💰 5 Fact Friday: Markets Boom, Tariffs Loom

MARKETS
1. All-Time Highs Are NOT A Red Light 🚀

We’re officially back in uncharted territory.

Yesterday, the S&P 500 and Nasdaq both closed at all-time highs. B*tcoin soared past $116,000. And Nvidia became the first public company ever to top a $4 trillion valuation, just two years after crossing the $1 trillion mark.

It’s a market trifecta made even more surreal by the fact that it’s happening as fresh tariffs loom and Q2 earnings season kicks off.

But here’s the twist: history and expectations suggest this rally could keep going. Let’s break down why.

🏃 A Low Bar to Clear

Analysts are bracing for just a 5% year-over-year increase in Q2 earnings across the S&P 500, down from 13% in Q1. Revenue growth is expected to slow too, and profit margins are forecast to dip slightly.

But that’s not necessarily bad news. It just means the bar is low, and low bars are easier to clear. We’ve seen this movie before: modest expectations lead to widespread earnings beats, and markets reward the surprise.

If results come in even a little better than feared, it could be just the spark needed to extend this rally.

Case in point: earnings season kicked off yesterday with Delta. The airline’s stock soared 12% after management cited “greater clarity” in its outlook. If others follow suit, early signs point to more upside potential ahead.

📊 Buying at Highs? Surprisingly Smart

It sounds counterintuitive, but buying when the market is at an all-time high has historically been a solid strategy.

Research from Peter Mallouk at Creative Planning shows that returns 1, 3, and 5 years after record highs actually exceed returns on other days.

Why? Because strength tends to follow strength.

Bull markets often rise for months, or even years, after setting new records. Trying to time the bottom usually leaves investors stuck on the sidelines, waiting for the “perfect” dip that never comes.

In short, the market may be expensive—but that doesn’t mean it’s peaked.

MARKETS
2. Tariffs Rising, Eyebrows Not So Much 📦

The rally might have legs, but it’s not without risk.

While bulls see low earnings expectations and historical strength at all-time highs as green lights, the market’s current mood is starting to look... overconfident.

Two flashing warning signs stand out: tariff escalation and extreme investor sentiment.

📦 Tariffs Are Piling Up, and Fast

The original July 9 tariff deadline came and went. Trump extended negotiations to August 1, but not without turning up the pressure.

Over the past week, the administration has proposed sweeping new tariffs on more than 20 countries. Recent moves include:

• 50% on copper imports, which sent prices up 13% in a single day—the biggest spike since records began in 1968.

• 50% on Brazilian goods, escalating tensions with one of the U.S.’s top trade partners in South America.

• 25-36% tariffs on key trading partners including Japan, South Korea, Iraq, and Malaysia.

• 20% on all goods from the Philippines, which exports over $14 billion in goods annually to the U.S.

Despite all of this, markets have barely flinched.

As HSBC’s Frederic Neumann put it, “Markets have broadly shrugged off the tariff news overnight.” Investors now have “calluses,” according to Joe Mazzola, Charles Schwab’s head of trading & derivatives.

It seems many are assuming these moves are more bark than bite. But if they’re wrong—and the tariffs are enforced—the ripple effects could be significant: higher input costs, tighter margins, slower growth.

For a market pricing in perfection, that’s a recipe for disappointment.

📉 Greed Is the Mood

Meanwhile, CNN’s Fear & Greed Index is flashing “Extreme Greed” across nearly every category. It’s the kind of sentiment that tends to show up near tops, not bottoms.

Investors are betting on a “Goldilocks” outcome: soft landing, strong earnings, no real trade war, and unlimited AI upside.

The U.S. has managed to thread the needle so far, but can it continue?

TECH
3. YouTube’s Newest Stars Aren’t Human 🤖

AI channels aren’t just popping up on YouTube—they’re dominating.

In May, four of the ten most-subscribed YouTube channels featured fully AI-generated content. These accounts upload nonstop, never sleep, and cost pennies to run.

Together, they pulled in more than 800 million views in a single month, according to Sherwood News.

The most jaw-dropping example?

Masters of Prophecy, an AI-generated music video channel, exploded from just a few hundred subscribers in February to over 31 million today.

And it’s not alone. Other breakout hits include:

• Talking Baby Podcast, a viral series by comedian Jon Lajoie starring a hyper-realistic animated baby.

• VTubers (virtual YouTubers) like Bloo, who streams AI-powered gaming and reaction content, and Milla Sofia, a digital pop star with consistently viral music videos.

• Chick of Honor, a channel built around emotionally charged clips of cute animals in dramatic, high-stakes scenarios.

For creators, the appeal is simple: AI videos are fast, cheap, and tailored to the algorithm. They also offer a faceless path to internet fame—ideal for anyone who doesn’t want to be in front of the camera.

Tools like Suno, ElevenLabs, and Google’s Veo now generate everything from dialogue to soundtracks. The result? Polished content that performs well across devices, from binge-worthy TV playlists to loopable YouTube Shorts.

Even YouTube seems to be leaning in. As of March, Shorts count as “viewed” the moment they start playing, rewarding autoplay-friendly, low-effort videos.

But not everyone’s thrilled. Critics say the rise of “AI slop” is making it harder to find original, human-made content.

Still, as long as the clicks keep coming, the bots will keep producing.

GOVERNMENT
4. What The OBBBA Means For Your Portfolio 💼

On July 4, Trump signed the One Big Beautiful Bill Act (OBBBA) into law. Last week, we covered what it means for taxpayers. This week, let’s look at how the bill is already shifting markets—and where investors might want to look next.

🚗 Auto Industry: New Deductions Drive U.S. Demand

Buyers of U.S.-assembled cars can now deduct up to $10,000 a year in loan interest from 2025 to 2028.

This benefits domestic automakers like Ford and GM, especially for high-ticket models. Demand for imported or electric vehicles may weaken in comparison, especially as EV tax credits expire.

🌱 Clean Energy: Tax Credit Cuts Rattle Renewables

Wind, solar, EV, and charging station credits are all being phased out over the next 12 months. This is a major blow to clean energy firms like Tesla, Enphase, First Solar, and ChargePoint.

Meanwhile, traditional oil and gas companies like ExxonMobil and Halliburton are gaining new subsidies, potentially fueling a sector rotation back to fossil fuels.

One exception? Biofuels. Their tax credits are being extended through 2031.

💊 Healthcare: Cuts Threaten Medicaid-Focused Insurers

New Medicaid work requirements and tighter ACA eligibility could push millions off public health plans.

That’s a major blow to companies like Centene, Molina, and Oscar Health, which rely heavily on government-sponsored insurance. Since July 1, their shares have dropped 42%, 25%, and 21%, respectively.

Even healthcare giants haven’t been spared. CVS, UnitedHealth, and Cigna are down 6%, 7%, and 8% too.

💻 Telehealth: Safe Harbor Made Permanent

While insurers slipped, telehealth providers got a win. The bill makes permanent the post-COVID “safe harbor” rule that allows high-deductible health plans to cover telehealth services before the deductible is met.

That’s good news for Teladoc, Amwell, and others focused on virtual-first care.

📦 Retail: Tariff-Free Imports Get Slammed

The bill repeals the “de minimis” exemption that allowed goods under $800 to enter the U.S. tariff-free. That’s bad news for low-cost platforms like Shein, Temu, and many Amazon third-party sellers.

The trend was already rough: Temu usage in the U.S. is down 52%, while Shein has fallen 25%.

🎓 Colleges: New Taxes Hit Ivy Endowments

Colleges with endowments exceeding $500K per student will now pay 1.4% to 8% on investment income. This hits schools like Harvard, Yale, and Stanford, and is projected to raise $761M over 10 years.

In response, universities may shift toward more liquid investments. Endowment managers, including private equity and hedge funds tied to these institutions, could also feel the squeeze.

🚀 Space & AI: Federal Funding Gets a Boost

The bill increases support for spaceports, the Artemis moon mission, and federal AI development.

Primary beneficiaries likely include SpaceX, Lockheed Martin, Northrop Grumman, Rocket Lab, Palantir, and Nvidia. Expect growth in satellite contracts, rocket launches, and large-language-model research and development.

🏦 Banking: Consumer Watchdog Loses Its Teeth

The Consumer Financial Protection Bureau (CFPB) funding has been slashed, weakening its enforcement power.

That benefits big banks and fintech lenders the CFPB previously scrutinized, including Wells Fargo, Capital One, PayPal, and SoFi. Oversight of payday loans, overdraft fees, and buy-now-pay-later products may loosen.

There’s plenty more in the fine print, but these are the clearest investing takeaways so far. Expect more ripple effects in the weeks ahead as Wall Street continues to digest all that’s buried in the OBBBA!

STOCKS
5. Guess That Stock 🕵️‍♂️

This social media giant is diving headfirst into AI—with talent raids, billion-dollar deals, and a vision that includes smart glasses on your face.

Can you guess the stock?

1. The company poached Apple’s top AI leader with a $200M offer and lured multiple researchers from OpenAI with signing bonuses up to $100M.

2. It launched a new “Superintelligence Labs” division after investing $14.3B for a 49% stake in Scale AI, bringing on Scale’s CEO to help lead the charge.

3. It also dropped $3.5B on a stake in the maker of Ray-Bans, aiming to bring AI-powered smart glasses into the mainstream.

4. The stock just hit an all-time high and leads the Magnificent 7 in 2025, up 24% year-to-date.

5. It’s led by the world’s second-richest person and dominates global social media with billions of users across its platforms.

Got a guess? Tap here for the answer → 

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