Congress passed the tax and spending bill, and the president signed it into law on July 4 but traders have already moved on. They are laser-focused on the July 9 tariff deadline. It doesn't look good.
As the holiday weekend begins, President Trump warned the nation that he will be sending letters to 10 or 12 countries starting Friday to notify them of the tariff rates they will face as of August 1. He claimed that by July 9, all nations "will be fully covered. They'll range in value from maybe 60 percent or 70 percent tariffs to 10 percent and 20 percent tariffs."
Equity futures, which are open on the July 4 holiday for a half-day, indicate that the indexes were down a little over half a percent on the news after gaining a little more than that by Thursday's close. While these letters appear to be an escalation in Trump's trade war, he has also postponed the deadline for tariff implementation once again, until Aug. 1.
Given his track record, most traders are looking to the crypto-based prediction market, Poylmarket, to gauge the chances he will follow through. As of Friday, the odds that Trump will remove most of the reciprocal tariffs before the deadline are 56 percent. Look out below, if that doesn't occur. Of course, in the event of a significant sell-off in the stock or bond market, I expect Trump and his billionaire crew to rapidly change their tune on tariffs as they have done in the past.
A deal with Vietnam was announced on Wednesday, marking the second such agreement to date. Imported goods from that country will face a 20 percent tariff, while transshipped goods, those shipped from Vietnam, but originating in another country (like China), will face a 40 percent tariff. U.S. exports to Vietnam would not face a tariff. That is good news, but small potatoes (U.S. exports total $13 billion) compared to what we export to other countries in the European Union ($592 billion) or Japan ($79 billion). The president has already said he doubts a deal with Japan is forthcoming.
Regarding the passage of Trump's spending bill, aside from the fact (denied by its legislators) that this so-called "beautiful" bill will increase the U.S. debt load by $3 trillion to $5 trillion over time, it will once again be an exercise in redistributing wealth from the poor to the wealthy. Remember, taxes under this bill will remain the same. They just won't go back up because the bill extends the status quo. There are a few minor exceptions, such as no taxes on tips or overtime for some Americans, and seniors receive a break through tax credits.
More than two-thirds of the total tax cuts will continue to benefit those with annual incomes above $217,000. Those making $1.1 million or more will garner one-fourth of the tax benefits. However, the real issue for GOP politicians is the spending cuts. The deep cuts in Medicaid and SNAP programs disproportionally impact working-class voters (defined as those without a college degree).
Those are the voters who put both Donald Trump and a slim majority of Republicans in Congress in power. That is the main reason, aside from the cost of the bill, that the GOP, despite their majority in both houses, have struggled to pass this bill.
In 2023, Republicans represented 56 of the 100 lowest-income districts in the House. Republicans are counting on Trump's ability to sway the public to disregard the fine print in the bill. We all know why. Republican politicians worry how 20 million or more Americans, who face a deep decline in their social safety-net programs, will feel about their elected representatives come election time. To avoid that, Republicans deferred their most painful spending cuts until after the midterm elections.
In the meantime, the pressure on Fed Chairman Jerome Powell to cut interest rates continues unabated. The spate of weaker inflation data, combined with a recent weakening in economic growth, has prompted more players to follow the president's lead in calling for cuts as early as July. The June labor report punctured that narrative. The non-farm payrolls report was an upside surprise, as the U.S. economy added 147,000 jobs, exceeding the 106,000 that economists had expected. That pushed the headline unemployment rate down to 4.1 percent. It suggests that there is no need for a rate cut at this time.
My higher-end target on the S&P 500 Index was exceeded this week. As readers are aware, I have been anticipating a bout of profit-taking in July. Next week, we could see a pullback based on Trump's latest tariff threats. A 2-3 percent sell-off in the averages is possible, which may be a chance for the markets to refuel from overbought levels.
And yet, I see no real signs that the bulls want to relinquish their hold on the markets. Seasonally, July is a good month for markets, with an average gain of around 2 percent. In addition, the AAII investor sentiment survey is not nearly as euphoric as it should be, given a 28 percent gain in the stock market from its lows.
While there is no sure way to predict an interest rate cut in July or another extension of tariff delays after Aug. 1, either occurrence would send markets higher, possibly into what is called a "blow-off top." If so, this could catapult the S&P to 6,350-6,500 in a relatively short time. As such, over the next two weeks, anything could happen so strap in!
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
The dermatology sector in health care is expected to grow by almost 7 percent per year between now and 2034. That is good news, but the increasing incidences and prevalence of skin disorders are behind the industry's torrid growth rate.
