Co-Mind Morning Pulse – July 4, 2025
Co-Mind Morning Pulse – July 4, 2025
1. Market Mood
The market is euphoric—but selectively so. Mega-cap tech and AI beneficiaries have dragged global indices to fresh highs, despite an increasingly fragile macro backdrop. A strong U.S. jobs report reinforced “soft landing” hopes, allowing risk assets to surge even as rate cut expectations are deferred. Underneath the surface: concentration risk is rising, trade war escalation looms next week, and the global investor base is quietly split between momentum-chasing and defensive repositioning. Volatility is low, but uncertainty is not.
2. Key Cross-Asset Moves (1-day % changes)
Equities
S&P 500: +0.83% – Fresh all-time high, led by mega-cap tech
Nasdaq 100: +1.02% – Nvidia briefly became world’s largest company
Euro Stoxx 50: +0.42% – Riding Wall Street coattails, cautious ahead of tariffs
Nikkei 225: -0.03% – Flat session, yen strength and BoJ chatter weighed
Fixed Income
U.S. 10Y Treasury yield: ~unchanged at 4.2% – Market digesting strong NFP vs delayed cuts
2Y yield: ~unchanged at 4.6% – Pricing out near-term Fed easing
Bunds/Gilts: Stable – ECB and BoE signals unchanged, quiet session
Commodities
WTI Crude: Up to $66.5 – Balanced between solid demand and trade risk
Gold: ~Unch. at $3,328 – Resilient despite Fed repricing
Currencies
DXY: +0.4% – Still firm post-NFP, driven by U.S. outperformance
USD/JPY: -0.2% to 144.70 – Yen bid after BoJ hawkish clarification
EUR/USD: +0.1% to 1.178 – Fed-ECB divergence narrowing
GBP/USD: +0.1% to 1.367 – Tracking euro, quiet session
Digital Assets
BTC: $109k – Flirting with ATH
3. The Real Driver
Strong but not-too-hot U.S. jobs data was the fulcrum of yesterday’s rally. June NFP came in at +147k vs ~110k expected, unemployment dipped to 4.1%, and jobless claims hit 6-week lows. The market interpreted this as "proof" of a soft landing, even though it further pushed out the Fed rate cut timeline. Bulls focused on resilience; bears see complacency in ignoring delayed easing and rising tariffs.
4. What We’ve Learned
Equity sentiment has flipped fully bullish – but the rally is concentrated. Mega-cap tech now dominates even more, masking weak breadth in some segments.
Rate cuts are fading into the distance – markets still price 2–3 cuts in 2025, but the first is now seen in September at the earliest.
Trump’s tax-and-spend bill cleared the House, adding fiscal fuel to growth... and long-term debt risks. It may juice earnings and GDP, but pressure Treasury markets and inflation later.
BoJ is not done hiking. Takata’s comments confirmed the pause was tactical, not terminal. USDJPY reacted accordingly.
Tariff escalation risk is real. The July 9 “Liberation Day” deadline could trigger sharp repricing if no deal is reached. Markets are underpricing this binary event.
Hedge funds are back in risk-on mode. Gross and net exposures are near 12-month highs, particularly in tech. The FOMO bid is firmly in control.
Silver remains the stealth breakout. Above key levels, benefiting from both soft-dollar and industrial demand themes.
Market is pricing in near-perfection. S&P 500 forward P/E >22. Any earnings disappointment or macro hiccup could unravel this fast.
5. Final Thought
We are in a late-cycle, sentiment-driven melt-up—but one that’s fundamentally unhedged against near-term shocks. With U.S. equities at record highs, policy rates still elevated, fiscal stimulus peaking, and geopolitical/trade landmines days away, the probability distribution is widening. The crowd is long risk, short volatility, and positioned as if the soft landing is guaranteed. But the setup smells like a calm before a binary storm. Keep dancing, but tighten your exits.