Proflex Market Update - Wk 30
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All Eyes on Earnings | Fed Signals Awaited | Bitcoin Holds Steady

Markets made new all-time highs last week, with the S&P 500 briefly pushing above 6,320. But the tone remains undecided—chop, not conviction. With earnings season heating up and multiple macro catalysts on deck, the next two weeks will likely dictate the rest-of-year trajectory.

While monetary signals remain supportive—rising M2, softening global policy, and still-positive ETF flows into hard assets—equity valuations now rest on fragile foundations.

The rally now hinges on two parallel pivots:

1. Tech Earnings — Whether the AI trade continues to justify its premium.
2. Fed Commentary — What Powell signals about the rest of 2025.

Meanwhile, geopolitical overhangs remain. Trump’s aggressive August 1 tariff deadline is fast approaching. And over the weekend, Japan’s ruling coalition lost majority control, leading to volatility in JGB yields and Yen carry trades—adding a new global tail risk to already jittery FX markets.

Insights from the Proflex Macro Call

“All-Time Highs Are the Beginning, Not the End.”​
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One of the most overlooked insights this week: markets breaking all-time highs typically lead to 10–15% run-ups—not corrections.​
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The reflex to sell into highs is deeply psychological, but history shows it’s usually the start of a structural move, not the end.

This time is no different. With global M2 rising and cross-asset highs in stocks, gold, and Bitcoin, the macro setup suggests it’s liquidity—not valuations—fueling the rally.
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​Unless earnings or AI leadership cracks, the bull case holds.​
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You can watch the recording of the full weekly discussion here:

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Key Drivers This Week

💻 Tech Earnings Hold the Key to S&P’s Premium

The AI narrative has carried the S&P to stretched valuations (~22x forward), but now the real test begins:

This week:

• July 22: Texas Instruments (TXN)
• July 23: Alphabet (GOOGL), Tesla (TSLA)
• July 24: Microsoft (MSFT), Intel (INTC)

The top 10 tech names now account for ~35% of the S&P’s market cap. That means a single earnings miss can derail the index—even if fundamentals elsewhere stay intact.

🧭 Fed Meeting – The Global Policy Chessboard Tightens

The upcoming FOMC meeting (July 29–30) is arguably more important than any single data point.

Why?

The Fed is now an outlier.

• ECB has already cut.
• UK is softening.
• India is expected to ease.
• China is stimulating.

Yet U.S. futures are still pricing no cut in July, despite growing pressure from the Trump camp to ease and rising political incentives ahead of the election cycle.
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Fed Fund Futures:

• 🏦 July Cut: 7% probability
• 🏦 September Cut: 60%+
• 🏦 December: Fully priced in second cut

Fed commentary, not policy, will shape expectations for the back half of the year.

💥 Geopolitics: Tariffs and the Yen Risk Flash

Two undercurrents could rapidly ripple into markets:

1. Tariff Deadline (Aug 1)

• The Trump-led tariff escalation is set to go live by August 1.
• The new rates target 30+ countries, ranging from 20%–50%.
• Investors should prepare for headline volatility, especially across EM and cyclical exporters.

2. Japan's Coalition Loss

• Over the weekend, Japan’s ruling party lost its majority in the upper house, threatening policy continuity.
• Yields on 10Y JGBs are at multi-decade highs, straining Yen carry trades.
• A sharp unwind could ripple into FX funding markets, especially those leveraged into U.S. tech and EM carry trades.

💰 Bitcoin — Institutional Flows Keep Driving Conviction

Bitcoin continues its steady grind higher, closing the week at $120K. This isn’t froth—it’s structured capital.

• Spot ETF inflows in 2025 have topped $14.4B, with AUM now nearing $150B
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• Corporate holdings now account for ~3% of total supply, led by treasury allocations and balance sheet optimization
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• BlackRock alone brought in $14.1B in Q2, underscoring crypto’s shift from fringe to formal

As long as M2 expands and real yields compress, Bitcoin will remain the high-conviction play.

👉 Want to learn how to invest in BTC with hedged upside exposure and controlled risk?

🧭 Proflex Playbook – Liquidity is Here, Earnings Are Next

We are at a critical inflection point. The market isn’t breaking down—but it’s looking for a story strong enough to carry it higher.

So what’s our move?

Our stance stays anchored in the data:

✅ Stay Long Hard Assets — Bitcoin, gold, and silver have front-run policy
✅ Trade Equities Tactically — Let earnings decide who earns the premium
✅ Hedge for Volatility — Tariffs + Fed + FX = high optionality zone
✅ Monitor Japan Closely — Rising JGB yields can disrupt global liquidity flows
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If you're an All-Access or Managed Portfolio subscriber, our positioning has already shifted ahead of this moment—scaling up asymmetric hard asset plays while hedging for earnings volatility and geopolitical tail risks.

📣 Join the Macro WhatsApp Group for weekly calls, market insight, and real-time macro signals.

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Until next week,

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— The Proflex Team
​ Trusted Macro Insights. Calm Investing. Tactical Trades.

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