russell was down -2.5% ytd….ALL of the other indexes were up ytd coming into the new quarter and month….There is nothing more to say – it’s not rocket science….and btw – the move out of those high performing tech names was really done by traders and algo’s and some large asset managers that are trimming around the edges (as they manage risk)……I don’t really think any retail long term investor woke up yesterday and said – ‘Sell my tech names!’ I mean, none of my clients (who are retail) asked me to do that and I doubt many others did either.

In the end – the Dow gained 400 pts or 0.9%, the S&P lost 7 pts or 0.1%, the Nasdaq down 166 pts or 0.8%, the Russell up 22 pts or 1.1%, the Transports + 438 pts or 2.8%, the Equal Weight S&P up 82 pts or 1.1% while the Mag 7 lost 408 pts or 1.5%.

So a couple of other things happened yesterday (on the way to the Forum) – the Senate passed the big beautiful bill after much debate and overhaul and after Lisa Murkowski of Alaska who was a holdout – got some $30+ billion in relief….that included Medicaid and SNAP carve outs as well as money for rural health care considering the very rural nature of Alaska….so now it moves back to the House for reconsideration….the question everyone wants to know is – will it make it to the oval office by Friday? Donny says it will, while some members of the House are not so sure….and the clock ticks.

The other thing was the surge in the JOLTS report – jobs opening INCREASED more than the expectation and that suggests that JJ is right – there is no reason at the moment to cut rates – the labor market remains strong – the JOLTS report is now the highest it’s been since November – and that is sure to cause the conversation to get HOT….. especially after JJ told an economic forum in Portugal that he ‘probably would have cut rates absent Trump’s expanded use of tariffs’ (oh boy…. here we go….) Although – like I have been saying – the pressure IS on for a July cut and when asked – JJs said that he is NOT ruling out the possibility of a July cut…. See how this works – they weave it into the narrative slowly, watch what happens in the next few weeks because that will be the tell….We already have 3 FED heads that made it clear they are ready to cut….we only need a couple more….Remember – there are 12 out of 19 members that expect at least 1 cut with the majority favoring 2 cuts….there are 4 more meetings this year, so there is time, but the pressure is building for that July cut to ignite the markets for the second half of the year. Just fyi – the market is pricing in an 20% chance of a cut.

The JOLTS report did cause bonds to decline and yields to rise…. the 10-yr yield was all over the place – at 8 am it was yielding 4.18% by noon time it was yielding 4.28% and by 4 pm it was yielding 4.24%. This morning it is up 4 bps at 4.28%.

Oil did nothing and remains at $64.50/$66.70. This morning it went up 50 cts at $65.98.

All while Gold continues to hug the trendline at $3346 – currently trading up $1.3 at $3350.

US futures are up – Dow +72, the S&P’s up 8, the Nasdaq is taking back 22 pts, and the Russell is up 18 (again it appears that it will outperform).

This morning, we learn that Israel has agreed to a 60-day ceasefire in Gaza and we hope that this signals the end of that war.

The focus today and tomorrow will be all about the House and the passage or not of the BBB (Big Beautiful Bill). My gut says that it won’t make it, but the market is telling us that it will – Expect it to come down to the 11^th hour on Thursday evening….….So, let’s see what they give away to the ‘no votes’ to get the deal passed.

European markets are higher…. Nothing specific driving that move.

The S&P closed at 6198 – down 7 pts. Tomorrow is the last trading day of the week ahead of the long weekend. I’m on my way to Cape Cod – See you on Monday from the canal.

Tomato and watermelon salad

Enjoy the weekend with this refreshing and delicious Watermelon and Tomato Salad.....The colors, and freshness of this chilled salad will make any summer BBQ table a pleasure to look at and more so – a delight to eat. If you have never had this salad – you have to make it…and if you have had it then you can appreciate the simplicity of it.

For this – you need: Fresh Garden tomatoes, mint, watermelon, feta cheese, s&p, Olive oil, and balsamic vinegar…..

Cut the tomatoes in half and then slice the halves in slices (you understand what I mean – no?). Next slice the watermelon and cut away from the rind…. Cut into cubes and place in a large bowl. Now add the tomatoes, crumbled feta and chopped fresh mint… Drizzle with Olive oil and a splash of Balsamic – season lightly with s&p… (you can also hit it with a smidge of sugar) …. cover and place it in the fridge to keep chilled. Spectacular.