The global market was estimated to top $1.4 billion last year, with North America being the fastest-growing market, followed by the Asia-Pacific. Skin cancer, warts, infections, dermatitis, psoriasis, and acne are among the primary disorders treated using a variety of therapeutic strategies, including cryosurgery, laser therapy, photodynamic therapy, radiation, and vitiligo therapies.
Over the past decade, like many other health-care areas, acquisition and investment activity in dermatology has skyrocketed, fueled by private equity, family offices, and institutional investors.
I am practically an expert in the area, given the number of times I have been scraped, cut, fried, and zapped over the last several years. As I wait for yet another biopsy on two spots, one on the crown of my head and the other on my forehead, I wonder how come I have all these unrelenting skin treatments when my parents had none, so I did a little research on the subject.
Each year in the U.S., an estimated 6.1 million people are treated for skin cancer, and that number is growing. With names such as basal cell carcinoma and squamous cell carcinoma, the most common forms are usually treatable. Most of these maladies are caused by overexposure to ultraviolet radiation from the sun and indoor tanning devices.
We know that the thinning of the ozone layer, where 90 percent of the earth's ozone sits between six and 31 miles above the surface, is partially responsible. This allows harmful ultraviolet rays (UVA) to penetrate the earth's surface and damage the middle layer of our skin. Unfortunately, it was only in the late 1970s that people realized that man-made chemicals, specifically chlorofluorocarbons, were destroying the ozone.
As a Baby Boomer, I recall the 1950s at Barnegat Bay on the Jersey Shore with my family. That's when suntan lotion became "a thing." We kids had to slop Coppertone on, although my parents rarely used it. It did little good anyway since I still managed to get a glowing red sunburn that ended in my peeling away large sections of white dead skin weeks later.
Reflecting on the past, I realized that basting in the sun only gained popularity in the late 1950s, at least in this country. It was then that the modern bikini became the rage for American women, shortly after Brigitte Bardot modeled a floral version on the beach at the Cannes Film Festival in 1953.
Before that, having a summer tan was the mark of a lower-class individual or an outside day laborer, while pale skin signified anything but. Having a tan became high on everyone's agenda. A tan was healthy, sexy and signified someone on the move.
I also recall that every male in America wore a hat of some kind while I was in grammar school. It was only after John F. Kennedy first appeared bareheaded at his 1961 inauguration that wardrobes began to change. He is credited with the death of the men's hat as males of all ages gladly exposed their scalps to the rays of the sun in perpetuity.
The point is that, in general, people wore far more clothes back then than we do both summer and winter. Next week, I will expand on this combination of culture, science and events that conspired to create today's epidemic of skin cancer.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
Mission accomplished. After a tumultuous six months in 2025, equities managed to overcome every obstacle and closed in on new highs. What does that mean for the second half of the year?
The short answer is nothing. We start again. Investors need to take each day as it comes. It is a world where governments have more weight and influence in determining the outcomes of both the economy and the markets than ever before.
I hope you read last week's column, "Regional Conflicts Present Buying Opportunities." I reminded investors that recent skirmishes, such as the one between Iran and Israel, usually do not last long and have little bearing on markets three to six months out. This week's cease-fire between the two adversaries is a case in point and is partially responsible for the breakout to new highs we are enjoying today.
Kudos to Donald Trump for engineering the circumstances that one can hope will make the Middle East a safer place in the future. And lest you think the president headed off to play golf, think again. He is now brow-beating the Senate to pass his Big Beautiful Bill (BBB) before the Senate's self-imposed deadline of July 4. He has already told legislatures that there will be no vacation days for them until this bill passes.
A lot is riding on that bill passing. I believe the market has already discounted its passage, so any hiccups or delays could spark a rush toward the existence. The most significant concern among the dissenting Republican politicians is not the spending part of the bill. Like most politicians, they talk a good show on the need to rein in spending but never do. It is that the cuts in Medicaid and other social programs may hurt some politicians' chances in the next election.
As investors await an outcome on that front, the president's feud with Fed Chairman Jerome Powell is intensifying. Readers may recall that Trump appointed Powell to lead the Fed back in 2018. Powell's term does not run out until June 2026. But it appears the president doesn't want to wait that long. This week, he floated the idea that he will name his pick to succeed Powell much earlier than is customary, possibly as early as September or October. Interestingly, several members of the Fed are already auditioning for the job by mimicking Trump's demand that the Fed cut interest rates as early as July.
Former Fed Governor Kevin Walsh, National Economic Council Director Kevon Hassett, Treasury Secretary Scott Bessent, Fed Governor Christopher Waller, and former World Bank President David Malpass are reportedly on Trump's shortlist. The thinking is that by naming a successor early, the president would undercut Powell's authority for the remainder of his term.
