We saw a fantastic week for the stock market. The S&P 500 and Nasdaq hit record highs on June 27, 2025, with the S&P 500 closing at 6,173, up 3.32% for the week, and the Nasdaq closed at 20273.46, up 4.36%. The Dow gained 2.6%. Stocks rallied due to easing Middle East tensions, trade deal optimism with China (Trump said deal was signed - framework), and expectations of Federal Reserve rate cuts. There were 211 new small-cap stocks added to the Russell 2000 Index on June 27, 2025 which will start trading in Russell index starting tomorrow, Jun 30.
A glance to the Economic Report last week
The Manufacturing PMI index came at 52 vs.51 expected. The Services PMI came at 53.1 vs. 53 expected. All comfortably above 50, signaling ongoing expansion in U.S. economic activity. The economy remains on solid footing.
The Consumer Confidence Index for June 2025 was released on Tuesday, June 24, 2025. It dropped to 93.0 from 98.4 in May, below the expected 99.4.
Personal Consumption Expenditure (PCE): The Fed's preferred inflation gauge came at 2.7%, vs. 2.6% expected. This is a small increase and nothing alarming.
Rate Cuts possibility: Some of the Fed Governors said a rate cut could come as soon as July. Jerome Powell also said during its congressional testimony that many Fed members are leaning towards interest rate cuts. Many analysts are projecting about 3 cuts this year and 2 cuts next year. We will see if rate cuts come in July or September. More on my next blog..
Consumer Confidence in June fell to 93.0 vs. 99.8 expected. It does not worry me because I am 99% sure that it came low due to Israel vs. Iran war and U.S involvement which scared mot of folks.
My Top FOUR Stock Picks
Thanks to all the WhatApp group members who voted on the poll yesterday. Here is my top four stock picks. You can see the results in the WhatsApp group, but NVDA and META are two top stocks voted followed by Google and AVGO.
Nvidia (NVDA): AI is the name of the game and it's going to continue for a many more years. That does not mean, stock will go up for ever. But this is the King/Sahensha of AI. This is still one cheap AI stock visualizing its fundamentals and future potential.
Facebook (META): Other than Facebook, Instagram, the company is investing heavily on AI, monetizing WhatsApp, its AI model LIama will likely prioritize advertising/marketing and the generic model can be used by any company in future for marketing need.
Tesla (TSLA) launched its Robotaxi service in Austin last Sunday. Also, in another major development, Tesla Model Y drove itself to deliver the car to the customer. This is the first time in the World that the car drove itself to a customer without any driver :):. As I said on my WhatsApp group, this is where Tesla and autonomous driving is heading in the future. I will write some of the future Catalysts why Tesla becomes one of my top pick for the long term investor in my next blog. If the time horizon is 2-3 years, then it may potentially be one of my top 1 or 2 pick.
BroadCom (AVGO): Demand for Broadcom's custom AI accelerators (XPUs) and AI networking solutions, The acquisition of VMware has bolstered Broadcom's software business. Its collaborations with companies like Google and Meta for custom AI chip development and strong partner base is a major catalyst.
One stock that lots of my WhatsApp group members voted high is number but not on my top pick is Google. Reason: The company failed in many AI demos and that has deterred the confidence of Wall Street despite reasonable earnings and revenue growth. Secondly, now that ChatGPT, MS Copilot and Grok are being used by lots of folks rather than searching in Google, Wall Street is little apprehensive on how it would impact its earnings. Pls note that Google generates around 77% of its revenue from advertisement. This is one of the stock on my blog portfolio, but I will wait until Wall Street is excited, till then I will not add to other this stock.
Note: Some of you may be looking for other better stocks not on the list. I know there are many more goos stock but please note that I can only give a handful for pooling.
Big Beautiful Bill
Discussion is going on in Senate. It was approved to proceed for discussion in Senate. As I write this, it's been debated in the Senate. One part of the bill which I do not like is giving subsidies to the industries of the past but not to the future of power generations like Solar, Wind etc. It should be forward looking not backward looking. The bill is planned to be sent to Trump on the week of July 4th. But I don’t think it could materialize before that.
Economic News this week
TUE, July 1: ISM manufacturing
WED, July 2: ADP Employment Report
THU, July 3: U.S. employment report
What to expect this week
Well, it's difficult to predict the market but I think we have solid momentum for the market, particularly AI related stocks, and I expect it to continue. But we should not be surprised with any small pullback. Those may be the buying opportunity. If one is not invested, it's worth re-thinking.
Stocks to Watch this week
META, NVDA, AVGO, NFLX, QQQ, SOXL, CRWV, HOOD, ARM, FAS
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