Cover:
-Wall Street is embracing ETFs, with firms like Apollo Global Management launching the SPDR SSGA IG Public & Private Credit ETF, democratizing access to private markets. This ETF trades like a stock, allowing anyone with an account at Robinhood or Fidelity to buy a portion of Apollo's $600 billion private-credit portfolio. Firms are now packaging various aspects of their funds, including Bitcoin, leveraged bets on individual stocks, and bonds that would pay out sharply in a natural disaster. This has led to a Cambrian fund explosion, with over 4,000 ETFs listed on the New York Stock Exchange, compared to just 2,400 individual stocks. Fund companies launched over 700 ETFs last year, including 33 that track cryptocurrencies, 130 "buffered" ETFs, and dozens that magnify bets on indexes or stocks. Most new ETFs are small and nichey, holding less than $100 million in assets each. However, ETFs have taken in over $2 trillion of net inflows over the past two years, bringing total assets to nearly $11 trillion.
Interview:
-no update
Tech Trader:
-Hewlett Packard Enterprise recently closed its acquisition of Juniper Networks, a networking equipment firm that could compete with Cisco Systems and Nvidia in the market for high-speed networking equipment required in AI data centers. The deal officially closed on Wednesday, and HPE shares rose 12.6% on Monday. Oracle and C3.ai are prime candidates to add AI to their software through an acquisition. Oracle has already begun transforming itself for the AI age, moving customers to cloud-based versions of its software with annual subscriptions and building large data centers to rent out cloud servers for AI and traditional workloads. In fiscal 2025, revenue from the cloud was up 24%, while the rest of Oracle was flat on the year. C3.ai's offerings would fit nicely on top of Oracle's software, as it has 130 ready-made AI applications tailored for different industries.
Oracle could use its $11 billion in cash or its stock, which trades at a premium to its historical price/earnings ratio for the next 12 months. An Oracle/C3.ai merger would face one obstacle right off the bat: the company's founders have a history. C3 CEO Tom Siebel was among Oracle's early employees and became a top salesperson.
The Trader:
-Crocs stock has been struggling since November 2024 due to disappointing results for its HeyDude brand and concerns about sales and margins. The company makes about half of its shoes in Vietnam, which could raise costs due to tariffs. The stock has fallen about 4% this year, despite the S&P 500 index rallying 5.3%. However, Crocs's recent sales decline may be due to management missteps rather than lack of demand. Crocs stock is cheap relative to its history, peers, and the S&P 500, making it a buying opportunity if profit growth resumes next year. Analysts expect a more than 4% increase next year, and Crocs trades for just eight times 2026 EPS, below its five-year average of 10.3. Crocs' gross margin stands at nearly 58%, and consensus calls for the figure to rise going forward despite concerns about tariffs impacting profitability.
-Stocks have reached all-time highs this week, with the S&P 500 index and Nasdaq Composite both rising 1.7% and 1.6% respectively. The comeback since the trade crisis has been even more impressive, with the S&P 500 up 26% from the selloff low on April 8, while the NASDAQ has surged 34.9%. The worries from supersized tariffs and the US's artificial-intelligence dominance have slowly faded, with the momentum- and sentiment-driven market rally continuing unabated. Progress is being made in various areas, including a trade deal between the US and Vietnam, which includes 20% levies, down from 46%. Other deals, including one with India, are expected soon. The latest agreement was really about China, as many of its goods are shipped to Vietnam before entering the US. It confirms that countries acting as transshipment hubs for Chinese goods may face higher baseline tariffs and additional duties on rerouted products.
Features:
-The Trump administration is expected to unveil preliminary deals ahead of a deadline for higher tariffs on over 100 countries on July 9. Trade negotiations have been chaotic since the administration paused on the tariffs it unveiled on April 2, aiming to reduce the country's $1.2T trade deficit and many non-tariff barriers. Recent weeks have seen bouts of escalation followed by de-escalation, most famously with China, and more recently with the European Union, Canada, and Japan.
