Will The Market Breakout This Range?

* Analyzing the markets with Richie Naso, a Wall Street veteran of over 40 years and former member of the NYSE.

DJIA 52-wk: +7.81% | YTD: -0.79% | Wkly: +0.02%
S&P 500 52-wk: +9.21% | YTD: +1.47% | Wkly: -0.15%
NASDAQ 52-wk: +9.94% | YTD: +0.71% | Wkly: +0.21%
Technology Select Sector SPDR ETF 52-wk: +5.31% | YTD: +3.45% | Wkly: +0.57%

Index Performance

• S&P 500 fell ~0.2% on the week, closing at 5,967–5,968 range. (wsj.com)
• Dow Jones ended flat to slightly positive, gaining ~35 points, closing near 42,206–42,207. (en.wikipedia.org)
• Nasdaq Composite dropped around 0.5%–0.6%, finishing near 19,447. (apnews.com)

Sector & Stock Highlights

• Defensive and staples stocks outperformed:
• Kroger surged nearly 10% after beating earnings and raising forecasts. (wsj.com)
• CarMax rose ~6.6% on strong profit results. (investopedia.com)
• Accenture dropped ~6.9% following weak bookings. (investopedia.com)
• Tech & semiconductors gained during the month, led by Micron, AMD, and Nvidia optimism. (marketwatch.com)
• Tesla was also in focus ahead of its Austin robotaxi launch, ending the week slightly down (~−1%). (investors.com)

Macroeconomic & Geopolitical Drivers

• Israel‑Iran tensions weighed on markets early in the week, pushing oil prices higher and increasing volatility. (investors.com)
• President Trump’s decision to defer U.S. military action in Iran eased risk sentiment by week’s end. (wsj.com)
• Fed commentary:
• Fed held rates steady midweek, but Chair Powell’s hawkish tone—emphasizing inflation and tariffs—created caution. (wsj.com)
• Still, Governor Waller suggested a rate cut may come in July, helping calm markets. (wsj.com)

Other Notables

• The U.S. dollar rebounded (~+0.7%) as global uncertainty persisted. (wsj.com)
• Oil cooled off by week’s close after Trump’s de-escalation comments, splitting volatility around $74–77/barrel. (edwardjones.com)
• Treasury yields: 10-year remained around 4.37%, with slight weekly movement. (apnews.com)

Great — here's a quick forecast and sector deep dive for the week of June 24–28, 2025, based on current trends, sentiment, and macroeconomic indicators:

Expect a cautious upside bias, unless geopolitical tensions resurface.

 Key Drivers to Watch:

• Factor: Fed Commentary (Waller, Daly speaking)
  Market Impact: May clarify timing for rate cuts (possibly July)
• Factor: Inflation Reports (PCE due Friday 6/28)
  Market Impact: Markets will react sharply if core PCE deviates
• Factor: Q2 Earnings Season Prep
  Market Impact: Pre-announcements from tech & retail may start trickling in
• Factor: Israel-Iran Tensions
  Market Impact: Could reignite oil and volatility risk
• Factor: U.S. Election Speculation
  Market Impact: Policy-sensitive sectors may react to political headlines

Index Bias (Estimate):

• Index: S&P 500
  Trend: Neutral to Bullish
  Key Resistance/Support: 5,980–6,020 resistance, 5,900 support
• Index: Nasdaq 100
  Trend: Slightly Bearish
  Key Resistance/Support: 19,500 resistance, 19,200 support
• Index: Dow Jones
  Trend: Neutral
  Key Resistance/Support: 42,200 ceiling, 41,500 floor

Semiconductors (Bullish)

Leaders: Nvidia, AMD, Broadcom (AVGO), Micron

• Momentum remains strong on AI-driven demand and bullish guidance from recent earnings.
• Micron’s recent rally (+14% in June) shows institutional support is strong.
• Watch for pullbacks as buying volume slows — any Fed hawkishness could trigger profit-taking.

Trade Idea: Look for pullback entries on NVDA below $130, or a bounce on SOXX ETF near $220.

Real Estate (Neutral to Bearish)

Leaders: PLD (logistics), AVB (apartments), SPG (retail)

• Still weighed down by high rates and low occupancy, especially in commercial.
• Multifamily REITs show modest resilience, especially in Sunbelt regions.
• REIT ETFs like VNQ or IYR may underperform unless bond yields drop quickly.

Caution: Avoid heavy exposure until bond yields dip closer to 4.00%.

Tech Megacaps (Mixed)

Leaders: Apple, Microsoft, Google, Amazon

• AI narrative is intact, but valuations are stretched.
• Apple Vision Pro 2 news may surface, and Amazon’s cloud capex plans could boost sentiment.
• Risk: If PCE inflation is hot, these names may lead the pullback.

Watch Levels:

• MSFT: Support at $420
• GOOGL: Range-bound, breakout needed over $195
• AAPL: Caution under $208

• Ticker: NVDA
  Why Watch: AI strength; watch for pullback below $125–130.
• Ticker: KRO
  Why Watch: Consumer staples standout; post-earnings follow-through.
• Ticker: TSLA
  Why Watch: Robotaxi developments; highly sensitive to political news.
• Ticker: AVGO
  Why Watch: Just split shares; strong AI and data center exposure.
• Ticker: SPG
  Why Watch: Retail REIT bellwether; reacting to interest rate outlook.

The war between Israel and Iran has added an element of uncertainty for investors seeking dividends in oil stocks. The sector, however, features a number of companies that have the financial discipline to weather the storm—whichever way it goes.

West Texas Intermediate crude recently shot up 23% to $75 a barrel since the start of June, as tensions between Iran and Israel turned into full-blown war. The more the conflict heats up, the more the risk grows that energy infrastructure gets hit or the Strait of Hormuz, the waterway between Iran and Oman, is closed. A staggering 20%-30% of global oil demand moves through it daily. With attacks on energy facilities rising, “the risk of a serious supply outage [increases] significantly in an extended war scenario,” says Helima Croft, RBC’s head of global commodity strategy.

Before the conflict, oil prices had been sliding, falling below $60 in April on concerns about oversupply. OPEC announced a production increase in May, part of its plan to add some 2.2 million barrels a day of supply. Concerns about a potential global economic slowdown from the Trump administration’s tariffs also weighed on prices. If the war ends, oil could tumble once again.

That’s not an easy environment for investors to navigate. The average oil stock in the Russell 1000 yields about 3% and will pay out about 50% of estimated 2025 earnings as dividends, with those ratios subject to change based on what happens to oil prices. But by focusing on low-cost producers with strong financials, investors can find stocks that provide a margin of safety through all the volatility without sacrificing upside if oil prices stay higher for longer.

“No one has an edge in this market,” says Smead Capital Management CEO Cole Smead, who recommends focusing on companies with strong returns on invested capital, which signal low costs and strong management. He especially favors companies with the ability to hedge their production and lock in high prices.

Smead likes APA and Diamondback Energy, which yield 4.9% and 2.6%, respectively, pay out less than 40% of expected 2025 net income in dividends, and have asset returns in line with the industry average.

Large companies can offer some safety, too, because of their strong balance sheets and diversified businesses, and they also have exposure to stronger oil prices, says Morgan Stanley analyst and commodities strategist Devin McDermott. One of his favorites: Exxon Mobil. It’s expected to pay out about 60% of estimated 2025 net income in dividends—higher than average, but it comes with a higher-than-average yield of 3.5%.

McDermott also likes Devon Energy and Permian Resources, two U.S.-focused stocks that yield 2.8% and 4.1%, respectively. They pay out roughly 40% of expected 2025 earnings as dividends, but those earnings would rise if oil prices stay north of $70 per barrel, and the dividends look secure even if oil prices drop to $50.

Even some Canadian oil stocks look attractive. Looking north of the border, RBC analyst Michael Harvey recently added shares of Calgary-based ARC Resources to his “best ideas” list. Shares yield 2.4%, lower than the Russell 1000 average, but the company pays out only 30% of expected net income and supplements regular payouts with share repurchases.

That’s a smart strategy, says Smead, who prefers the flexibility and tax efficiency of buybacks over dividends. Buybacks also show a focus on capital return over expanding production when prices spike. And it’s something all these stocks have done during the past 12 months.

Even during a time of war, the focus on low costs, safe payouts, and share repurchases looks like a winning formula for oil-stock dividends.

Move Over, BigDog. Humanoid Robots Are Finally Here. How to Invest.

Humanoid robots are hot, apparently. A China stock index of companies involved with their development is beating the world market by 16 points this year. A new report from UBS says the world will have 300 million humanoids by 2050. An earlier one from Morgan Stanley puts the number at a billion, and the size of the market by then at $5 trillion—twice what the top 20 car makers bring in today.

There are loads of stock picks, for those so inclined. Among UBS’s favorites are Nvidia NVDA-1.12%; a rare-earth metals producer called Lynas; Honeywell; Taiwan Semiconductor Manufacturing; Cognex for machine vision and Amphenol for sensors. Morgan Stanley likes Tesla TSLA +0.03%, Nvidia, and Alphabet, and just published a Humanoid 100 index of companies making all sorts of robo-doodads, from planetary roller screws to harmonic reducers. For investors who want one-click exposure, there’s the newly launched KraneShares Global Humanoid & Embodied Intelligence Index KOID -1.27% exchange-traded fund, which costs 0.69% a year.

It’s entirely possible that this investing theme is both too late and too early; many of the stocks have run, and the production ramp might not hit big numbers for the better part of a decade. Personally, I’m an anti-themist, preferring to let an S&P 500 fund handle the Darwinian allocation of big companies strangling new markets for profits. But for the robo-curious, let me run through some basics.

Remember back when those videos popped up on YouTube with a headless four-legged robot from Boston Dynamics that could walk and jump and keep its balance when pushed? That was BigDog, created in 2005, with funding from the Defense Advanced Research Projects Agency, or Darpa. It never made it out of boot camp; the gasoline engine was deemed too loud for combat, and a battery version couldn’t carry enough weight.

Today, for $1,600 in China, or $2,500 on Amazon AMZN -1.33%, you can buy a UniTree Go2 robot dog that can run, sit, shake hands, stand on its front legs and kick its back legs in the air, and even move autonomously, once the space has been mapped with Lidar. Amazon’s page calls this a toy. UniTree calls it a partner.

For $16,000 in China, or just over $27,000 with U.S. shipping from RobotShop.com, you can step up to the UniTree G1 Humanoid Robot—humanoid meaning humanlike in appearance, with two arms, two legs, a head, and optional dexterous hands. UniTree calls this an agent. It can hop on one leg, crack nuts, open bottles, and flip pancakes—not simultaneously, so far as I know. One thing it can’t do, at just over four feet tall, is reach top shelves. There’s a much more advanced version that’s nearly six feet tall, called H1, that starts at $90,000 in China.

Robots aren’t new as an investing theme. In a 2013 article on the subject, I highlighted three industrial players. Since then, Rockwell Automation and Switzerland’s ABB have quadrupled shareholder money in dollar terms. Germany’s Kuka was bought out by China’s Midea, an appliance maker, in 2016. In a 2017 cover story on robots I mentioned those stocks along with the Robo Global Robotics & Automation ROBO -1.11%

ETF, which has since underperformed the market; Japan’s Fanuc, which has managed to lose money; Amazon and Alphabet, which have been winners; and a chip maker that was still five years away from becoming mostly an artificial intelligence player. “Chips from companies with videogame expertise, like Nvidia, make quick work of the heavy thinking,” I wrote. That one is up more than 5,000%.

Those stories were mostly about hulking mechanical factory arms that perform specific, repetitive tasks. The rise of robots in humanoid form makes sense in part because, as Nvidia founder and CEO Jensen Huang has explained it, “We built the world for ourselves.” Early versions can perform factory work like sorting items and carrying boxes. The endgame, according to Morgan Stanley, is lifelike robots performing generalist roles: think firefighting, nursing, cleaning, and companionship. It reckons that by 2050, capable humanoid robots will cost around $50,000 in rich countries, and $15,000 in low- and middle-income ones.

China’s players are getting a government nudge. Last year, the country’s Ministry of Industry and Information Technology issued guidelines for humanoid robot production, with the goal of making them an important element of economic growth by 2027. In the U.S., Tesla plans to release a humanoid robot called Optimus by next year, costing less than a car. One way to compare humanoid robots is with hand movement, and what’s called degree of freedom. Human hands have a DoF of 27. The entry-level UniTree robot can be upgraded to a DoF of seven. Tesla’s latest Optimus prototype has one of 22.

The highest-value part of humanoid robots will likely be the data models, called VLA for vision-language-action. These can be trained using videos and simulated data, but the best model training comes from time-consuming laboratory work involving humans wearing sensors. China has a manpower advantage there, analysts say, while the U.S. leads on chips. Tesla has an opportunity to become an integrated robot maker that controls its own VLA model. Other hopefuls include America’s privately held Figure, and China’s UBTech and AgiBot.

Big, diversified tech companies with robot exposure might be safer bets than niche players. One thing all humanoid robots are likely to need is magnets, and those require rare earth metals like neodymium and praseodymium, of which supplies are limited, and largely China-based. Australia’s Lynas is a key producer of both of these, and another UBS favorite. Lynas and a U.S. rare-earths player called MP Materials are top-five holdings in the aforementioned KraneShares ETF.

UBS expects the humanoid robot arrival to begin with a trickle—perhaps only two million units worldwide by 2035—but to quickly become a flood as prices fall and capabilities improve. Maybe by then I’ll be ready to try again at robot companionship. The last unit I befriended, a knockoff Roomba, kept trying to throw itself down the stairs.

Factors I’m focusing on this week:

See above.

This week, especially Monday, has a chance to be extremely volatile. I would proceed with caution. Don’t overtrade!

— Richie

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