The year 2025 began with post-election optimism and expectations of a strong first quarter. Instead, markets were hit by the rise of low-cost AI initiatives from China, and its adverse impact on the U.S. Big Tech, Trump tariffs, sticky inflation, and persistently high interest rates. Stabilization in the market returned in the month of May after a tariff-led, turbulent April.Market euphoria started to solidify from midyear, thanks to easing trade tensions. There have been three Fed rate cuts this year, with ...

Group 1 - The current AI boom may be experiencing irrational exuberance, with concerns from industry leaders like Google CEO Sundar Pichai and OpenAI CEO Sam Altman about a potential bubble [4][5][9] - If the AI rally collapses, it could have catastrophic effects on the broader market, prompting investors to shift towards defensive dividend ETFs to mitigate risks [6] - The SPDR Dow Jones Industrial Average ETF Trust (DIA) offers exposure to 30 blue-chip U.S. stocks, which tend to perform better during downturns, especially if the downturn is related to non-blue-chip sectors like AI [7][9] Group 2 - Many ETF holdings are heavily weighted towards Nvidia and other large-cap tech stocks, creating overlapping exposure that increases risk if the AI rally falters [8] - The iShares International Select Dividend ETF (IDV) currently yields 4.58% and benefits from the dollar's 10.6% depreciation against the Euro year-to-date, making it an attractive option for investors [9]

Market Performance - Wall Street showed moderate performance in July, with SPDR S&P 500 ETF Trust (SPY) increasing by approximately 2.2%, SPDR Dow Jones Industrial Average ETF Trust (DIA) rising by about 0.1%, and Invesco QQQ Trust, Series 1 (QQQ) gaining around 2.4% [1] Earnings Reports - Microsoft and Meta reported strong earnings in July, while Amazon exceeded Q2 earnings and revenues but saw a decline in shares due to weak Q3 guidance. Apple shares, however, increased following its earnings report [1] U.S. Economic Indicators - The U.S. economy rebounded in Q2 2025 with a GDP growth rate of 3%, surpassing the forecast of 2.6% [2] - July jobs data revealed a nonfarm payroll increase of only 73,000, significantly below the expected 100,000, with prior months' figures revised downwards, indicating a prolonged labor market slowdown [3] Eurozone Economic Performance - Eurozone economic growth exceeded expectations, with GDP rising by 0.1% sequentially, driven by strong performances from Spain, France, and Ireland, despite contractions in Germany and Italy [4][5] U.S. Housing Market - New single-family home sales in the U.S. rose by just 0.6% to an annual rate of 627,000 units in June, falling short of the expected 650,000 units due to high mortgage rates [6] ETF Asset Flows - In July, significant asset inflows were noted in various ETFs, including Vanguard S&P 500 ETF (VOO) with $12.68 billion, SPDR S&P 500 ETF Trust (SPY) with $7.12 billion, and iShares Core S&P 500 ETF (IVV) with $5.65 billion [8] - Cryptocurrency ETFs also performed well, with iShares Bitcoin Trust ETF (IBIT) attracting about $5.31 billion and iShares Ethereum Trust ETF (ETHA) adding approximately $4.34 billion [9] - Financial Select Sector SPDR Fund (XLF) gained about $3.15 billion in assets due to positive earnings [10] - International markets saw inflows with Vanguard Total International Stock ETF (VXUS) and iShares Core MSCI Emerging Markets ETF (IEMG) adding about $2.44 billion and $2.35 billion, respectively [11] - Conversely, small-cap ETFs like iShares Russell 2000 ETF (IWM) experienced a decline of about $3.7 billion, while Vanguard Small Cap ETF (VB) lost approximately $126 billion [12] - Corporate bond ETFs underperformed, with iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and Vanguard Long-Term Corporate Bond ETF (VCLT) losing about $3.92 billion and $3.20 billion, respectively [13]

Market Performance - Wall Street showed moderate performance in July, with SPDR S&P 500 ETF Trust (SPY) increasing by approximately 2.2%, SPDR Dow Jones Industrial Average ETF Trust (DIA) rising by about 0.1%, and Invesco QQQ Trust, Series 1 (QQQ) gaining around 2.4% [1] - Notable earnings reports included strong performances from Microsoft and Meta, while Amazon exceeded Q2 earnings and revenues but faced a decline in shares due to weak Q3 guidance; Apple experienced a surge following its earnings report [1] U.S. Economic Indicators - The U.S. economy rebounded in Q2 2025, with GDP growing at an annualized rate of 3%, surpassing the forecasted 2.6% growth [2] - However, July jobs data revealed a disappointing increase of only 73,000 nonfarm payrolls, significantly below the expected 100,000, with prior months' figures revised downwards, indicating a prolonged labor market slowdown [3] Eurozone Economic Growth - Eurozone economic growth exceeded expectations in the last quarter, with GDP rising by 0.1% quarter on quarter, outperforming forecasts of no change [5] - Strong performances from Spain, France, and Ireland helped mitigate contractions in Germany and Italy, potentially reducing the need for further interest rate cuts by the European Central Bank [4][5] Housing Market - New U.S. single-family home sales saw a marginal increase of 0.6% in June, reaching a seasonally adjusted annual rate of 627,000 units, but fell short of the expected 650,000 units [6] Cryptocurrency Market - Ethereum experienced significant growth in July, with prices increasing by over 35%, driven by the signing of the GENIUS Act into law [7] - Invesco Galaxy Ethereum ETF (QETH) rose by 31.5% and 21Shares Core Ethereum ETF (CETH) increased by 36.2%, reflecting positive sentiment in the crypto market [7][8] Shipping Industry - Breakwave Dry Bulk Shipping ETF (BDRY) saw an increase of 25.8% as shipping stocks rebounded due to rising tensions on key trade routes, which pushed up freight rates, particularly for tankers [9][10] Semiconductor Sector - Chip stocks, particularly NVIDIA and AMD, showed strong performance, with AMD gaining 24.5% and benefiting from robust Data Center and Client revenues, while NVIDIA's stock rose 9% due to growth in artificial intelligence and high-performance computing [11][12] Cannabis Industry - Cannabis stocks rose in July, with AdvisorShares Pure US Cannabis ETF (MSOS) increasing by 27.3%, following indications that the President supports rescheduling cannabis, which could benefit veterans and scientific research [13]