After the 4th of July weekend, we return to our post–Liberation Day story: Trump — the hero of his own epic saga — has the Big Beautiful Bill behind him.
Now, he must battle Democrats, illegal aliens, deportations, district courts, Mexican cartels, markets, the monetary system, an economy sliding toward recession… and a new political arch‑nemesis, Elon Musk.
Welcome to the second half of 2025.
Pregame for the midterms.
You can’t make this stuff up.
The S&P 500 kicked off the post–July 4 week scorched yet somehow at a fresh high, fueled by Thursday’s robust jobs report (markets were closed Friday).
Retail traders are riding high — they’ve pumped a record $155 billion into U.S. stocks and ETFs in 2025, topping the meme‑stock mania of 2021, per VandaTrack data.
Their exuberance has lifted share prices across retail favorites like rental car darling Avis.
Over the holiday weekend, the dollar found some specious footing, and a cooler tone crept into trade-sensitive sectors.
Focus returned to tariffs: President Trump’s 90‑day pause ends Wednesday, and investors are eyeballing July 9 as the next pivotal moment, even as there’s a move to push the pause out to August 1.
S&P Hits Record Highs—but Warnings Flash for Risky Names
The headline numbers are eye‑watering — but beneath the surface, the story isn’t quite that rosy.
Small‑cap stocks — often laden with debt and low margins — have surged the most, driven by speculative bets and big trading desk plays seeking short‑term pop from 2025’s worst names.
Bloomberg Intelligence recently flagged investor sentiment swinging from “panic” in April to “approaching manic” in June — a classic setup where smaller names often hit the wall before large‑caps do.
If the S&P 500 hadn’t already posted its 7th high of 2025, we’d read a resurgence of small caps as a sign. Typically small caps lead the way out of bear markets.
With the S&P doing its best Icarus impression, that’s not the case this year.
Tariff Truce Ends, Sort Of
Remember Liberation Day? That explosive April 2 tariff reveal wiped out trillions in value before Trump paused the barrage.
Here’s what’s next: letters go to roughly a dozen countries this week, warning that if they don’t cut a deal, tariffs bounce back to April 2 levels on August 1, Treasury Sec. Scott Bessent told CNN. Trump upped the pressure Sunday, threatening an additional 10% tariff on BRICS‑aligned nations. Trade has become theatre, and the curtain lifts on the second act Wednesday.
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Big Beautiful Bill Signed on The 4th
Trump’s signature legislation cleared Congress and hit his desk Friday. What’s the impact? It locks in 2017’s tax cuts, lifts SALT and estate exemptions, offers a senior Social Security tax bonus, and even gives new parents a $1,000 savings kickstart.
Our friends at Brew Markets summarized a few studies on the new laws’ benefits:
- The top 20% of earners will see their net income increase nearly $13,000 per year, according to Penn Wharton.
- Penn Wharton also found that the top 0.1% of earners will gain more than $290,000 per year.
- Well over $3 trillion could be added to the deficit over the next 10 years, according to the nonpartisan Congressional Budget Office. (The national debt is currently around $36 trillion.)
The law also makes significant cuts to the social safety net, particularly via food assistance benefits and Medicaid spending:
- About 7.8 million people could lose health insurance by 2034, the CBO estimates.
- Cuts to SNAP, formerly known as food stamps, could affect more than 40 million people, according to the Center on Budget and Policy Priorities think tank.
What else is in it? Older Americans will have access to a senior “bonus” to help defray Social Security taxes, babies born in 2025 through 2028 will start getting $1,000 in a savings account, and there will be new deductions for workers who rely on tips or overtime.
Overall, we see this legislation giving markets the lift they need to make new highs. But it will accelerate longer-term debt problems – and likely allow gold to continue shining as an alternative investment.
Trump vs. Musk
“Not so fast,” says former Trump ally, Elon Musk, now emerging as a political rival. Musk was all over social media this weekend announcing the new American Party in the middle. His focus: defeating Republicans who voted for the Big Beautiful Abomination in the midterms.
Musk feels like, after he got a look under the hood during his time at DOGE, the Republicans have gone back on their promise to address spending and the cancerous debt piling up minute by minute. One estimate says the new bill will push the debt over $40 trillion this year.
A 65% emoji-laden X poll in support of the American Party (and a pause from Tesla in the stock market) — it’s the next act in political theater. And the birth of a political rival Trump has yet to face.
Musk says fixing the two party system in the US is “not hard, too be honest.” Heh. We’ll see.
Trump, who flirted with running on the Reform Party ticket back in the early 2000s, fired back Sunday, calling third parties “Complete and Total DISRUPTION & CHAOS.”
“Who knows what to believe these days?” asks our friend James Kunstler. Well, what would you expect after years, even decades, of anti-reality operations by everyone from the CIA to The New York Times to Harvard U. Is it any wonder that reality-optionality is making people both apathetic and insane?
Tesla shares slid. Political theater is now a market driver — and the arch-nemesis storyline is live. It’s all part of the Great Fire we warned about as a necessary first step towards President Trump’s Great Reset.
BRICS Summit—Dollar’s Global Shadow Test
As Churchill once said, global power matters — the BRICS Summit in Rio is testing the dollar.
Notably, Xi Jinping skipped the event.
Trump’s Truth Social salvos warn that any country leaning toward the BRICS gets slapped with extra tariffs. The message: “It’s our currency, our game.” This may be one of the biggest pieces of political stage-setting in your lifetime.
Apple & TikTok—Silicon Valley’s Regulatory Drama
Apple is fighting a €580 million EU fine, calling it “unlawful.” TikTok is prepping a U.S.–specific version ahead of sale.
Meanwhile, Sun Valley’s billionaire confab kicks off tomorrow, with Bezos, Zuckerberg, Cook, Schumer… a billionaire playground — and networking center where policy, power, and deals form quietly out of the headlines.
Teen Job Woes—A Signal from the Ground Up
Although the June jobs report showed 147,000 new positions — good versus the expected 110,000 — teens aren’t seeing it. Only 34.5% are working or searching — the lowest in 15 years.
With automation encroaching and adult workers crowding typical youth jobs, this is more than a seasonal dip: it’s early evidence that economic growth may be losing steam. That’s a background hum for budget holders and retirement investors alike.
From tax-law turnarounds to tariff theater, corporate spats, and labor dysfunction — all under the gaze of election season — this is a high-stakes narrative in real time. Trump, acting as hero and provocateur, has unleashed a ready-made script for midterm dominance — one that deeply impacts your investment blueprint.
If you’re going to win in this second half, you’ll need to align your portfolio with Trump’s moves, anticipate his counter-narratives, and hedge against the downside with tools like gold, and, yes, bitcoin.
But we’ll want to keep checking in with the plotline. Because in 2025, being on stage is the way to shape your results, not sitting in the audience.
~ Addison
p.s. Grey Swan Live! with Matt Milner airs Thursday, July 10 at 11 a.m. ET. With both private credit and private equity markets gaining pop trend status in the investment markets, we’ll dig deeper into Elon Musk’s SpaceX and xAI private placements — the next curveballs from the Trump arch-nemesis universe.
Your thoughts? Please send them here: addison@greyswanfraternity.com
