A $5 trillion gamble... A trade agreement with Vietnam... Tariffs, gift cards, or a vacation?... Main Street pays while the market soars... Stansberry Investor Hour: 'The relentless bid'...

The 'big, beautiful bill' is in the House...

After the Senate narrowly approved the latest version of the "big, beautiful, bill" yesterday afternoon, the 887-page tax and spending measure went up for debate in the House today.

As of our press time, we're waiting to see if or when the House approves this version of the bill.

But President Donald Trump has clearly heard the criticism surrounding it, from Elon Musk ("DEBT SLAVERY!") and elsewhere, including some Republicans, whom he met with at the White House today in an effort to gain their support.

This was Trump's response on Truth Social earlier today...

Nobody wants to talk about GROWTH, which will be the primary reason that the Big, Beautiful Bill will be one of the most successful pieces of legislation ever passed...

While he didn't say it specifically, Trump is presumably talking about the bill's extension of the tax cuts from his first term that, yes, will help businesses and individuals. As I (Corey McLaughlin) wrote yesterday...

In broad strokes, the bill extends Trump's previous tax cuts that were due to expire... adds some restrictions and cuts to Medicaid and food stamps, and "green" energy tax credits... and increases spending on defense and immigration enforcement.

However, the big, beautiful bill would also add $5 trillion to Uncle Sam's debt ceiling. And it seems few, especially in Washington, want to talk publicly about what the cost will be for Americans beyond one election cycle.

So here it is: more debt, inflation, and other unannounced consequences.

But, hey, we have another trade deal...

Also today, Trump announced a trade deal in which "Vietnam will pay" a 20% tariff on imports and a 40% tariff on goods that are "transshipped" through Vietnam. That covers goods that were sourced in another country (like China) but then shipped to the U.S. through Vietnam.

First things first – we must point out that Vietnam will not pay. U.S. businesses importing goods from Vietnam will pay these rates. That's how tariffs work, and the costs could either be passed on to consumers and/or eat into company revenues.

In exchange, Trump said Vietnam will import U.S. goods with zero tariffs. Now, you might wonder what Vietnam wants from us. Apparently, sport utility vehicles ("SUVs"), as Trump wrote in a Truth Social post announcing the agreement...

It is my opinion that the SUV or, as it is sometimes referred to, Large Engine Vehicle, which does so well in the United States, will be a wonderful addition to the various product lines within Vietnam.

The framework deal was welcomed in the market today. The major U.S. stock indexes moved higher this morning on the news, perhaps showing that any bit of additional clarity on Trump's trade policy could continue to boost stocks moving forward.

Yet big questions still remain... and Main Street pain is real in the meantime...

Here's one way a small business is dealing with tariff costs...

Robert Keeley, owner of a guitar-pedal company in Oklahoma City, says he recently redeemed 1.8 million credit-card reward points to pay part of his business's increased costs due to tariffs. Despite Keeley's best efforts, he has been unable to source one of the pedals' critical components – a potentiometer – from anywhere but China. As CBS MoneyWatch reported...

His business was on the hook for tariffs of 25% until March, when the duties temporarily shot up to more than 100%. Now the company pays a rate of 55% for potentiometers, he said.

A 90-day freeze on country-based tariffs, including those in place on China, expires on July 9. Keeley is hoping the current rate will come down, but uncertainty lingers...

In the meantime, Keeley said his latest business credit-card bill totaled about $11,000 and is reflective of higher costs than normal due to shipping and tariff fees.

That's why, rather than redeeming the nearly 2 million American Express points for a stack of gift cards or other rewards, Keeley decided to offset the increased tariff costs for his 35-employee business with points. (Surely this wasn't how American Express imagined these points being used.)

"It sounds like a lot of points, and that gives you a sense of how much I am paying in tariffs," he said. More from CBS...

