Exposing Cracks in the U.S.-EU Trade Deal and Tariff Mythology; U.S.-based Whirlpool Slumps 17% on EPS Miss, Dividend Cut

On Sunday - just in time to affect markets opening Monday - U.S. President Trump and European Commission President doofus Ursula von der Leyen proudly announced, according to Trump, “the greatest trade deal ever” between the U.S. and European Union. Markets reacted to the news with subdued enthusiasm.

There are some issues with this deal, as with a few of the other tariff negotiations over the past few months.

The framework agreement is still pending ratification by EU member states and the European Parliament, which could take months and may find opposition and debate. The deal imposes a 15% tariff on most EU exports to the United States, half the originally threatened 30%, but still well beyond historic norms.

In the framework of the deal, the EU commits to energy imports worth $750 billion over the next three years, which includes copious amounts of liquefied natural gas (LNG) and petroleum products. Trump's "America First" agenda apparently favors selling high-priced fuel to Europe rather than keeping costs down for U.S. consumers. Besides, there's nothing written in stone, nor are there penalties for deviating from the outline of the deal. The EU, being an amalgamation of independent countries, might find disagreement among its members, especially if cheaper fuel can be purchased elsewhere.

The MAGA component includes investment in the American heartland of $600 billion, to be mobilized from European industries and invested in the United States, with a focus on defense manufacturing. Trump supposes that Europe will continue fighting its proxy war in Ukraine and will be willing to pay for American weapons, over three years, which is quite a long time for events on the ground to change.

Thus, U.S. markets were not exactly enthralled over the prospects, bearing in mind that the U.S. and Europe have perfected the practice of breaking contracts at their leisure.

In a related development, American appliance manufacturer, Whirlpool (WHR), was trading down as much as 17% in the pre-market after missing EPS estimates badly when it announced second quarter results after the close Monday. Earnings per share for the second quarter came in at $1.34 vs. $1.74 consensus and $2.39 a year ago.

"As expected, the second quarter continued to be impacted by competitors stockpiling Asian imports into the U.S. Despite this, we are well positioned in North America with a robust pipeline of new products, the industry's leading U.S. manufacturing footprint, and favorable housing demand fundamentals,"

--Whirlpool CEO Marc Bitzer.

On the forward front, Whirlpool (WHR) expects full-year EPS of $6.00 to $8.00 (AKA $7.00) versus a consensus of $9.06. Whoops! The market surely didn't like that.

The company also made the stunning announcement of recommending a new quarterly dividend rate of $0.90 per share, basically cutting the current $1.75 per share payout rate in half. This is nothing short of complete capitulation from an American-based company. The problem, despite corporate protestation to the contrary, isn't other companies stocking up on foreign inventory, it's the beginning of blowback from tariff threats and imposition in foreign markets. Whirlpool's sales were down materially in Latin American and Asian markets. Potential customers in countries from Thailand to Peru, Chile and Brazil are balking at "buying American." This is a problem the promoters of Trump tariff policy have clearly not adequately anticipated.

Trump's plan to bring foreign manufacturing back to the United States may have a fatal flaw if consumers in markets around the world consider the U.S. to be bullying the rest of the world - taking their jobs, for instance, and making their home-grown products pricier in the U.S. - they're likely to opt for products produced in their own countries or more friendly, neighboring, non-tariffing countries. Beyond that, in the absence of tariffs on goods and services not affected by U.S. tariff policy - say between Vietnam and Australia, or Brazil and Mexico, or, any of hundreds of other combinations - competition will be fierce and buying U.S. products may be considered toxic, unpatriotic, and not in the host nation's best interests.

The U.S. does not have a monopoly on patriotism. Most people in the world support their own countries first. While the bumper-sticker slogan, "America First", may support a degree of patriotism in North America and consumers supporting U.S. businesses, it translates to "Europe First", "Japan First" or even "BRICS First" to the rest of the world.

There are a multitude of issues that could arise from Trump's tariff proposals and their implementation, some of which cannot fully be appreciated until data from a few quarters is evident. While the stock market remains largely gung-ho on future prospects - the Shiller PE hit 38.96 yesterday, the second-highest ever - stocks are getting to a point of ridiculousness in valuation terms. Any deviation from the agenda set by the White House and congress could lead to unexpected results, such as Whirlpool demonstrated as a potential canary in the tariff coal mine.

In the meantime, the S&P and NASDAQ look to continue their streak of all-time highs while the Dow Industrials and Dow Transports flounder around, just below record levels, an indication that America's industrial might may be less-than-almighty. Gold and silver are beginning to rebound after three days of relentless short-selling on the COMEX. They supply an existential backdrop to the world's debt-fueled euphoria, reminding the planet about what really constitutes money and wealth.