The administration's vow to strike 90 deals in 90 days is out the window, as only a preliminary agreement with the United Kingdom left 10% tariffs in place before Wednesday's announcement that Vietnam had agreed to 20% tariffs. The Trump administration also said it would levy a 40% duty on "transshipped" goods, targeting concerns that China was using Vietnam to circumvent trade restrictions. Negotiations have been complicated by factors such as domestic politics, pushback from countries against U.S. demands for a harder stance on China, and uncertainty over the fate of industry-oriented tariffs.
-The Republican megabill repeals much of the Inflation Reduction Act, gutting its funding and eliminating $7,500 electric-vehicle subsidies and credits worth 30% of the value of rooftop solar panels. However, last-minute changes to the bill have opened a window for well-capitalized companies to continue receiving tax credits for the next several years. Big solar and wind developers like NextEra, AES, EDP Renewables, and Engie should continue receiving tax credits for the next several years. Sen. Lisa Murkowski, the Republican from Alaska, convinced Republican leadership to slip in a one-year delay to requirements that companies start construction on clean-energy projects to receive grandfathered tax credits worth 30% of the project's value. The new language in the bill opens up the possibility that projects that enter service as late as 2030 could receive credits. Murkowski also got the Senate to rescind an excise tax that could have decimated wind and solar developers by penalizing projects that rely on Chinese materials. The more-benign language led clean-energy trade groups to soften their previous statements on the bill, downgrading it from a disaster to a disappointment. The work of building clean energy will only get harder from here, as the industry is a multifaceted beast that won't universally benefit from the latest version of the bill.
Europe:
-The Trump administration is expected to unveil preliminary deals ahead of a deadline for higher tariffs on over 100 countries on July 9. Trade negotiations have been chaotic since the administration paused on the tariffs it unveiled on April 2, aiming to reduce the US's $1.2T trade deficit and many non-tariff barriers. Recent weeks have seen escalation and de-escalation, with China, the European Union, Canada, and Japan being the most notable. The administration's promise to strike 90 deals in 90 days is out of the window, with only a preliminary agreement with the United Kingdom remaining in place before the announcement of Vietnam's agreement to 20% tariffs. The Trump administration also announced a 40% duty on "transshipped" goods, targeting concerns that China was using Vietnam to circumvent trade restrictions. Negotiations have been complicated by domestic politics, pushback from countries against US demands for a harder stance on China, and uncertainty over the fate of industry-oriented tariffs. President Trump reiterated the July 9 deadline and will send letters to countries informing them of their tariff rates. Despite the uncertainty, the S&P 500 index has managed to hit new highs, with investors playing down trade risks after several instances where the administration has pulled back on escalatory moves.
Emerging Markets:
-No update
Commodities:
-Silver experienced a significant increase in June, returning almost 10%, surpassing the returns of the stock and bond markets in Japan, Europe, and the US. The momentum could continue as July tends to bring favorable returns for the precious metal. The reason behind silver's gain is not easily pinpointed, but it could be due to gold's 43% climb over the past year, prompting traders to look at other stores of value and safer assets like silver. Silver could also benefit from new applications in solar panels and its essential role in the semiconductor industry as artificial intelligence booms. Investors can buy the iShares Silver Trust exchange-traded fund, the most liquid silver fund with $17B in assets, which physically holds the metal in vaults in London, giving investors direct exposure to spot prices of silver. Historical returns suggest that July has been the strongest month for the fund, with an average gain of 4.5%. Investing in most actively traded futures contracts is another option, with July's 10-year average gain at 4.1%. However, silver's gain in July is not guaranteed, as the iShares ETF has logged a positive return in July six out of 10 times.
Streetwise:
-Fake farming has become a viral phenomenon, boosting Roblox stock 171% in a year. FarmVille, launched on Facebook in 2009, reached over 30 million daily users within a year. The game's success led to a 2011 initial public stock offering and a $12.7 billion buyout from Take-Two Interactive in 2022. Now, the focus is on Grow a Garden, an agricultural simulator launched on Roblox during National Farmworker Awareness Week. Roblox is a platform for user-made games with simple graphics, popular with kids for its social elements. Grow a Garden recently set a record for most users playing simultaneously, with over 20 million users. The game has been played over 12 billion times, surpassing Epic Games shooter Fortnite. Barclays Capital analyst Ross Sandler believes Grow a Garden is the only videogame that has generated this type of engagement in such a short span of time.