A Celebration of Independence: The 4th of July
The 4th of July marks the birth of our nation—an annual celebration of freedom, opportunity, and unity. It reminds us of the sacrifices made for liberty and the strength in our shared values. Gather with family and friends, enjoy the fireworks, and reflect on what makes America great.
“America, sweet America. You know, God done shed His grace on thee…” — America the Beautiful, Ray Charles
Stocks Keep Soaring
Since the holiday, bond yields have fallen and the stock market has surged. Notably:
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10-year Treasuries sit near 4.40%, up from 4.35% on July 3.
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U.S. stocks hit fresh highs, backed by Goldman Sachs raising its S&P 500 targets to 6,900 over 12 months and now forecasting a 3% gain over the next three months.
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The S&P edged slightly lower Tuesday amid rising bond yields tied to fresh tariffs on Japan, South Korea, and other nations.
So yeah—stocks are riding high, but bonds are getting jittery with yield volatility and some downward pressure in hopes of eventual Fed rate cuts.
Keeping an Eye on the 4.20% Level
Last week’s bond rally nudged the 10-year yield down to 4.30%—about 10 bps under the July 2 level. But Tuesday’s tariff headlines pushed it back to 4.40%. The key threshold remains 4.20%. If Treasury yields drop and hold below that, mortgage rates may follow—otherwise, we could see more volatility.
The Fed, Tariffs & Powell
Powell is under fire for holding rates steady despite disinflation and lower energy costs, citing uncertainties around tariffs. With the current 90-day tariff pause ending tomorrow (July 9), the July 9–August 1 window could hold legit inflation implications. And don’t forget—the upcoming release of the June Fed minutes will provide clues into rate cut timing.
Job Market Still Strong
May job openings surprised to the upside, and weekly unemployment claims remain low. No major shift in layoffs or hiring—but now with the bill passing Congress, clarity on taxes and regs could push hiring direction in coming months.
Mortgage Rates Snapshot
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30-year fixed averaged 6.69% as of July 2, down from 6.77% last week.
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With 10-year yields at ~4.40%, there’s still room for rates to improve—if yields fall below 4.20%.
What’s Ahead
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Tomorrow: Fed minutes release—will give insight into rate cut timing.
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Post–Tariff Deadline (July 9): Watch impact on yields/inflation.
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Broader Outlook: Goldman sees stocks marching higher as long as rate cuts start and EPS growth holds up. Still, lurking risks include tariff flare-ups, sticky inflation, and shifts in bond-buying sentiment.
Bottom Line
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Stock market strong, riding bullish forecasts and earnings optimism.
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Bond market volatile—yields near 4.40%, keep an eye on the 4.20% level.
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Mortgage pros & homeowners: follow Treasury moves closely—rates hinge on yields staying below 4.20%.
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Federal policy and tariffs are trust-factor; triangles to follow include Fed minutes and post-tariff price impacts.
Mortgage Market Guide Candlestick Chart
Last week, the bond market threw up a bearish technical signal—specifically, a bearish engulfing pattern—and it’s been weighing on sentiment ever since.
If you’re not familiar with the term, it comes from Japanese candlestick charting (yes, the method developed by rice traders centuries ago). Here’s the gist: bond prices opened strong on Tuesday of last week—rates dropped early in the day—but by the close, prices had slipped below Monday’s level, forming a candlestick that “engulfed” the prior day.
That matters because:
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It showed up at the tail end of a strong rally, and
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Right near a key ceiling for bond prices.
In technical terms, that’s a classic reversal signal—a sign that the rally may be running out of steam.
What we’ve seen since then:
Bonds haven’t been able to punch back above that key level yet, and as a result, rate improvement has stalled. Unless bond prices can regain that ground and push higher, we may be in for some sideways or even upward movement in rates in the near term.
Keep an eye on the charts—and stay nimble.
Chart: Fannie Mae 30-Year 5.5% Coupon (Friday, July 4th, 2025)