The FOMC begins a two-day meeting today which will culminate in a policy announcement at 2:00 pm ET Wednesday. Until then, trading is likely to be wait-and-see mode, with the Fed stuck at a fed funds target rate of 4.25-4.50%, and prospects for Trump getting his rate cut slim. US 2nd quarter GDP will be released prior to the policy statement, so that number will almost surely be in play.

Everything will be fine until it's not. So far, so good, but the future is largely unpredictable.

At the Close, Monday, July 28, 2025:
Dow: 44,837.56, -64.36 (-0.14%)
NASDAQ: 21,178.58, +70.27 (+0.33%)
S&P 500: 6,389.77, +1.13 (+0.02%)
NYSE Composite: 20,821.28, -129.17 (-0.62%)

WEEKEND WRAP: Loaded Earnings Calendar, Fed Meeting, July Jobs Report in the Coming Week Suggests Market Volatility

The Shiller PE finished the week at 38.97, clearly the second-highest ever, closing in on the October, 1999, all-time high of 43.21. Stocks are undeniably in super-bubble territory.

Another gauge of market value, the Buffett Indicator, used by legendary investor Warren Buffett to time market moves, measures the total price of listed stocks against current GDP. It is a valuation multiple used to assess how expensive or cheap the aggregate stock market is at a given point in time.

Total market cap for U.S. listed stocks is currently at $ 63,834.2 billion ($63.834 trillion) while GDP is running at an annual rate of $29,955 billion ($29.955 trillion), making the ratio 213.1%, an all-time high, according to the website, gurufocus.com, which also provides other measures of stock market valuation.

Fortune magazine has the ratio - using the Wilshire 5000 for stock valuation - at 212% of GDP.

It's worth bearing in mind that GDP, according to the government, is likely to be grossly inflated, meaning that these indicators are not just flashing red lights, they've got sirens blaring, and smoke billowing, like a four-alarm fire.

But, keep buying. Stocks, like real estate in the mid-2000s, always go up. Other factors to keep in mind are the deeply ingrained Plunge Protection Team (PPT), otherwise known as the President's Working Group on Financial Markets, which has routinely stepped in to keep stock prices from falling out of bed. They're usually resolute about their function and may be on top of markets constantly as the U.S. is challenged by BRICS, skeptics, current events and even itself to deliver a narrative of green lights and all's well. The New York Fed's trading desk and other market insiders like the Exchange Stabilization Fund are also probably hard at work keeping the plates spinning.

There's a certain kind of sadness to all of this, as the president, his administration, and Republicans in congress are loathe to show any kind of weakness, be it military, moral, or, in this case, financial. President Trump has once again chosen to use the stock market as a yardstick for American greatness, and, with all-time highs occurring regularly now, his use of the bully pulpit to further the "America First" and "Golden Age" narrative will be a major force in the constantly-evolving political/social media spin apparatus.

One more thing. This line from George Orwell's 1984 may be of some significance:

“The Party told you to reject the evidence of your eyes and ears. It was their final, most essential command.”

Stocks

Stocks made minor advances during the week, with the NASDAQ and S&P making new highs on a daily basis. The Dow continued to fall short of its own record and the transportation average, despite a solid advance, remains well below its records.

There are three big events this week which should impact markets. The FOMC meeting, Tuesday and Wednesday, July 29 and 30, will be closely watched. There is rampant speculation that the Fed will cut the federal funds target interest rate by either 25 or 50 basis points, though it's difficult to ascertain what would be the Fed's rationale, given the latest inflation readings were hardly dovish. Additionally, Trump's tariffs aren't supposed to take effect until August 1, so there's got to be some weight assigned to that.

The initial estimate of second quarter GDP will be announced prior to the Fed's policy statement on Wednesday. The GDP figures come out before the opening bell, at 8:30 am ET, and the Fed policy decision at 2:00 pm ET. Surely, the Fed will have advance knowledge of the GDP estimate, so whatever decision they make will be at least partially guided by that, so they can start off their statement with the usual garble, "Recent data showed the general economy grew at a blah, blah, blah..."

If GDP is anywhere above two percent, the Fed would be more inclined to keep rates steady at the current 4.25-4.50%. Should it come in at somewhere under one percent, that might supply cover for a rate cut. They're going to do whatever suits their best interests, and whether or not Chairman Powell is in a mood to appease the president by cutting will be present in the directive. Cutting interest rates when stocks are at all-rime highs and the money supply is increasing would be nothing short of throwing gasoline onto an already-raging fire, which is why the Fed shouldn't do it. As with everything and anything coming out of Washington, D.C. these days, making irrational or improper decisions (what used to be known as policy mistakes) cannot be ruled out.

On Friday, the Employment Situation (Non-farm Payrolls via the BLS) for July 2025 is scheduled to be released on August 1, 2025, at 8:30 am Eastern Time. That's the third leg of this week's economic data stool. Jobs haven't been cut to any degree, so a solid number is likely. With illegal immigrants either already deported, hiding from ICE, or self-deporting, there is an abundance of low-to-medium-skill jobs available across the country. It's difficult to imagine the unemployment rate going up under those conditions.

The most acceptable scenario would be GDP around 2.2%, no rate cut, and job gains of between 150,000 and 200,000. Americans and the rest of the world will find out what's up in broad terms this week.

Second quarter earnings calendar this week is absolutely jam-packed. Here's a sampling of some of the most important:

Monday (7/28): (before open) NewGold (NGD), Alliance Resource Partners (ARLP), Provident Bank (PROV); (after close) Waste Management (WM), Rambus (RMBS), Nucor (NUE), Whirlpool (WHR), Celestica (CLS)

Tuesday (7/29): (before open) Boeing (BA), SoFi (SOFI), Merck (MRK) Proctor & Gamble (PG), Spotify (SPOT), PayPal (PYPL), United Health Group (UNH), UPS (UPS) ; (after close) Stabucks (SBUX), Visa (V), Caesars Entertainment (CZR), Teradyne (TER), Cheesecake Factory (CAKE), Seagate (STX), Booking Holdings (BKNG)

Wednesday (7/30): (before open) Altria (MO), Teva Pharmaceuticals (TEVA), Harley Davidson (HOG), Etsy (ETSY) Generac (GNRC), Humana (HUM), KraftHeinz (KHC), Hershey (HSY); (after close) Robinhood (HOOD), Microsoft (MSFT), Meta Platforms (META), Carvana (CVNA), Ford (F), Kinross (KGC), Lam Research (LRCX), Qualcomm (QCOM)

Thursday (7/31): (before open) Mastercard (MA), Bristol Myers Squibb (BMY), Abbvie (ABBV), CVS Health (CVS), Cigna Financial (CI), Norwegian Cruise Lines (NCLS), Roblox (RBLX); (after close) Apple (AAPL), Amazon (AMZN), Coinbase (COIN), Roku (ROKU), Reddit (RDDT), Cloudfare (NET), MicroStrategy (MSTR), Enovix (ENVX)

Friday (8/1): (before open) Chevron (CVX), ExxonMobil (XOM), Dominion Energy (D), T. Rowe Price (TROW), Regeneron (REGN), Colgate-Palmolive (CL).

To say the least, this is going to be a busy week for anybody involved in policy or finance.

Treasury Yield Curve Rates

Date	1 Mo	1.5 mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
06/20/2025	4.20	4.38	4.55	4.39	4.40	4.29	4.07
06/27/2025	4.19	4.43	4.49	4.39	4.36	4.26	3.97
07/03/2025	4.35	4.43	4.50	4.42	4.41	4.34	4.07
07/11/2025	4.37	4.39	4.47	4.41	4.42	4.31	4.09
07/18/2025	4.35	4.39	4.46	4.40	4.42	4.30	4.08
07/25/2025	4.37	4.46	4.46	4.42	4.42	4.31	4.09

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
06/20/2025	3.90	3.86	3.96	4.16	4.38	4.90	4.89
06/27/2025	3.73	3.72	3.83	4.03	4.29	4.85	4.85
07/03/2025	3.88	3.84	3.94	4.12	4.35	4.87	4.86
07/11/2025	3.90	3.86	3.99	4.19	4.43	4.96	4.96
07/18/2025	3.88	3.84	3.96	4.18	4.44	4.99	5.00
07/25/2025	3.91	3.86	3.95	4.15	4.40	4.92	4.92

Yields on long term maturities got spanked down pretty well this week, suggesting that not everybody in investment-land was buying the stock market rally. Though the movement was not substantial week over week, the interim in 10-year notes and 30-year bonds was, shown rather clearly by the eight basis point drop on the 30 year, robust. Also, the "kink" of the 20-year bond being higher than the 30, has disappeared. They've been equal or even properly adjusted for a couple of weeks now.

Full spectrum spreads from 30 days out to 30 years were slashed from +65 down to +55. 2s-10s, last wek at the highest of Money Daily's records, +56, got squished back to +49. Order is being restored.

Some wild yield swings may occur around the FOMC meeting Tuesday and Wednesday, and again on Friday with the NFP report for July. Or not. It all depends on the data and what the Fed conjures up for it's policy decision and follow-up press conference.

