Monthly Market Debrief

Market Snapshot

July was yet another great month in the stock market. “Concepts of a plan” were announced for some of our biggest trading partners including the EU, Japan, and South Korea. A 15% tariff became the standard, and investors responded by buying everything they could. However, trade deals with China, Mexico, and Canada (our three biggest partners) have yet to be finalized.

The deals are far from set as lawsuits questioning Trump’s authority place tariffs work their way through the courts. In the near future, I will break down the tariffs as they exist. In the meantime, we all continue to watch the CPI data to see if feared “tariff inflation” hits the numbers. So far, it’s not looking good. 

*The job report, massive revision, and subsequent firing of the Head of Bureau of Labor Statistics occurred on August 1st. So I can’t talk about it right now, but rest assured, I have thoughts, @ me if you want my thoughts early. $3. 

Company Highlight - Generac

While NVIDIA and Microsoft are busy breaking the $4 trillion barrier, Generac quietly surged its way to a “Most Improved Stock” in the S&P 500 last month. So what powered this generator company’s rise?

Generac posted 6% year-over-year sales growth with equal voltage across both its residential and commercial divisions. Even better, net income sparked 18%, meaning the company grew both revenue and profitability. Both reports beat analyst expectations which led to a strong wave of investors buying up the stock.

The stock held on to its gains through July and into August, defying the S&P 500 trend. This report delivered the jolt Generac needed after an April 9th low of $99.50 or -36.8% YTD at the time.

Generac manufactures its engines across the globe in China, Vietnam, Taiwan, India, Canada, Mexico, and the United States. There’s no easy escape from the tariffs as Generac’s US plants still import significant raw materials from Canada and China.

The TACO trade started to bring the stock back from the pits of “liberation day,” and their 2nd quarter earnings report was the lightning bolt straight to the heart. 

It is refreshing to see a U.S. company making real, physical products shine, especially as we get lost in the tech bubble that may or may not exist. Ignore the fact that Generac makes devices that help you keep using your tech during blackouts… What’s good for them is good for everyone?

Debrief on Deck

Next Week, we will talk about the rise of “buy now pay later.” As fewer young Americans buy homes, well-intentioned capitalists found a way to ensure everyone could still enjoy the thrill of borrowing money. This time, it’s for a Chipotle Burrito. The American Dream isn’t dead, it has evolved.