Stocks Hit Record Highs, Delta's Upbeat Forecast Lifts Airlines, Bond Auction Signals Strong Demand, and Markets Shrug Off Tariff Noise/Try the Spaghetti

July 11, 2025

Things you need to know.

- Stocks hit new highs.

- Bond auction finds plenty of demand.

- DAL surprised to upside – takes the whole industry higher.

- Trump announces 35% tariffs on Canada. Futures decline.

- Try the Lemon Spaghetti straight from the Amalfi Coast.

And it’s another RECORD! Stocks marched higher….the Dow up 192 pts or 0.4%, the S&P up 17 pts or 0.3%, the Nasdaq added 19 pts or 0.1%, the Russell added 10 pts or 0.5%, the Transports doubled down reversing Wednesday’s losses, rising 412 pts or 2.6%, the Equal Weight S&P added 43 pts or 0.6%, while the Mag 7 added 178 pts or 0.7%.

The ongoing push higher (yesterday) being credited to an ‘upbeat’ forecast from DAL – it rallied by 12% or $6/sh after they reported ‘better than expected’ EPS and raised their forecast for the balance of the year suggesting that travel demand is stabilizing – and maybe the worst is over. They reported $2.10/sh vs. the expectation of $2.07 with revenues of $13.87 billion vs. the estimate of $13.84 billion. This caused the whole sector to rally in anticipation of what the others will report. The JETS etf (airlines) rallied by 7.3% yesterday taking it down from 6% on the year to +1% ytd. United +16.4%, AAL +13.9% and JBLU + 11.9%.

Now the ongoing tariff drama appears to be more of a side show rather than center stage at the moment. This morning it’s a 35% tariff in Canada on top of the 50% tariff in Brazil. Either way – the contradictory risks of tariffs policy, fiscal policy and monetary policy do not appear to be rattling the markets (for now). And for those expecting a rate cut in July - my friend Tom Essaye of the Seven’s report makes it very clear. He tells us that.

“There’s zero chance we’ll have tariff clarity by August 1^st which makes a July rate cut impossible and that the practical impact of this consistently delayed tariff policy reduces the chances of a September rate cut, which could leave rates higher for longer…..”

He went onto say that this increases the chances of an economic slowdown – I am not in that camp (yet) – the hard data remains robust – but that’s what makes a market – buyers and sellers!

TSLA which caused all kinds of angst on Monday – falling as low as $289/sh after Lonnie announced his intentions to form a 3^rd’ political party has appeared to shaken off any concerns rallying back $20 or 0.7% to end the day at $308/sh and this morning it is up another $1 at $309/share.

Then we had that bond auction!

The $22 billion 30 yr bond auction went off without a hitch, demand was fine, so sit back, there is still plenty of demand for long term US debt – in fact the bid to cover ratio of 2.38 x’s was well within recent ranges.

Direct bidders – typically large financial institutions, such as banks, hedge funds, or other entities who buy for their own investment portfolios took down 27.4% of the offering,

Indirect bidders –who often include foreign central banks, sovereign wealth funds, or other institutional investors who may not have direct access to the auction system took down 59.8% - a significant portion of the offering while primary dealers took the balance at 12.8% - think JPM, GS, C and Barclays etc. There are about 25 primary dealers that play a role in the auction.

Just a side note – a major portion of ‘indirect bidders’ represents ‘foreign’ demand for our debt. Now, why does this all matter? Because it gives us insight into who is buying our debt – so a high proportion of indirect bids might signal strong foreign interest, while strong direct bidding may indicate robust domestic institutional demand. In either case – demand (weak or strong) will influence yields and perceptions of the bond’s attractiveness and yesterday’s auction was apparently ‘attractive.

The auction caused 30 yr bond yields to close at 4.889% - below the expectations of 4.89% and this morning – the 30 yr is yielding 4.90% up 2 bps. 10 yr yields closed at 4.349% and this morning they are up 3 bps at 4.38%. Now just fyi – 12 month CD rates (that tie up your money for 12 months) range between 4% and 4.3% depending on where you go and my fidelity gov’t money mkt fund (completely unrestricted) is paying you 4.3% - not so bad for money that is waiting to be invested. So, it’s all good.