Spreads:

2s-10s
9/15/2023: -69
9/22/2023: -66
9/29/2023: -44
10/06/2023: -30
10/13/2023: -41
10/20/2023: -14
10/27/2023: -15
11/03/2023: -26
11/10/2023: -43
11/17/2023: -44
11/24/2023: -45
12/01/2023: -34
12/08/2023: -48
12/15/2023: -53
12/22/2023: -41
12/29/2023: -35
1/5/2024: -35
1/12/2024: -18
1/19/2024: -24
1/26/2024: -19
2/2/2024: -33
2/9: -31
2/16: -34
2/23: -41
3/1: -35
3/8: -39
3/15: -41
3/22: -37
3/28: -39
4/5: -34
4/12: -38
4/19: -35
4/26: -29
5/3: -31
5/10: -37
5/17: -39
5/24: -47
5/31: -38
6/7: -44
6/14: -47
6/21: -45
6/28: -35
7/5: -32
7/12: -27
7/19: -24
7/26: -16
8/2: -08
8/9: -11
8/16: -17
8/23: -09
8/30: 00
9/6: +06
9/13: +09
9/20: +18
9/27: +20
10/4: +5
10/11: +13
10/18: +13
10/25: +14
11/1: +16
11/8: +5
11/15: +12
11/22: +4
11/29: +5
12/6: +5
12/13: +15
12/20: +22
12/27: +31
1/3: +32
1/10: +37
1/17: +34
1/24: +36
1/31: +36
2/7: +20
2/14: +21
2/21: +23
2/28: +25
3/7: +33
3/14: +29
3/21: +31
3/28: +38
4/4: +33
4/11: +52
4/17: +53
4/25: +55
5/2: +50
5/9: +49
5/16: +45
5/23: +51
5/30: +52
6/6: +48
6/13: +45
6/20: +48
6/27: +56
7/3: +47
7/11: +53
7/18: +56
7/25: +49

Full Spectrum (30-days - 30-years)
9/15/2023: -109
9/22/2023: -99
9/29/2023: -82
10/06/2023: -64
10/13/2023: -82
10/20/2023: -47
10/27/2023: -54
11/03/2023: -76
11/10/2023: -80
11/17/2023: -93
11/24/2023: -95
12/01/2023: -105
12/08/2023: -123
12/15/2023: -154
12/22/2023: -149
12/29/2023: -157
1/5/2024: -133
1/12/2024: -135
1/19/2024: -118
1/26/2024: -116
2/2/2024: -127
2/9: -117
2/16: -103
2/23: -112
3/1: -121
3/8: -125
3/15: -109
3/22: -112
3/28: -115
4/5: -93
4/12: -87
4/19: -77
4/26: -70
5/3: -85
5/10: -87
5/17: -94
5/24: -99
5/31: -83
6/7: -92
6/14: -113
6/21: -103
6/28: -96
7/5: -101
7/12: -108
7/19: -103
7/26: -104
8/2: -143
8/9: -131
8/16: -138
8/23: -141
8/30: -121
9/6: -125
9/13: -117
9/20: -80
9/27: -80
10/4: -75
10/11: -58
10/18: -54
10/25: -38
11/1: -18
11/8: -23
11/15: -10
11/22: -12
11/29: -40
12/6: -23
12/13: +18
12/20: +29
12/27: +38
1/3: +38
1/10: +54
1/17: +41
1/24: +40
1/31: +36
2/7: +32
2/14: +32
2/21: +31
2/28: +13
3/7: +24
3/14: +25
3/21: +23
3/28: +26
4/4: +5
4/11: +38
4/17: +44
4/25: +40
5/2: +41
5/9: +46
5/16: +52
5/23: +68
5/30: +59
6/6: +69
6/13: +67
6/20: +69
6/27: +66
7/3: +51
7/11: +59
7/18: +65
7/25: +55

Oil/Gas

WTI crude oil closed out the week at $65.07, a drop of nearly a dollar from last Friday's closeout at $66.03. WTI crude has been stuck in a range between $65 and $67 since the ed of June, with no real direction being suggested by charts or geo-politics. Like everything other than stocks, the summer doldrums have serious interests sidelined, with prices fairly stable, awaiting the next round of tariff trauma, resolution to conflicts in Ukraine and the Middle East, the upcoming FOMC meeting or some exogenous "black swan" event, which by definition, cannot be predicted with any degree of accuracy.

With economies worldwide subdued by slack demand and stagnation, the next move in oil is more likely to be lower rather than to a higher level. There's simply no impetus for a move to higher ground. That assumes none of the major players goes "off the farm", which is always possible.

Like oil, gas prices have simply leveled off over the past month. This week, Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump at $3.13, one penny higher than last week.

As usual, California has the highest prices in the country, $4.45, down three cents on the week.

Prices at the low end are led by Mississippi and Oklahoma (both $2.69). Louisiana ($2.73) and Texas ($2.75) are next, followed by Alabama ($2.77), Tennessee and South Carolina ($2.78) and Arkansas ($2.79). North Carolina ($2.86) and Georgia ($2.89) round out he sub-$3 southeast, with Florida ($3.09) bucking the trend.

