S&P, Nasdaq hit record highs but signal overbought, bond investors flock to 30-year treasuries

• S&P and Nasdaq make new intraday highs, but they are both in overbot territory.
• Bonds investors go for the 30 yr.
• Earnings continue to beat, but reactions are muted.
• Oil down, Gold up, VIX is simmering.
• Try the Sausage and Peppers.

Stocks climbed but ended the day mixed. Both the S&P and Nasdaq hit fresh all-time highs — 6,336 and 21,077 — before pulling back slightly to close higher, but off those intraday peaks. The Dow lost 20 points, the S&P gained 9, the Nasdaq added 78, the Russell gave back 9, the Transports lost 21, and the Equal Weight S&P slipped 25 points. Meanwhile, the Magnificent 7 kept marching higher — up another 200 points, or 0.7% on the day.

We’re at the start of a big earnings week. Of the seven companies that reported yesterday (CLF, DPZ, VZ, ROP, CCK, ARE, MEDP), only DPZ missed — that’s an 86% beat rate, which brings the season’s overall rate to 79% so far. Not too shabby.

This morning we’ve already heard from GM, DHI, DHR, SYF, and CRCL — all beats. Still to come around 20 more names including LMT, RTX, HAL, PHM, NOC, THC, and KO. These are big players, and investors will be listening closely to what they say about the outlook.

Energy was the worst-performing sector yesterday — XLE fell 1% as oil prices came under more pressure ahead of the looming August 1st trade/tariff deadline. Scotty, Jamieson, and Howie are in another round of intense negotiations with the EU, trying to avoid the threatened 30% tariffs set to hit next Friday.

Other sectors in the red: Healthcare -0.6%, Industrials -0.5%, and Financials -0.3%. Consumer Staples ended flat. On the plus side, we saw strength in:

Communications +1.4% (helped by VZ, up 4% on earnings), Basic Materials +0.6%, Consumer Discretionary +0.5%, Utilities +0.3%, Real Estate +0.4%.

Over in bonds — they rallied. TLT was up 0.9%, TLH +0.7%, and AGG +0.3%. Money flowed into the long end of the curve — think 30-year bonds — which suggests investors are positioning for slower economic growth or lower inflation. Just a reminder: this asset class is driven by institutions like pension funds, insurance companies, banks, and sovereign wealth funds. Retail investors don’t typically buy 30-years directly — exposure is usually through mutual funds or ETFs. Yesterday, the 30-year yield fell 4 bps to end at 4.95%.

Oil ended down 0.4% at $67.07, and this morning it’s off another 70 cents at $66.50 — now below trendline support. Nervousness is building ahead of that tariff deadline, and with OPEC+ set to increase production in August, there’s more pressure on prices. If we break $64.25, the next stop is $60. That said — let’s not forget, demand remains strong, even if sentiment is shaky.

Gold surged $52 or 1.6% to close at $3,416 as tariff angst builds. That, plus a market that feels a bit toppy, is pushing investors toward the safety trade. Gold is holding above trendline support at $3,344 — and remember what I said yesterday: “If you draw a triangle from April’s highs and lows, we’re right at the apex.” Well, we broke out of the apex and rallied. This morning, gold is giving back $9 but remains above that breakout point. The June high at $3,470 remains in play.

VIX ticked up 1.4% yesterday and is up another 1.75% this morning. It’s still below key trendlines, but all it takes is one negative headline to change the mood. This plays into my recent thesis: the market feels toppy. Patience is a virtue.

U.S. futures are flat. Dow +2, S&P -4, Nasdaq -42, Russell -4. No surprises here. S&P is clinging to all-time highs and hugging the 70 lines on the RSI scale. Meanwhile, the Nasdaq and the Mag 7 indexes are officially overbought — their RSIs are 74.7 and 73.5 respectively. That tells me: sit back, don’t chase. Let the market come to you.

TSLA and GOOG report tomorrow after the bell — kicking off the tech-heavy portion of earnings season.

Eco data today: Philly Fed Non-Manufacturing Index (services), Richmond Fed Manufacturing Index (expected: -2).

Over in Europe, markets are mixed to lower. The UK is up, but Eurozone stocks are under pressure — thank the tariff talks. No deal yet, but negotiations continue. There’s chatter that the EU might invoke their “nuclear option” — the Anti-Coercion Instrument (ACI), a.k.a. the Trade Bazooka. It would restrict U.S. access to EU markets, impose export/import restrictions, and limit foreign direct investment. It’s a last-resort weapon, designed to deter economic coercion — which, right now, is spelled T-R-U-M-P.

The S&P closed at 6,305, up 9 points. We tagged that 6,336 intraday high before pulling back. This morning’s action suggests the market is tired. That pullback I’ve been calling for feels closer. I'm still in the camp, which says: be patient. Keep new money in a government money market fund (earning 4.25%) and wait for more clarity as we approach August 1st.

Want to talk about strategy?

Sweet sausage with peppers and onions

This is a classic — simple to make, full of flavor, and perfect for feeding a crowd on the weekend. Whether you’re making subs or serving it up appetizer-style, it’s always a hit.

Here’s what you’ll need: Italian sweet sausages, red, green, and yellow bell peppers (sliced), Yellow onions (sliced), Garlic (a couple of cloves, smashed), s&p, Olive oil, Fresh Italian sub rolls (if making sandwiches).

Preheat your grill to high.

In a large sauté pan, heat some olive oil over medium-high heat. Add the smashed garlic cloves and sauté until fragrant — careful not to burn them.

Toss in the sliced onions and let them soften for a few minutes. Then add the sliced peppers, season with salt and pepper, cover the pan, and reduce the heat to medium. Let it all cook down until soft and sweet.

Meanwhile, grill the sausages — get a nice char on the outside, but don’t let the flames scorch them. Once they’re browned and cooked through, pull them off the grill and set aside.

Now comes the fun part!

In a large aluminum pan (great for serving and cleanup), you’ve got two options:

Option 1: Leave the sausages whole, nestle them in the pan, and cover them with the sautéed peppers and onions. Cover with foil and keep warm in the oven until ready to serve.

Option 2: Slice the sausages into bite-sized pieces, toss them into the pan, and spoon the peppers and onions over the top. This is a great option if you’re serving them buffet-style or as a hearty appetizer.

Making sandwiches? Just grab a warm Italian roll, load it up, and enjoy.