Oil fell 2.2% or $1.50 /barrel yesterday taking it down to $66.87 and this morning it is down another 20 cts at $66.67. Now what is really interesting is that we learned that Saudi Arabia, Iraq, Kuwait and the UAE all RAISED production BEYOND their quotas last month while Israel and Iran went to war in a rush to export oil out of the Persian gulf – this flood of extra oil raises the idea of a substantial surplus in the months ahead and so, like I have been saying – it’s a supply issue not a demand issue…now while the war put a premium on the price of oil, a ceasefire removes that premium and the oversupply will help to reduce prices in the months ahead. Oil is now sitting right on trendline support at $66.70 – a failure to hold will see oil trade right back down to $64.40.

Now interestingly enough, Gold continues to push higher – this morning it is up another $20 to trade at $3,346…. the issue? The latest tariff drama – think Brazil and Canada. Also consider the fact that we have not reached a deal yet with the EU and that is causing some gold bugs to go all in on gold. Again we are hugging the trendline ($3341) remaining in a tight range of $3,297/$3400.

Now – the VIX does not appear to be concerned at all about apparently ‘anything’ – it is trading way down in the complacent zone -showing NO signs of distress and that will allow stocks to climb. Now remember what I said -all we will need is just ONE negative headline for the VIX to spike and stocks to decline. So, this is not the time to fall asleep! Maybe the latest tariff headline will change that! This morning the VIX is up $1 or 2.5%.

There is not eco data today – but next week brings us both the CPI and PPI – along with the official start of earnings season on the 15^th….so stayed tuned…it is sure to be fun.

This morning US futures are DOWN….. Dow futures 310, S&P’s -40, Nasdaq down 129 while Russell is down 26. Surprised? Hardly…..Look at the chart – it has done nothing but go straight UP. We have been discussing the RSI and last night it closed at 71.3165 – ABOVE the level that suggest we are ‘overbot’! Even CNN’s Fear and Greed is screaming GREED – which suggests an overbot condition…..We discussed this yesterday. So, you should not be surprised at all. And let’s be honest – you should not be surprised if we trade down to the 6000/6100 range which is only about 2 1/2%.

Recall yesterday I told you that our friends at Goldman raised their outlook for US stocks (essentially calling it a BUY) …citing the continued strength in US companies. My reaction? If that’s not a SELL signal, I don’t know what it is!. And…… here we go….

European markets are also all lower….as they too wait for ‘the letter’ defining what Trump intends to do with them. Across the continent markets are down more than 1%.

The S&P closed at 6280 – up 17 pts. Today is Friday, it’s the end of what has been a good week for stocks and crypto btw….Bitcoin is now trading at $118k/coin (+26% ytd) and next week is officially ‘Crypto Week’ in DC where lawmakers are expected to vote on a range of crypto legislation. So, get ready. Lot’s can happen over the weekend – we’ve seen that, so remember – just stick to the plan. Talk to your advisor, stay the course.

Call me for a free (no obligation) portfolio analysis. 561-931-0190

Take good care,

Kp

Simple Lemon Spaghetti

It makes you think of summer all year long.

For this you need: 1/2 lb of spaghetti, Olive oil, butter, 2 lemons, fresh grated Pecorino Romano cheese, mint and fresh basil.

Start by bringing a pot of salted water to a rolling boil.

Add the pasta and cook for 8 mins.

In a large sauté pan – melt ½ stick of butter and some olive oil. – Heat it up.

Add in the zest of 2 lemons and the juice.

When the pasta is done – add it to the pan, add in a ladle of the water (tears of the Gods) and toss - Now add the mint and basil - - let it cook for another min…

Now turn the heat off and add plenty of Pecorino Romano cheese and toss.

Say hello to the Amalfi Coast! You can thank me later!

Buon Appetito

Source: Bloomberg, CNBC, Reuters, Wall Street Journal

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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.