Pennsylvania ($3.18) sits atop the Northeast states, down three cents on the week. Other than New Hampshire, all other New England and East coast states remained at or above $3.00, ranging from New York at $3.13 to New Jersey and Virginia right at an even $3.00.

Midwest states were led by Illinois ($3.37), the price down another five cents on the week. Kansas ($2.84) is the lowest in the region, followed by North Dakota ($2.87), Missouri ($2.88), and Wisconsin ($2.89). Along with Illinois, only Michigan ($3.23), Ohio ($3.09), and Indiana (3.06) are over $3.00. Colorado remained below $3 for a second straight week ($2.98).

Along with California, Washington ($4.35) is the only other one above $4, as Oregon remained down a few cents below, at $3.94. Nevada ($3.66) dropped two cents. Arizona ($3.15) continues to come down, but is still priced at a premium to neighboring New Mexico, a comparative bargain, at $2.91, though that is up 16 cents from last week. Idaho ($3.46) and Utah ($3.32) were unchanged.

Sub-$3.00 gas can be found in 22 states, the same number as last week.

Bitcoin

This week: $118,275.80
Last week: $117,859.20
2 weeks ago: $119,022.00
6 months ago: $102,938.00
One year ago: $68,017.18
Five years ago: $11,811.00

Bitcoin was flat and has been since making new highs about two weeks ago (July 14). A day will come when all the Wall Street types that have been pushing the crypto myth - Goldman Sachs, BlackRock, even grifters like Anthony Scaramuchi (the Mooch) - will liquidate their holdings, sell down their ETFs and leave the remains to bag-holders.

Crypto is a massive scam. There's just no other way to put it. It was created to condition the human mind to digital currencies, in advance of government/central bank-controlled CBDCs, and it's working. There are millions of rubes captivated by the allure of money which has no intrinsic value, no basis, that cannot be seen or touched, which is as the banking cartel would have it.

As it is, the global reserve currency, the mighty U.S. dollar ($US), is backed by "the full faith and credit" of the United States government, over which people have lost faith because the government is comprised of spendthrifts who shouldn't be allowed credit. The proof is in the $37 trillion pile of debt that continues to grow.

It's sad to think that people are led to believe that moving their money out of one fiat currency - the dollar, or euros or yen or what have you - to another entity that is completely unbacked is some form of financial genius and eventual economic salvation. Bitcoin, memecoins, altcoins, stablecoins and all of the shitcan derivatives are pure nonsense, which, in today's environment, is acceptable.

Good luck, all you "coiners" and "hodlers."

Precious Metals

Gold:Silver Ratio: 87.10; last week: 87.34

Per COMEX continuous contracts:

Gold price 6/27: $3,286.10
Gold price 7/3: $3,346.50
Gold price 7/11: $3,370.30
Gold price 7/18: $3,355.50
Gold price 7/25: $3,338.50

Silver price 6/27: $36.17
Silver price 7/3: $37.13
Silver price 7/11: $39.08
Silver price 7/18: $38.42
Silver price 7/25: $38.33

Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping):

Item/Price	Low	High	Average	Median
1 oz silver coin:	42.00	51.45	44.65	43.51
1 oz silver bar:	34.00	50.70	44.98	46.21
1 oz gold coin:	3,453.30	3,597.70	3,517.86	3,502.60
1 oz gold bar:	3,464.69	3,581.69	3,511.39	3,509.53

Gold and silver prices were much higher early in the week than the closing price on Friday afternoon in New York, at least that's what the usual suspects at the CME and COMEX would have one believe. Gold was as high as $3445.70, a five week high, and silver hit a 14-year high at $39.90 early Wednesday morning.

What occurred from that point forward was nothing short of desperation on the part of the Western economies' suppression teams. The net result was smack in the paper markets with physical moving further away from the obviously-rigged derivative market.

One can call it premia, premiums or simply retail markup, but the trend is clearly away from COMEX and LBMA price fixes toward a more level-headed environment based, not on pretentious paper pushing, but on real world experience. If miners are willing to continue to accept the global monetary cartel's insistence on keeping the prices of 1000-ounce silver bars, 100 troy ounce gold futures contracts (CME) and 400-troy-ounce (438.9-ounce; 27.4-pound; 12.4-kilogram) Good Delivery gold bars at prices below what the physical market demands, then the shame is on them for being so controlled by financiers rather than pursuing sound business practices.

Having paper derivatives set the price is pure folly, "putting the wagon before the horses," so to speak. It's only by ceding control of all monetary aspects of life to bankers' rules and fiat controls that the price of real money is "what we say it is," and nobody can say otherwise. Those days - of dollar dominance, money conjured out of thin air - are coming to a rapid end. Refusal in physical markets to adhere to the regimen devised some 50-odd years ago is becoming more and more evident with every paper smackdown, this latest one so grossly obvious as to make it laughable.

