Top Pros' Top Picks 07/23/25

Market Minute ⏱️ 7/23/25: Stocks Rip on Japan Deal

Mike Larson | Editor-in-Chief

Stocks are ripping again after a strong rally in the past month. Gold and silver are mixed, crude oil is lower, and Treasuries and the dollar are flattish.

The US and Japan just managed to close a trade deal after weeks of negotiating. Japan will pay 15% tariffs moving forward, rather than 25%. That rate will further apply to other products that were previously targeted with a higher, export-specific levy. Japan will also set up a $550 billion fund for investments in the US and ease auto import restrictions that kept US carmakers from competing as effectively in the Japanese market.

Separately, the US announced deals with Indonesia and the Philippines. Those would set tariff rates at 19%, while also easing restrictions on imports of US agricultural products and other goods. All told, the deals reinforced Wall Street’s optimism that worst-case scenarios on trade won’t play out – a key reason stocks have risen to record highs. ETFs that track stocks in Indonesia and the Philippines have underperformed the SPDR S&P 500 ETF (SPY), while the iShares MSCI Japan ETF (EWJ) has slightly outperformed.

EWJ, EIDO, EPHE, SPY (YTD % Change)

Will massive investments in Artificial Intelligence (AI) pay off? That’s what investors are waiting to see when Alphabet Inc. (GOOGL) reports earnings after the bell today. Analysts expect the Google parent to earn $2.17 per share after adjustments, up almost 12% year-over-year. The firm is spending a whopping $75 billion on AI investments to power things like its Gemini AI models.

Finally, “Meme Stock Mania” is back in a big way. Yesterday it was shares of beaten-down retailer Kohl’s Corp. (KSS) that rocketed 37% on aggressive trading by retail investors. Today, Krispy Kreme Inc. (DNUT) and GoPro Inc. (GPRO) are rising sharply in early trading. Other heavily shorted stocks like Beyond Meat Inc. (BYND) and 1-800-Flowers.com (FLWS) are climbing, too.

The action is reminiscent of what happened during the Covid-19 pandemic. Back then, traders zeroed in on struggling stocks in an effort to squeeze short-sellers and drive their share prices through the roof. The trend eventually flamed out as markets and the economy got back to normal.

Newsome: How You Should Approach Gaps When Trading This Market

• The Fed, Gold, and the US Dollar: Where Things Stand
  👉️ TICKER: GLD, UDN, SPX

  The next couple of weeks will certainly be interesting. The Federal Open Market Committee (FOMC) will decide on whether to lower the federal funds rate (FFR) on July 30. Then on Aug. 1, the US will impose reciprocal tariffs on goods imported from America's trading partners, observes Ed Yardeni, editor of Yardeni QuickTakes.

• FDS: Fiscal Q3 Estimates Missed, But Longer-Term Growth on Track
  👉️ TICKER: FDS
  FactSet Research Systems Inc. (FDS) shares edged up despite missing consensus estimates. For the third fiscal quarter ended May 31, EPS fell 4% on a 6% revenue increase. Organic revenue gained 4.4%, highlights Doug Gerlach, editor of Investor Advisory Service.

☀️📈 Get year-end picks and strategies at the 2025 MoneyShow/TradersEXPO Orlando (Oct. 16-18). Registration is now OPEN!