Magnificent 7 Take the Lead, Waller Auditions for the Fed Chair, and Gold Eyes a Breakout/Try the Italian Bread Salad

July 21, 2025

Things you need to know.

- Dog Days of Summer are in full swing.

- It is a big earnings week – but next week will be too.

- Oil down, Gold up, Bonds Up, Yields down.

- Chrissy Waller continues to push for a rate cut.

- FOMC decision is now only one week away.

- Try the Southern Italian Bread Salad.

Good morning—

I’ll be joining Cheryl Casone this morning on Mornings with Maria (Fox Business) at 8:20 AM—tune in!

Markets Recap

Friday’s session was classic “dog days of summer” stuff. The Dow lost 142 points, the S&P slipped just 1, while the Nasdaq inched up by 10. The Russell 2000 fell 13, Transports dropped 110, and the Equal Weight S&P gained 2. Meanwhile, Magnificent 7 rallied—adding 192 points—reminding us yet again where the market’s strength remains concentrated.

Away from equities, Bitcoin closed at $117K, Gold gained $13 to settle at $3,358, and Oil finished at $67.43. Bonds rallied, sending yields lower: the 2-year now yields 3.84%, the 10-year is at 4.37% (down from 4.45%), and the 30-year sits at 4.95% (down from 5.01%). TLT and TLH rose 0.15% and 0.3% respectively.

Fed Drama: Waller Wants the Mic

On Friday, Fed Governor Chris Waller reiterated the case for rate cuts, claiming the labor market is “on the edge.” On the edge of what, exactly? Did I miss the memo?

The labor market remains solid. We added jobs in the latest NFP report, and unemployment actually ticked down to 4.1%. Initial jobless claims have declined, and even the JOLTS report doesn’t show any real weakness.

But Waller’s not talking about where we are—he’s making a case for where we’re going. He’s looking forward and saying weakness is coming. Really?

Here’s what’s actually happening: he’s auditioning. Trump has made it known he wants a new Fed Chair, and Waller is raising his hand by publicly challenging JJ. It’s a political move. But don’t expect a rate cut next week. Fed futures are still pricing in essentially zero chance of a cut. Without a major data shift or surprise, it’s just not happening.

Tomorrow marks one week before the Fed enters its pre-meeting blackout period—when voting members can no longer speak publicly. So, if we’re going to see a narrative shift after today, it’ll come from the usual sources: non-voting members, Nicky T at the WSJ, or our friends at Goldman Sachs. If there’s a pivot coming, it’ll be leaked—so the market isn’t blindsided at 2 PM on Wednesday, July 30th.

Earnings: We’re in the Thick of It

So far, Q2’s earnings have been solid. Roughly 78% of reporting companies have beaten bottom-line estimates—right in line with long-term averages. Big banks didn’t broadly disappoint, but their cautious tone signals potential headwinds. Market reaction has been muted, likely because these stocks were already priced for good news.

But now we’re in it—the meat and potatoes of earnings season. This week, over 400 companies will report, including 42 names from the S&P 500 and 6 from the Dow.

Key earnings to watch:

GOOG, TSLA, IBM, VZ, KO, GM, HON, SHW, LMT, HAL, NOC, KEY, PM, CRCL, COF

These names span: Internet/Media, Autos, IT Services, Wireless Telecom, Beverages, Industrials, Chemicals, Defense, Oil Services, Tobacco, and Consumer Finance.

The diversity—and weight—of this week’s lineup makes it a critical stretch for markets. Focus not just on the numbers, but on the guidance.

Economic Data: Light Today, Heavy later in the week.

Tuesday: Philly Fed Non-Manufacturing Index (services), Richmond Fed Manufacturing Index (expected: -2).

Wednesday: Mortgage Applications, Existing Home Sales (expected: -0.7%)

Thursday: S&P Global Manufacturing PMI (expected: 52.5 – expansion), S&P Global Services PMI (expected: 53 – also expansionary), New Home Sales (expected: +4.3% vs. last month’s -13.7%), Building Permits.

Friday: Durable Goods Orders, Capital Goods Ordered & Shipped, Kansas City Fed Services Activity.

Oil is down 23 cents this morning to $67.11. Last week, it looked ready to break out—but it stalled and is now testing trendline support. OPEC+ is pumping more, with further increases expected in August. So, this isn’t a supply issue—it’s a demand story, and I believe it stays that way.

Gold is up $14 this morning, holding above trendline support but not yet breaking out. If you draw a triangle from April highs and lows, we’re right at the apex. My gut says concerns over the August 1st tariff deadline will push gold higher toward a test of the June 3,470 high.

Futures This Morning- Markets are higher across the board: Dow futures +105, S&P futures +16, Nasdaq futures +65, Russell +12.

The VIX remains below all three trendlines, pointing to continued optimism—but keep an eye on the RSI, which is flirting with overbought. One bad headline could shift the mood quickly.

European markets are lower this morning: Italy -1% while the UK -0.1%. UK consumer sentiment dropped the most in three years, and unemployment rose to 4.7%, the highest since 2021. Like here, the focus remains on earnings and the upcoming August 1st tariff deadline. No deal yet, but negotiations are ongoing.

The S&P closed on Friday at 6,296, down just 1 point. We traded up to a new high of 6,315 before pulling back. This morning’s future suggests another test is coming.

We’re in uncharted territory—you can draw a trendline that signals a top, or one that suggests more room to run. I’m leaning toward topping out. Things feel too good up here for me to chase. Keep new money in your government money market fund (earning 4.25%) and wait for more clarity around August 1st.

Want to Talk Strategy? Let’s review your plan. Call me for a complimentary, no-obligation portfolio analysis: 561-931-0190

Take good care,

Kp

Southern Italian Bread Salad

A perfect summer side.

You’ll need: Cucumbers, Red onion, Tomatoes, A loaf of Pane di Casa (unsliced), s&p, Oregano, cold water, Olive oil.

Peel and slice the cucumbers. Chop tomatoes and slice the onion. Cut the bread into just-larger-than-bite-size pieces.

In a large bowl, whisk together ¾ cup of cold water, olive oil (about 3 turns), and a pinch of salt and pepper. Toss in the veggies and bread, mix gently, and top with fresh oregano.

Serve immediately with dinner.

Buon Appetito

Source: Bloomberg, CNBC, Reuters, Wall Street Journal

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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.

Kenny Polcari is the Chief Market Strategist for SlateStone Wealth. Neither Kenny nor the partners of SlateStone Wealth are compensated in any manner by the issuers of any securities mentioned in the publication.