The odds of two rate cuts this year are rising, and stocks are climbing in anticipation that this additional pressure will force Powell to reconsider and reduce interest rates.
My two cents is that Powell is correct about waiting. As readers are aware, I expect inflation to rise through the end of the year, possibly reaching 2.9-3 percent by December. The Fed's preferred inflation indicator for May, the Personal Consumption Expenditures (PCE) price index, released on Friday, showed an increase, which was in line with my expectations but higher than the Street's forecasts. At best, we need to wait until we know whether or not Trump will do another TACO (Trump Always Chickens Out) on tariffs in July.
All indications are that he will once again postpone. China and the U.S. say they are working toward an agreement on tariffs, and Commerce Secretary Howard Lutnick promises that tariff agreements with 10 nations are "imminent." Treasury Secretary Scott Bessent chimed in by predicting that the U.S. could complete the balance of its most important trade talks by Labor Day.
Last week, I worried that the war in the Middle East would screw up my bullish forecast: "That leaves the market's range bound and probably short circuits my hope that we could reach 6,100-6,250 on the S&P 500 anytime soon. Now, don't take that as gospel because events could turn on a dime, propelling stocks higher." That is precisely what occurred.
We are within striking distance of 6,250, the high end of my target range. Next week is the end of the second quarter and depending on the headlines on tariffs, the BBB, etc., we could see a blow-off top in the markets. After that, I am looking for some profit-taking in July and possibly August.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
Stablecoins have become a hot topic lately. The supply of this digital currency has grown from $2 billion to $200 billion, and it is beginning to transition from the digital to the conventional world of finance. The Senate's passage of the GENIUS Act this month sets the stage for stablecoins to further integrate into the global economy.
A stablecoin, for those who have yet to dip their toes into the digital world is a cryptocurrency without the notorious volatility typically associated with that asset class. Their value is generally pegged or tied to that of another currency, such as the U.S. dollar, a commodity like gold, or another financial asset, such as a U.S. Treasury bond or bill.
Stablecoins can act as a medium of exchange. To do so, a stablecoin, like any other currency, must remain relatively stable, assuring those who accept it that it will retain purchasing power in the short term. That is where the need for collateral comes in.
There are four types of stablecoins, depending on the types of collateral they have chosen. Fiat-collateralized stablecoins maintain a reserve of a fiat currency such as the U.S. dollar or, in some cases, U.S. Treasury debt instruments. As such, stablecoins have become one of the largest holders of U.S. Treasuries in the world.
Other collateral choices include commodity-backed stablecoins, pegged to the market value of individual commodities such as gold, silver, or oil. Crypto-collateralized stablecoins, backed by cryptocurrencies and algorithmic stablecoins, are computer-driven and strive to keep the stablecoin's value stable by controlling its supply.
Until now, the stablecoin universe has been considered the exclusive domain of crypto enthusiasts who require a digital cash equivalent to finance their trades. The GENIUS Act, short for Guiding and Establishing National Innovation for U.S. Stablecoins, just passed by the Senate, is intended to open this market to the conventional financial world.
The act aims to establish a clear federal framework for stablecoins, introducing strict reserve, licensing, and consumer protection standards. Rather than speculative instruments, the act would treat stablecoins as a payment infrastructure with full reserve backing and monthly audits for issuers to ensure stability and reliability. The legislation now goes to the House, where the act could pass by the end of August.
If the act passes, the benefits will likely first accrue to the crypto investor, who can use these stablecoins as a cash management tool. For example, it could be a place to store their profits from Bitcoin or Ethereum, Solano, etc., without converting those gains back into a fiat currency. The investor could even receive an interest rate return, as many of these stablecoins now offer annual yields similar to those of money-market mutual funds. If a new opportunity in the crypto universe comes along, he could then use these stablecoins to acquire it with his stablecoins.
If the GENIUS Act becomes law, it would be logical to transition this digital asset into conventional finance. These coins, for example, could be used similarly to debit-card-based payments. In the brave new world of digitalization, stablecoins offer some real advantages.
It all comes down to time and money. In today's conventional transfer of funds between two or more parties, intermediaries charge a fee based on the amount transferred and typically require a waiting period before the transaction is complete. Some sums of money can take days to settle or more or are limited to being transacted only during specific windows of opportunity, such as bank working days.
Blockchain technology eliminates most of that. Stablecoins enable near-instant transfers, improved settlement speeds, and reconciliation of business payments almost instantly. Internal branch-to-branch or book transfers for banks, as well as intercompany settlements, would also be much faster and cheaper than straight money transfers. Many transactions could be significantly less expensive because they bypass intermediaries.