Clearly, judging by what is being offered and sold on eBay and at online retail merchants is not fully accepting the COMEX price. Even 10 ounce gold bars are priced well above $3,400 at retail. On eBay, even higher. One ounce gold coins and bars maintained their pricing power through the week. Silver is another case altogether. Being a much smaller market than gold, it is much easier to manipulate, as evidenced by the drop from $39.90 to $38.33 on the COMEX this week (Wednesday through Friday) and the lack of effect on physical bullion on eBay, a real market with competitive prices and robust demand, which was off merely by pennies from the prior week, not the $1.57 the COMEX would prefer.

There are those in this world who will not part with their gold or silver at these prices. As Western economies implode there will be more of them until the numbers reach what some people call "critical mass", a point at which gold and silver will be seen as what they really are, money, and paper as merely credit. There was a time, when governments were honest, that one could redeem paper credits for gold and/or silver. Those days were not that long ago in historical terms, a century or so removed. What is happening behind the scenes, in BRICS countries and those associated with them, is a movement towards honest money and an end to the tyrannical rule of central banks.

While it may seem like an eternity to wait out the purveyors of credit as substitutes for real money, the time is well spent stacking up one's future fortune.

The Single Ounce Silver Market Price Benchmark (SOSMPB) fell marginally this week, to $44.84, a drop of 20 cents from the July 20 price of $45.04 per troy ounce.

WEEKEND WRAP

Last week’s WEEKEND WRAP closed with this comment:

The recent flak over the "Epstein Files" gives support to the theory that leaders of most Western nations - possibly excluding Japan - are fully compromised and wholly incompetent. With such a backdrop, free (for now) citizens should treat their governments with all the disrespect they so richly deserve, disregarding any ill consequences while working towards a future devoid of sick, twisted sociopaths in powerful positions.

We’ll stick with that and add that the sheer volume and importance of data and earnings announcements this week is sure to be overwhelming for some people. It might make the most sense to just stand back and watch, awestruck, as the wheels of economic turn at a quickened pace. For a mid-summer week, this one promises to be jumpy and bumpy.

At the Close, Friday, July 25, 2025:
Dow: 44,901.92, +208.01 (+0.47%)
NASDAQ: 21,108.32, +50.36 (+0.24%)
S&P 500: 6,388.64, +25.29 (+0.40%)
NYSE Composite: 20,950.45, +97.03 (+0.47%)

For the Week:
Dow: +559.73 (+1.26%)
NASDAQ: +212.66 (+1.02%)
S&P 500: +91.85 (+1.46%)
NYSE Composite: +408.89 (+1.99%)
Dow Transports: +502.73 (+3.17%)

The Market May Not Be Irrational After All, and Inflation Is Going to Persist As Money Supply Increases Along with Tariffs

Heading into the final trading session of the week, the major indices look to be on track for another strong performance. Through Thursday's close, and, despite being sent lower on the day, the Dow is up 351 points. The NASDAQ is ahead 162 points, and the S&P has added 67 points.

Needless to say, even though the NASDAQ and S&P have been setting new record highs day after day, advances have been less-than-impressive. The S&P has finished green every day this week, but on three of those four days, the advances have been less than 10 points.

There is a chance that the constant pumping by rabid stock pushers may be running out of steam. Just maybe, though as John Maynard Keynes once quipped, "Markets can remain irrational longer than you can remain solvent." But, what if the market isn't irrational, isn't overpriced, even though many gauges confirm that there's a degree of bubble behavior being transmitted through the algorithms down to the floor traders.

Could it be that between the advances in AI, the turmoil in Trump's tariff negotiations, and the Fed keeping interest rates on hold, that stocks are actually well-priced and there's more room to run?

That's getting to be a tougher and tougher argument to make with each passing day. The cause for stocks' general advance is likely tied more to the Fed's liquidity spigot than anything else.

As the chart below shows rather clearly, the Fed's brief affair with QT (Quantitative Tightening) began in April 2022 and ended in October 2023, which, not by coincidence is exactly when the last bottom occurred in stock markets. From November 2023 to the present day, the Fed has been pumping liquidity into the market, and the primary recipients of that fresh loot are your friendly neighborhood robber barons Wall Street bankers, who buy, among other things, treasury issuance and, you guessed it, stocks.

The U.S. money supply is above $22 trillion, an all-time high, just like stocks, and, while correlation does not always necessarily imply causation, it wouldn't take a leap of faith to imply that the Fed has been responsible for the current rally and the recent returning spate of inflation. The Federal Reserve, being at all times less-than-forthright about its intentions, doesn't have to lower interest rates to fuel inflation, they can do it simply by increasing the money supply.

