Hedgie's Market Edge - July 7, 2025

🦔 Welcome back to another week of cutting through the noise! Markets just hit fresh record highs with the S&P 500 closing at 6,279 on July 3, while the VIX dropped to 16.38, its lowest level in four months. Nvidia and tech led the charge, but this calm might be deceiving.

Here's what everyone's missing: we're heading into the most critical week of 2025. The July 9 tariff deadline, Fed minutes, and Friday's jobs report that beat headline expectations (+147K vs 118K) are setting up potential fireworks. But dig deeper into those employment numbers, and you'll see why this week's policy decisions matter even more than the surface data suggests.

The Jobs Report Disconnect: While headlines celebrated 147,000 new jobs, I showed you last week how private sector job growth at just 1.1% annually puts us in historically dangerous territory. We've only seen this three times in recent decades: July 2007 (five months before recession), March 2001 (recession start), and September 1990 (two months after recession began). Government hiring is masking private sector weakness.

Market Breadth Warning Still Flashing: As I highlighted earlier this week, only 35-40% of S&P 500 stocks are trading above their 200-day moving average. While the index hits new highs, most individual stocks are struggling. This narrow leadership makes the market more fragile than headlines suggest.