InterMarket Analysis Update for Monday July 7, 2025

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Intermarket Analysis Weekly Video Update Summary (Prepared for July 7, 2025)
This weekly update analyzes various market aspects beyond the S&P 500, covering valuation, growth vs. value, inflation, other markets, sector performance, correlations, and long-term trends. Below is a concise summary of the key points:
1. Valuation:
The S&P 500 remains expensive, with the S&P 500’s P/E ratio above 20 and the Shiller P/E at 38.31, well above the historical median/mean of 16–17.
Historically, markets can stay overextended for years. Forward P/E ratios show mega caps at 29, S&P at 21.9, mid-caps at 15.9, and small-caps at 15.2.
2. Growth vs. Value:
Growth continues to outperform value, with the pure growth index hitting new highs and a recent golden cross. Value had a strong week (e.g., up 1% on July 1 while growth dipped), but growth maintains leadership.
Ratios (growth/value, ETFs, mid-caps, small-caps) confirm growth’s dominance, though value shows some improvement. A shift to defensive value could signal caution, but no clear trend yet.
3. Inflation:
Inflation appears under control. The CRB index shows a long-term uptrend but no immediate breakout. The Baltic Dry Index is declining, suggesting lower shipping costs (non-inflationary).
Inflation expectations are stable, and TIPS outperform slightly. Commodities (e.g., aluminum, corn, wheat, oil) are mostly in downtrends, except for copper (uptrend, positive for the economy).
4. Other Markets:
Currencies: The dollar is weakening against the euro, yen, and pound, potentially supporting stocks. A dollar rebound could pressure markets.
Commodities: Gold and silver are sideways, with gold underperforming the S&P 500. Copper/gold ratio is flat, and oil remains in a downtrend post-spike.
Bonds: Bonds underperforming stocks, with junk bonds hitting all-time highs. Yields (e.g., 10-year) are rising slightly, which could pressure stocks if sustained.
5. Sectors and Indexes:
S&P 500 Sectors: Tech, financials, and industrials are strong, with recent golden crosses and all-time highs. Communication services are solid but leveling off. Energy, healthcare, and real estate underperforming, while utilities and staples are sideways, not showing leadership.
Other Indexes: NASDAQ 100 outperforming S&P 500, with broader participation. Small and mid-caps are improving but lagging. The Dow and transports are in downtrends but showing progress.
Semiconductors and AI: Semiconductors (e.g., SMH ETF) are hitting highs, with AI/tech ETFs performing well but underperforming the broader tech sector.
6. Correlations and Trends:
Stocks and bonds moving together, with stocks outperforming. The S&P 500 and NASDAQ set new highs, but the equal-weight S&P lagging, showing a slight negative divergence.
Stocks are starting to outperform commodities (golden cross in stocks/CRB ratio). The dollar and S&P 500 move inversely, supporting recent market gains.
7. Positive and Negative Lists:
Positives: Growth, value indexes, copper, currencies (vs. dollar), CRB index, gold, silver, low volatility ETF, mega caps, tech, semiconductors, staples, bonds, NASDAQ, NYSE, Wilshire 5000, total US stock ETF, FANG index, ARK, high-yield loans, emerging markets, and Bitcoin are in uptrends.
Negatives: Dollar, Dow Jones composite, Dow, mid-caps, small-caps, and microcaps remain in downtrends, though improving.
8. Market Sentiment:
The S&P 500 is overextended, with sentiment indicators showing extreme optimism. Even negative news is taken positively, suggesting a potential pullback or sideways movement in July, a seasonally positive month.
9. Long-Term Outlook:
Broad market measures (e.g., NYSE, Wilshire 5000) showing strength, with golden crosses and new highs. However, global stocks and some sectors (e.g., Dow, transports) lagging, and commodities outperforming stocks long-term.
Conclusion: The S&P 500 remains bullish, driven by growth, tech, and broad participation, despite high valuations and potential yield pressures. Growth outperforming value, inflation is stable, and positive trends dominating, but caution is warranted due to overextension and lagging areas such as small-caps and the Dow.

PDF of Slides: https://drive.google.com/file/d/1kjuGmYYHuS2AJPjV9nQ5okyxdv1lolAz/view?usp=sharing

DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!