Additionally, stablecoins can utilize contract technology to facilitate automated payments under predefined conditions and events. Real-time transaction tracking would become commonplace, and stablecoins could be used across various platforms, wallets, and networks. A well-regulated digital entity could trigger significant changes in the way money is transferred among governments, banks, merchants, technology platforms, and digital wallets, as well as between traditional and decentralized financial systems.
For consumers, three obvious benefits include online shopping and sending and receiving money internationally, as well as paying utilities, subscription services, rent, and, at some point, even mortgage payments.
There has been a complete turnaround in the government's attitude toward all things crypto, largely thanks to President Trump and his administration. In the case of stablecoins, the U.S. Treasury has been particularly enthusiastic over the prospect of institutionalizing the acceptance of these coins. Since most stablecoins are pegged to the dollar (over 90 percent), they help to cement and maintain the dollar's dominant role in the global economy. A growth industry, such as stablecoins, could also increase the use of U.S. Treasuries as collateral. That would open up a vast new market for our sovereign debt, something that would likely keep long-term bond yields in check for the foreseeable future. In any case, stablecoins are part of the new digital frontier, and I expect to see their use sprout throughout society in the years ahead.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
Every new headline sends markets this way, with traders caught between a rock and a hard place. Geopolitics, tariffs, and economic data need to play out over the next two weeks before a clear direction unfolds.
The Iran/Isreal conflict remains in the shooting stage, with both countries rapidly depleting their store of missiles and air defenses. It seems the TACO (Trump always chickens out) trade can also be applied to warfare. Markets fell as President Trump talked tough, threatening Iran with bunker-busting bombs unless the country surrendered unconditionally.
Two days later, on Thursday, while the markets were closed, he announced that he was giving peace a chance. He said he would take two weeks to decide on his next course of action. That gives Iran time to find a diplomatic off-ramp to appease the U.S. on its demand to end its nuclear weapons program. Israel, on the other hand, is moving forward with its attacks on Iran's nuclear facilities despite Trump's decision.
The oil and gas markets are fluctuating by several percentage points per day. The dollar has also been climbing, while the traditional go-to safe-haven trade of gold is not working at all. Gold, throughout most of this conflict, has been falling while silver has skyrocketed. This is confounding traders, since the opposite is typically expected in times of geopolitical stress.
Cryptocurrencies are experiencing a similar decline to gold, which is no surprise. This underscores the argument that digital currencies are not a safe haven but rather speculative assets with a high correlation to equity markets.
The Federal Open Market Committee meeting this week, as predicted, decided to sit tight and see what develops. While some investors were miffed that the Fed did not cut interest rates (as President Trump had suggested), most investors were not surprised. Chairman Jerome Powell made it clear that he needed to see how the upcoming tariffs would impact the economy and inflation.
Readers are aware that I am in the stagflation camp. I anticipate inflation will rise throughout the end of the year, accompanied by a slowing economy. That puts the Fed in a box where they are damned if they do, damned if they don't. Cutting interest rates would heighten inflation, but hiking rates would risk tipping the economy into recession. Sitting on their hands and watching how Trump's tariff and tax bill plays out is the only safe course available to them.
And speaking of tariffs, where are all these deals we were promised? Only one has been inked, and that is with Great Britain, where the U.S. has a trade surplus! How many times must we be assured they are coming in a week or two?
In an interesting progression, investors face a series of make-or-break events divided into roughly two-week increments between now and the middle of July. The decision on Iran will come first, followed by the passage (or not) of the Big Beautiful Bill on or around July 4. That may turn out to be the Big Ugly Bill, depending on who you are, but its passage would be a big boost to stocks for at least a day or two. And then, we have the implementation of reciprocal tariffs (or not) on July 9th. The market expects that TACO man will kick the can down the road for the second or third time. I am losing count.
So, where does that leave the markets? As I said, expect a chop fest. Last week, I narrowed my upside range for the markets based on the outbreak of war in the Middle East. Since then, the S&P 500 Index has gone nowhere. Next week, barring a cease-fire and peace between the two combatants, markets will continue to gyrate based on the latest headlines.
That leaves the market's range bound and probably short circuits my hope that we could reach 6,100-6,250 on the S&P 500 anytime soon. Now, don't take that as gospel because events could turn on a dime, propelling stocks higher. I just think that the probability of reaching my former targets has lessened. In July, however, I do expect we will be cruising for a bruising that could pull that average down by 400 points or so.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
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