Market Looks to Bessent as July 4 Mega Bill Deadline Looms

With the Fed in the midst of its latest pre-policy meeting quiet period, the factors driving the market on Tuesday will be the rapid-fire pace of quarterly earnings and developments on the trade and policy front from the White House.

In keeping with those forces, we will want to revisit equity futures closer to the opening bell as investors digest downside guidance issued this morning from Polaris Industries PII, Hilton HLT, Volvo Cars VLVOF, Electrolux and others, as well as pulled guidance from NXP Semiconductors NXPI on Monday night and UPS UPS and General Motors GM on Tuesday morning.

As of this writing, we have yet to hear from the likes of Coca-Cola KO, Corning GLW, JetBlue JBLU, Sherwin Williams SHW, SoFi Technologies SOFI and Smithfield Foods SFD. As those results and others pour in, we will look to connect what we learn back to the market and the Portfolio. We will also keep an eye on how the market is poised to begin trading later on Tuesday morning.

Factoring into that thinking will be what is learned from Tuesday morning’s 8:30 a.m. ET White House briefing that will include Treasury Secretary Scott Bessent. Recent comments from Bessent point to potential trade deals with India and Japan, while others indicate a long road to a trade deal with China. At the same time, stern comments on Monday from Chinese Foreign Minister Wang Yi that appeasement will only embolden the “bully” diminish the prospects for a quick trade deal with China.

We could also see Bessent discuss more of President Trump’s economic agenda and its reported Fourth of July soft deadline. The “megabit” includes trade, a multi-trillion tax cut package and deregulation, which seems like a tall order with Senate Majority Leader John Thune calling the deadline “aspirational.” House Speaker Mike Johnson has set an end-of-May goal for the House to pass legislation that includes a renewal of Trump’s first-term cuts and a fresh round of levy reductions, partly paid for by curbing federal spending. Our sense is that the timing is aggressive, but we also recognize Trump needs to put some wins on the board.

We’ll know more after Tuesday morning’s White House briefing.

Barring any meaningful developments on trade deals and tariffs, we continue to suspect that we will see more companies issue guidance that falls short of market expectations. We could even see more pull their outlook altogether. While we are not ones to pat ourselves on the back much if ever, we will say the earnings season so far is playing out largely as we expected.

That also means reaffirming data points from the likes of Amazon AMZN, Nvidia NVDA and Alphabet GOOGL confirming demand for AI and data center chips remains strong. Earnings from SAP SE SAP and ServiceNow NOW confirm that AI adoption is accelerating. We continue to read of fresh cyber attacks and cybersecurity companies embracing AI to fend off bad actors while consumers feel the pinch of economic uncertainty and inflation.

Those and other signals keep us bullish on the Portfolio’s holdings, and we continue to look for fresh meat for the Bullpen. Coming up, our initial look at quarterly results from Waste Management WM and Labcorp LH ahead of their respective morning conference calls.

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At the time of publication, TheStreet Pro Portfolio was long AMZN, NVDA, GOOGL, NOW, WM and LH.