While we're quoting famous economists, recall Milton Friedman's view: "Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output."

Friedman certainly had a way with words. Among some of his more pithy comments, he said,

Central bankers always try to avoid their last big mistake. So every time there's the threat of a contraction in the economy, they'll over stimulate the economy, by printing too much money. The result will be a rising roller coaster of inflation, with each high and low being higher than the preceding one.

and...

If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand.

Funny guy, but, accurate. There's a whole volume of his quotes here.

So, it should be fairly clear that the markets are not irrational, but merely, for lack of a better term, following the money.

Whenever President Trump chides Jerome Powell for not lowering interest rates, it elicits no response from the Chairman, for a couple of good reasons. He's well aware that lowering interest rates could spark another round of higher inflation, and, he also knows that he's already kicking inflation higher by adding to the money supply. It appears, that the Trump-Powell feud, like so much else that goes about in Washington, D.C., is all for show.

These guys aren't stupid. Even Trump has to know that lowering interest rates with stocks and the money supply already at record levels would lead to a massive inflationary blow-off. It boggles the mind as to why he keeps insisting on it.

Meanwhile, as the money printer hums along, going brrrr... and the dollar continues to be debased, the riggers at the COMEX can't keep their greedy little fingers off precious metals. After gold hit a five-week high at $3445.70, and silver a 14-year high at $39.90 Tuesday night, it's been straight downhill for shiny rocks. Just before 9:00 am ET on Friday, gold was at $3340.80 and silver at $39.03. That's $100 off the gold and a buck lower on silver.

Though the takedown of precious is obvious and ongoing, this most recent attempt to squash real money looks like amateur hour. A $100 decline in gold isn't even three percent and knocking a buck off silver - which, BTW is among the best performing assets of 2025 - is only 2.5%, so not so scary.

Just to make one last shot at calling the stock market irrational, what is another leading asset for 2025, rivaling silver? It's not Amazon or Meta or even Nvidia. It's eBay. Yeah, eBay. It's gone from the low 60s to yesterday's close of 82.45 this year, a 33% gain.

Go figure.

At the Close, Thursday, July 24, 2025:
Dow: 44,693.91, -316.38 (-0.70%)
NASDAQ: 21,057.96, +37.94 (+0.18%)
S&P 500: 6,363.35, +4.44 (+0.07%)
NYSE Composite: 20,853.42, -68.42 (-0.33%)

Dow Just Short of All-Time High; Alphabet (GOOG) Reports Strong 2Q; Tesla Falls; Shiller PE at 2nd-Highest in History; Silver Approaching $40

While the S&P and NASDAQ both finished at record closes, the Dow Jones Industrial Average finished Wednesday just four points shy of its all-time closing high (45,014.04, Dec. 4, 2024).

It would appear that the Dow is headed to a new record, though that may not happen today, as Dow futures at 8:00 am ET are 164 points in the red, mostly due to Dow component IBM sliding in pre-market trading.

International Business Machines (IBM) delivered stronger results than expected and raised its forecast for full-year free cash flow, but revenue and gross margin in the software business were below consensus. IBM shares have outperformed the S&P 500 this year, but the stock is down six percent prior to the opening bell.

After the close Wednesday, Alphabet (GOOG) and Tesla (TLSA) reported second quarter results, with Alphabet putting up strong numbers across all of their business segments. The stock is higher by nearly four percent in the pre-market.

Elon Musk's Tesla did not fare as well, the stock down more than six percent prior to the open. The company reported a 16% decline in auto revenue as sales fell for a second straight quarter and again fell short of analysts’ estimates. Earnings per share came in at 40 cents adjusted vs. 43 cents expected on revenue of $22.50 billion vs. $22.74 billion estimates.

Other companies reporting Thursday morning include Honeywell (HON) Union Pacific (UNP), and Blackstone (BX).

Honeywell fell about three percent pre-market as the company experienced margin compression during the quarter.

Blackstone beat estimates on earnings per share of 98 cents, versus 58 cents a year ago. GAAP Net Income was $1.6 billion for the quarter on revenue of $2.035 billion. Shares are three percent higher pre-market.

Union Pacific's (UNP) earnings rose rose to $3.03, topping Wall Street expectations of $2.91. The company reported EPS of $2.71 per share in the same period last year. The company is apparently in merger talks with Norfolk Southern, a move that would combine the largest railroad operators from the east and west. Shares are flat heading into the open.

Intel reports after Thursday's close and is expected to report a decline of 50% in EPS to $0.01 on a more than 7% drop in sales to $11.88B. shares of Intel ar up 17% year-to-date, but the stock price has been cut by more than half over the past 18 months.

