MacroEdge Redeye: A Drive By Look at the Rest of the July - Our 2025 Roadmap Up Next, Thoughts, LT Technical Look

The rest of July is about to fly by. Are you ready?

Tonight’s Redeye will be a short combination of general market thoughts, a quick look at the technicals behind markets currently, and a runway to tomorrow’s Roadmap update.

We look forward to discussing the Roadmap more in-depth tomorrow as well as resuming plans for migrating our Substack base over to our own platform at MacroEdge.net. If you haven’t yet joined MacroEdge Ozone - you can access for two weeks at MacroEdge.net/ozone for two-week access to our equity research desk, data, and more.

We’re stuck in a revolving-door world of news, obsession over short-term trends, a complete dismissal of history, and a time when people lacking basic knowledge have huge platforms. While many of these aren’t new phenomena - as we’ve seen throughout history - it seems this merry-go-round is moving faster than ever. Maybe that’s why it is already the end of July and this year keeps on flying by. Maybe it’s just a new type of inception. The rest of July - is most certainly about to fly by. Trends like rising unemployment are things that we continue to watch with utmost focus here at MacroEdge - because employment is what drives the entire economic machine in the United States (as a consumer economy). We (and I) do not believe that the Federal Reserve is an all-powerful organization that has wizard-like powers over its singular policy instrument tool (the Federal Funds Rate) to thread a needle on whatever type of landing it is trying to achieve. We’ve discussed at length why it’s not like 95 in a post a few weeks back, and why the markets are also much more likely near a longer-term peak, rather than a continuation, based on current internals - then the mid-90s well.

We’ve seen job cuts remain elevated this month on a run rate of around 82,000 thus far this month - which is high for July - along with elevated business bankruptcies (mixture of both 7/11 is elevated). Retailers like Conn’s are shutting down and big box stores like Big Lots are closing 150+ locations amid the impacts of inflation on their middle and lower class consumer base. The 10-year/2-year curve is finally approaching a normalized 0 level, and the FOMC announcement here in the next few days may be the event that starts to accelerate the drop in the forward end of the curve. Is anyone really paying that much attention to these things - not outside of the internet financial community and those who are tuned into CNBC.

In the next 5 days, we’re likely to see the FOMC hold rates at 525-550bps, with the employment data following later in the week. Today’s PCE came in line, providing the Fed with a broader runway to begin lowering rates at the September meeting (priced at about 95% chance) versus the pricing of 5% roughly for July. The July cut chance is underpriced in my opinion - although this is another lagging decision being made by the Fed since they will be basing the September decision on 2 months of employment data (July/Sep) if they choose to wait, which looks likely.

So why does any of this matter? Well, in a world obsessed with short: short videos and reels, short news stories, short-term 2-minute candle charts to ‘day trade’, and a short-term view at the broader economy - we’re not focused on the short. In the short-term markets and the broader market will likely bounce or see bounces, as has been the case for the last 2 years, although that doesn’t mean we cannot apply context and benefit substantially from that event (which is what we’ve started to prepare for through MacroEdge Vision.) A lower high being made in the next several weeks would be another notable feature in the current market structure. So plenty that we’ll be eyeing.

Longer-term technical measurements matter a lot more than shorter-term CNBC noise (paying attention to these trends is important, approaching a time of rate cuts and higher volatility post-cuts as we’ve discussed). These cannot be taken as a single indicator, but rather for context on very large time frames for those dismissing current technicals and valuations.

We can also view this another way (as one tool to position for future opportunity when it arises):

After all, and in summary, this is what will matter most to the United States and global economy:

Does this historical and current trend look like 95? I think not. Maybe Powell was put here to reinvent the wheel.

We’ll have a lot more to talk about tomorrow and in the Sunday evening weekly Ozone research report.

See you there.

Don & MacroEdge Team