Things you need to know.

• Stocks end the quarter at new all-time highs!
• We traded in 14 centuries over the past 6 months….
• Donny puts more pressure on JJ to do ‘something BIG.’
• European stocks had a great first half – beating the US.
• Try the Country Style French Chicken this weekend.

The quarter is OVER! Stocks closed at new all-time highs! – The chaos that was created on Liberation Day (April 3^rd) that caused some investors, most traders and all of the algo’s to panic and send stocks plunging was nothing but a whirlwind of chaos fueled by TDS and unfounded fear that new trade agreements would spiral out of control causing inflation to surge and the US to become the laughing stock of the world – BUT that didn’t happen – AT ALL…..

In fact, you could argue that the complete opposite happened…. Countries came to the table to renegotiate old trade agreements; inflation has fallen and is at the lowest point since the Biden highs and the US is in a stronger position today then we were then. The Israel/Iran problem is no longer the problem it was and nations around the world – and especially those in the middle east – are all breathing a bit easier and the US is once again a beacon of hope.

Since the low on April 8^th in the middle of the panic the Dow has regained 20.5%, the S&P gained 24.5%, the Nasdaq +38.5%, the Russell +26.3%, the Transports + 24.5%, the Equal Weighted S&P + 20.9% while the Mag 7 took back 42.9%! That all happened in less than 3 months….

Now, Yesterday was the end of the month and quarter – and stocks celebrated. The Dow gained 275 pts, the S&P up 31, the Nasdaq +96, the Russell up 2 pt, the Transports bucked the trend and lost 100 pts, the Equal Weight S&P up 34 pts while the Mag 7 gave back 68 pts.

Now ytd – here is how it stacks up – The Dow +3.6%, the S&P + 5.5%, the Nasdaq +5.5%, the Russel – 2.5%, the Transports -3.1%, the Equal Weight S&P +3.8% while the Mag 7 gained 1.6%.

The dollar ended the 1^st half of the year at 96.89 down 11.15%, Oil at $65.33 down 8.5%, Gold at $3,308 is up 24.5% the 10-yr bond is yielding 4.19% down 9.4%, the 30-yr bond is yielding 4.76% down 1.75%. 30 yr conventional mortgages are at 6.8% down from 7.05% in January.

Interest rates remain at 4.25%-4.5% and that is causing all kinds of chaos in the Oval Office and for home buyers and even for home sellers only because that rate keeps mortgages where they are and that is causing Donny and others to lose their sh*t! JJ seems unfazed by all of the rhetoric – but is that about to end this month at the FOMC meeting on July 29^th/30^th?

Now while JJ (FED Chair) remains cautious – we are starting to see the ‘team’ come apart at the seams….Members of the FOMC are now openly challenging JJ, (Waller & Bowman competing for JJ’s job Goolsbee who just wants to be Goolsbee along with others that are playing it safe for now – funny that we have NOT heard a peep from Neely Kashkari at all) never mind the pressure that Donny is putting on him are all making the conversation interesting. In fact – yesterday – Donny sent JJ a ‘note’ addressed to Mr. Too Late – calling him out for costing the US a ‘small fortune’ by keeping rates unreasonably high, demanding that he make a BIG cut! He is also teasing who the new FED chair will be (I say Bessent) only putting more pressure on JJ.

Now, the eco data that was supposed to collapse is NOT collapsing and that is causing JJ to dig his heels into the ground. But Donny and others will have none of it – even Lizzy Warren is siding with Trump and that is causing the earth to move…. but it will be what it will be. All we have to do is watch what Nicky T (WSJ fame) and Goldman Sachs have to say about this in the next couple of weeks because if JJ begins to soften – it will be those ‘deep throats’ that ‘suggest’ a possible move in July.

Now the Big Beautiful bill that we have been talking about for months now – is in the Senate and the Senators are beginning to ‘fight’ among themselves. The Dems are out – not supporting one ounce of it and the GOP’ers are beginning to claw at each other….The bill was supposed to be on Donny’s desk by Friday the 4^th – Yeah, that’s not happening….because after the Senate gets done with it – it goes back to the House for discussion….Oh boy….

