10 Things You Need to Know – The Next Megatrend?

August 1, 2025
/ By Michael Comeau

We closed out an über-busy week highlighted by record stock prices, huge tech earnings beats, one of the wildest IPOs in history, and an awful jobs report.

And oh yeah, President Trump announced a whole bunch of tariffs and renewed his attack on Fed Chair Jerome Powell.

So it's time to break down the 10 things you need to know – including the possible next market megatrend (#4 below)

1. The Ultimate Trump Trade Gets Tested

For months, the market was dominated by what we call “The Ultimate Trump Trade,” which was a group of stocks benefiting from:

Higher stock, options, and crypto volumes
Higher market volatility with higher prices
President Trump generating market-moving news multiple times a week
Lower regulation

Some of the names we included are Robinhood (HOOD), Interactive Brokers (IBKR), Schwab (SCHW), and Webull (BULL).

Now these stocks are being tested – which could be a bad omen for the bulls.

We'd keep a close eye on Robinhood since it's the flagship of the crew.

It had a furious bounce off the Friday morning lows:

If it keeps extending, this market may not be done.

2. Rate Cut Odds Collapsed… and Then They Spiked.

On Thursday, traders were pricing in a mere 39% chance of a September rate cut, according to the CME's FedWatch tool.

This was down from 52.4% yesterday, and 75.4% a month ago.

But after Friday's messy nonfarm payrolls report, which included major downward revisions for May and June, things changed fast.

As of 9:30 am ET Friday, traders were pricing in a 75.5% chance of a September rate cut:

3. “Low Quality” Stocks Got Destroyed

On Friday afternoon, we ran one of our favorite stock scans, looking for names with:

Market cap above $2.5 billion
Revenues under $100 million

In recent weeks, these names were up huge.

This week, they got absolutely smoked, with just 2 in positive territory:

This is a who's who of stars in speculative sectors like quantum computing (IONQ, RGTI) AI (PONY), crypto (BMNR), and drones (JOBY).

4. Utilities Could Be the Next Megatrend

Utilities stocks should be on your radar.

Because if rates go down because of economic weakness, utilities could have 3 separate catalysts:

The rate cuts themselves, because lower rates are good for utilities stocks
A flight to safety
AI driving higher electricity demand

As you can see, the Utilities Select Sector SPDR Fund (XLU) is crushing SPY this year:

Don't ignore this potential megatrend.

5. Meta (META) Is the Heavyweight Earnings Champion

On Wednesday, after the close, Meta beat earnings estimates by 21.8%.

This was its 10th straight earnings beat, and it's 4th straight double-digit beat.

But how did the stock follow through during this epic winning streak?

We looked at META's stock price performance after the previous 9 earnings beats.

30 days later, the stock was higher 7 of 9 times, with an average return of +9.9%.

Impressive!

Speaking of earnings…

6. Earnings Season Has Been Solid

On July 25, FactSet reported that 80% of companies are beating expectations during Q2 earnings season.

At the start of earnings season, analysts predicted 4.9% earnings growth.

But as of Tuesday, earnings were tracking towards 6.4% growth.

And that was before earnings beats from Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), Meta (META), and Qualcomm (QCOM).

This is exactly what we saw last quarter – low expectations, and companies jumping over easier hurdles.

Yes, the economy is showing cracks, but by and large, big companies are hanging in there just fine.

7. Sentiment Was Tracking Bullish

On Wednesday, the AAII Sentiment Survey showed that 40.3% of investors are bullish, up from 36.8% last week.

So we've had bullish readings for 4 of the past 5 weeks.

Before this streak, there was not a bullish reading since January 30.

The change is no shocker, because nothing improves the mood like higher prices.

That said, the sloppy Friday action should push sentiment numbers lower.

8. Figma Is a Modern Momentum Marvel

Design software maker Figma (FIG) came public Thursday and it was a doozy.

The deal priced at $33.

The stock opened for trading at $85.

It closed at $115.50.

And then it hit $150 after hours.

It's come off the highs Friday, but it's still up on the day as of early afternooon! Even with all sorts of speculative stocks getting spanked.

Wild Stuff.

9. Next Week Will Be Big for AI

The AI trade went back into full swing as of late because of heavy capex plans from the likes of Alphabet (GOOGL), Meta Platforms (META), and Amazon (AMZN).

But the fun isn't over, because we have 4 key AI names reporting next week: