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The first half of calendar 2025 (1H25) ended yesterday at record highs on the major stock market indexes, but early trading ahead of the first session of 2H25 is giving some of these gains back. As investors clear the sleep from their eyes, we see a giant tax bill still being decided on in the Senate, little progress on trade deals ahead of the July 9 tariff deadline, and pending jobs numbers that have shown a bit of unraveling in the past weeks and months.
Expectations are still favorable for passage of the “Big Beautiful Bill,” which makes permanent the corporate tax cuts passed during President Trump’s first term in 2017, even as the CBO and others project more than $3 trillion added to the national debt over the next decade. Assuming the bill passes the Senate today, it then goes back to the House for re-passage, as several changes had been made to the original House bill. Trump anticipates signing this bill into law on the 4th of July, Friday.
While only an outline of a trade deal with the UK has been reached since Trump pressed pause on his reciprocal tariff initiatives, reports are the EU and Japan are in detailed talks about new trade deals with the U.S. The White House also opened the door to re-working a deal with Canada, the U.S.’s #1 trading partner.
Employment numbers are expected to bounce back on tomorrow’s private-sector payrolls from Automatic Data ProcessingADP, but only to around 100K or so. Friday’s nonfarm payrolls are currently estimated around 110K. The good news is that these levels would be enough to make up for the amount of retiring Baby Boomers per month. The bad news" There is little room for error on the downside.
All that said, a weakening labor market might provide a spark in one respect: the harbinger for lowering interest rates by the Fed. After coming down 100 basis points (bps) in 2024, the Fed has kept the 4.25-4.50% level intact through the first half of 2025. But with half of the Fed’s dual mandate fostering full employment, a downward slide in the labor market might finally pry loose a series of rate cuts, which would potentially unlock long-suffering industries, such as housing.
What to Expect from the Stock Market Today
After the opening bell, there will be plenty of data for market participants to react to: final S&P and ISM Manufacturing PMI for June, Construction Spending for May and Job Openings and Labor Turnover Survey (JOLTS), also for May. While the manufacturing data is expected to stay relatively flat month over month, construction is projected to improve, albeit still at -0.1%.
Its the JOLTS data that kicks off “Jobs Week” this week, although it does being results from a month in arrears from the private-sector and U.S. government payroll reports later this week. Analysts expect another slight downturn to 7.3 million job openings, down from the jump to 7.39 million in April. We’re still well off the peak levels of the year — north of 8 million — with the all-time high 12.1 million back in March of 2022.
One thing to keep note of is the Professional & Business Services sector. While the last report showed +171K openings for the month, private-sector payrolls from ADP a month ago showed Professional & Business Services losing -17K positions in May. For sure, this is merely one industry, but it may provide some insight into business spending among good-paying white-collar jobs.
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Renewable assets, acquisition of renewable projects, the use of asset sale proceeds to cut debts and a focus on North American operation are tailwinds for the company.
Alkermes’ strong product portfolio and pipeline progress have been impressive. Divestment and restructuring initiatives are also a positive for the company.
Approval of Ohtuvayre for the COPD indication is a major boost for Verona. The drug’s sales have become a regular source of income. Its pipeline is also progressing well.
The impressive Disney+ user growth rate driven by expanding international footprint and solid content portfolio should be the key performance driver for Disney.
Relatively high rates and modest loan growth will continue to aid Hilltop Holdings’ top line. Its strong balance sheet and business restructuring initiatives will likely offer further support.
Whirlpool has been benefiting from its cost-takeout and pricing actions. The company remains on track to deliver about $200 million of cost takeout for 2025.
The company’s acquisitions, services to a wide variety of customers, focus on emission cuts and its dividend policy will boost its long-term growth objectives.
Softness in C&I, along with tariff troubles and global macro uncertainty, is expected to weigh on Generac’s topline. Costs, high debt and competitive pressures remain headwinds.
Ashland’s profitability is impacted by headwinds in the intermediates market and portfolio restructuring. Ongoing global tariff and logistics disruptions also pose challenges.
Softness across industrial and consumer electronics end markets, rising costs, intensifying competition and leveraged balance sheets are key headwinds.
Oilfield service providers like Baker Hughes face volatility due to oil and gas companies' exposure to fluctuating commodity prices, as they support upstream firms in setting up wells efficiently.
We remain concerned about risks associated with continued challenges in the Embedded Processing segment, growing competition, intensifying US-China tech war, high exposure to the Chinese market and high debt level remain concerns.
A persistent increase in operating expenses, driven by higher compensation costs, is likely to hurt Credit Acceptance’s profitability. Weak asset quality amid a tough operating backdrop is a woe.
Amazon is benefiting from its Prime program, delivery and logistic system in the e-commerce space. Further, its dominant position in cloud market is a positive.
The impressive Disney+ user growth rate driven by expanding international footprint and solid content portfolio should be the key performance driver for Disney.
Hormel Foods aims to strengthen its business through the T&M initiative, innovation-driven growth, automation and strategic cost savings to drive long-term efficiency and performance.
Netflix’s growing subscriber base, driven by content strength, focus on originals across various genres and languages, rapid international expansion and partnerships with telcos are key drivers.
Broadcom is a leading player in the semiconductor market based on its expanding product portfolio, multiple target markets, accretive acquisitions and strong cash flow.
Higher rates for longer, decent loan demand and expansion into new markets by opening financial centers will aid Bank of America. Also, digital enhancement will keep aiding cross-selling opportunities.
AbbVie’s Skyrizi and Rinvoq, are performing extremely well, bolstered by approval in new indications, which should support top-line growth in the next few years.