Overnight, Japan's NIKKEI gained more than 1.5%. Hong Kong's Hang Seng was up 0.5%. European markets are all up as the day progresses.

Gold and silver are being hammered on the COMEX, a day after gold hit a five-week high at $3,446.20 and silver made a 14-year high at $39.90 per ounce. An hour prior to stocks opening, gold is at $3,665 and silver holding up better, at $39.35.

The Dow Industrials and the Dow Transportation Average are two indices that have not yet reached previous highs, which, if one adheres to Dow Theory is a troubling sign for the ongoing rallies on the S&P and NASDAQ. If the Industrials do somehow manage to make new highs, the trend can only be confirmed by the Transports doing the same, though that index is still 1,500 points below highs set in late November of last year.

Finally, in case there are still doubts that the market is overheating, the Shiller PE is sitting at the second-highest ever after closing yesterday at 38.79. The all-time high for the Shilller PE - which accounts for earnings over a 10-year period - was in December 1999, at the height of the dotcom boom. That high water mark was 44.19.

With no restraints on FOMO or dip-buying by institutions and retail alike, there's a good chance that the current super-bubble will exceed all expectations. Such a development would clearly please President Trump, who could complain again that people stop looking into the "old news" Epstein files and focus on the marvelously-inflated stock market.

Woopie!

At the Close, Wednesday, July 23, 2025:
Dow: 45,010.29, +507.85 (+1.14%)
NASDAQ: 21,020.02, +127.33 (+0.61%)
S&P 500: 6,358.91, +49.29 (+0.78%)
NYSE Composite: 20,921.84, +263.05 (+1.27%)

S&P, Dow Set to Surge as Trump Announces Tariff Deal with Japan; Capital One, Northrop-Grumman Shares Higher; Alphabet, Tesla to Report After the Close

Earnings season is in full swing, with many of the most-recognizable and widely-held companies reporting second quarter results this week.

Among the big movers Wednesday morning is Capital One Financial (COF), its latest filing - after the close Tuesday - reflecting the company's merger with Discover. Accounting for the one-time losses stemming from the acquisition, Capital One reported a net loss of $4.3 billion for the second quarter of 2025, or $8.58 per share.

Investors are looking past those expenses, focusing on stripping out the merger charge, making the adjusted earnings per share $5.48, which handily beat analysts' estimate of $4.04 per share.

The combined company is now a behemoth in the credit industry, with card loans of $269.7 billion, and total loans held for investment rose of $439.3 billion, sending shares in the pre-market ripping higher by more than two percent.

Northrop Grumman (NOC) shares are higher as the company boosted its outlook as the protracted Russia-Ukraine war and conflict in the Middle East have boosted demand for weapons.

Those two reports speak volumes about current conditions. Wall Street is giddy over people being in debt up to their eyeballs and foreigners dying in wars waged with American-made weapons. Money talks and Wall Street and Washington D.C. are loaded to the gills with it.

The reaction to results from AT&T (T) wasn't quite as rosy. Despite a solid quarter that including gains to its subscription base, shares are down more than three percent.

Wednesday's trading is likely to revolve around two of the Magnificent 7 stocks, Alphabet (GOOG) and Tesla (TLSA), both reporting after the close. International Business Machines (IBM) and T-Mobile US (TMUS) will also be releasing second quarter results after the close of trading. Chipotle Mexican Grill (CMG) and Mattel (MAT) also report after the market closes.

Meanwhile, President Trump moved markets again Wednesday morning, announcing a trade deal with Japan that reduced tariffs due to begin being imposed on August 1 to 15%. His blatant market manipulation is disturbing. He and others in his administration, such as Commerce Secretary Howard Lutnick, are making bank on stock trades timed against these well-planned raises and walk-backs on tariffs, just as most members of congress do. It's becoming fairly obvious that the rich are enriching themselves with reckless abandon.

Elsewhere, gold and silver continue to march higher, with gold nearing a record high, at $3,437.90, and silver up to $39.80 per ounce on the COMEX an hour before the opening bell.

WTI crude oil continues to slide in the opposite direction, quoted right around $65/barrel Wednesday morning.

Futures are pointing to a strong open, with Dow futures up 223 points, NASDAQ futures lagging, up just 12 points, while S&P futures are higher by 21.

The Shiller PE gained on Tuesday and stands at 38.45, still just shy of the second-highest ever, 38.58, made in October, 2021. Positive news from some of the tech biggies reporting this week, given the lowered bars analysts have set as targets, should push the 500 to more record highs.

At the Close, Tuesday, July 22, 2025:
Dow: 44,502.44, +179.37 (+0.40%)
NASDAQ: 20,892.69, -81.49 (-0.39%)
S&P 500: 6,309.62, +4.02 (+0.06%)
NYSE Composite: 20,658.79, +144.32 (+0.70%)