And for now – in my opinion – it is the bill that will cause angst for investors and the markets. I discussed this yesterday with Liz Clamon on Fox Business – Click the link below.

https://video.foxbusiness.com/v/6375063858112

And this morning – Investors and even traders are taking a break…..Dow futures are down 55 pts, the S&P down 15, the Nasdaq -70 while the Russell is down 2 pts. It is a new month and a new quarter so NO ONE should be surprised at all…. It is also a holiday shortened week – so volumes are low and getting lower and that too will cause moves to be amplified and exaggerated. (I also discussed that in the video).

Eco data today includes S&P Manufacturing PMI – which is expected to remain in expansionary (bullish) territory and is just one of those hard data points that is causing JJ to do nothing. In addition we will get Prices Paid – expected to remain unchanged at 69.5, ISM Employment at 47.1 – which is up from last month, Construction Spending of -0.2% up from -0.4% and the important JOLTS report that identifies Job Openings and Labor Turnover and that is not expected to change very much.

European markets are also a bit lower in the new month…. Now YTD performance across the zone is impressive. Spain took the lead + 20.75%, Germany +20%, Italy +16.2%, Euro Stoxx +8.3%, the UK up 7.45% and France up 3.8%. And again, that speaks to having some international exposure in your portfolio – Capisce?

The S&P closed at 6204 – up 31 pts taking us into yet another NEW century! You do realize we have travelled in 14 centuries during the last 6 months…. from the low of 4,835 on April 8^th to yesterday’s new high at 6,204 making a new all-time high. Amazing! And look – if you stayed the course during all of it (and yes it was a bit antsy)– you are now in a much better place than you were on January 1^st.

Call me for a free (no obligation) portfolio analysis. 561-931-0190

Take good care,

kpolcari@slatestone.com

Sources:  Bloomberg, CNBC, Reuters, Wall Street Journal

Disclosure: The content provided in this material is designed for educational and informational purposes only, and it is important to note that it does not constitute personalized recommendations. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment.  The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of Kenny Polcari or SlateStone Wealth.

The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.

While considerable effort has been invested to ensure the accuracy and dependability of the information presented, we must clarify that we cannot guarantee the accuracy of third-party information. Our usual sources for third-party data include channels such as Bloomberg.

Country Style French Chicken.

For Chicken lovers – this is a simple and easy dish…. takes no time to prepare – yet gives you a hearty and wholesome meal.

Preheat your oven to 350 degrees.

For this you need: Chicken: 4 bone-in, skin-on chicken thighs (or a mix of thighs and drumsticks for a rustic feel), s&p, olive oil or butter (butter is very French!).

Sauce and Vegetables: 1 large onion, finely chopped, 2 garlic cloves, minced, cremini or button mushrooms, sliced, carrots, sliced, 1 cup dry white wine, 1 cup chicken broth, ½ cup heavy cream or crème fraiche (for that creamy French touch), 1 tbsp Dijon mustard, thyme, bay leaf, 1 tbsp flour (optional, for thickening), Fresh parsley, chopped, for garnish

Pat the chicken thighs dry with paper towels. Season generously with s&p.

In a large, oven-safe skillet or Dutch oven, heat olive oil or butter over medium-high heat. Add the chicken, skin-side down, and sear until golden brown, about 5 minutes per side. Remove chicken to a plate.

In the same skillet – add onion and carrots, cooking until softened, about 3-4 minutes. Add garlic and mushrooms, sautéing until mushrooms release their moisture and start to brown, about 5 minutes.

Sprinkle flour over the vegetables (if using) and stir for 1 minute.

Pour in the white wine scraping up any browned bits from the pan. Bring to a boil to allow the alcohol to burn off, Add chicken broth, thyme, bay leaf, and Dijon mustard. Stir to combine.

Return the chicken (skin-side up) nestling the chicken into the sauce.

Place in the oven to 350°F cover and bake for 30 minutes.

Uncover, stir in the heavy cream or crème fraiche, and simmer for an additional 5 minutes to thicken the sauce. If the sauce is to think – then thin with a bit more chicken broth.

Serve: remove the bay leaf and thyme sprigs (if using fresh). Taste and adjust seasoning with s&p. if needed.

Garnish with fresh parsley. Serve over mashed potatoes, rice, or with crusty bread to soak up the sauce. Pair with a green salad or roasted vegetables like asparagus or green beans for a complete meal.

Buon Appetito