Keeley emphasized he doesn't like depending on China for manufacturing his company's wares, saying that amounts to what he described as a "single point of failure." Although he hasn't yet raised prices for customers to offset the higher costs, the business may have no choice but to do so if stiff tariffs on Chinese imports remain in place, he told CBS MoneyWatch.

That last part is critical for the economy in general. While this might sound like a unique story, it shows the pressure thousands of business owners have been facing and will continue to struggle with if we don't see more clarity around tariffs soon.

Many businesses are dealing with similar challenges...

Bloomberg had more on this story, and how a group of guitar-pedal makers from across America are turning to each other for help. They're forming a support group – like a "mini OPEC," they joked – and have held regular calls to share their challenges...

Jon Cusack, 55, runs a pedal manufacturer in Holland, Michigan, that builds delay, reverb and other stomp boxes for his brands and other firms. He said he spent $200,000 on inventory before tariffs took effect, draining his savings.

"I've gotten to the point where my slush funds are all gone, and I still am facing several tariff bills coming up," said Cusack, whose 30-person company had revenue of $3.9 million last year. "Can we survive three months, six months, you know, a year? My next step is to mortgage the house, and I really don't want to do that."

That doesn't scream "everything is fine" with the economy...

Neither does today's private payrolls jobs report from payroll processor ADP. The report showed a decline of 33,000 jobs in June, the first month-over-month decrease since March 2023. Wall Street's consensus forecast was for an increase of 100,000.

While this is just one report, it has set the stage for a possible "surprise" in tomorrow's "nonfarm payrolls" report from Uncle Sam with an updated unemployment rate for June.

An unemployment rate of more than May's 4.2% would be the highest level since fall 2021 and could stoke some short-term volatility.

Today, though, the stock market has never looked more optimistic...

The benchmark S&P 500 Index closed at a new all-time high, gaining nearly 0.5%, while the tech-heavy Nasdaq Composite Index and small-cap Russell 2000 Index outperformed, up 0.9% and 1.1%, respectively. The Dow Jones Industrial Average was little changed.

We're not surprised.

Often when the economy appears weak or has problems of note for Main Street, stocks can move higher (or vice versa).

This is especially true when investors expect help for Wall Street is on the way. That has been the case lately with the new tax and spending bill and an increased chance of interest-rate cuts from the Federal Reserve in the second half of the year.

As we wrote yesterday, Fed Chair Jerome Powell said the central bank is preparing to cut rates later this year. Even if Powell doesn't cut rates, whoever replaces him in May 2026 will surely do it as soon as humanly possible.

Now, the latter scenario would be almost a year from now, which might sound too far out to matter, but the drawn-out process might matter a lot. Just the expectation of lower rates could provide a bullish backdrop for the entire market through the middle of next year.

The market is becoming enamored by the idea of a cheaper cost of money, via the Fed and Powell or Trump's pick to replace him eventually.

Meanwhile, market sentiment has become increasingly bullish since Trump's 90-day reciprocal tariff "pause," which came after the Liberation Day hullabaloo and the April low for U.S. stock indexes.

A framework deal with China in May helped stocks move another leg higher. The S&P 500 is now up 6% at the midpoint of 2025 (on pace for a "normal" year of returns), and today's "deal" with Vietnam could be a sign of more trade agreements to come. Plus, the tariff pause could be extended next week.

There are bound to be surprises ahead, but for now, enough people with enough money in the market are seeing a "green light," so this bull market can continue.

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New 52-week highs (as of 7/1/25): iShares MSCI Emerging Markets ex China Fund (EMXC), Enel (ENLAY), iShares MSCI Spain Fund (EWP), Cambria Emerging Shareholder Yield Fund (EYLD), Honeywell International (HON), JPMorgan Chase (JPM), NetEase (NTES), Novartis (NVS), Telefônica Brasil (VIV), VeriSign (VRSN), and Industrial Select Sector SPDR Fund (XLI).

In today's mailbag, feedback on yesterday's edition, which covered Elon Musk's continued criticism of the "big, beautiful bill"... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"Musk is correct! Trump and the FEDERAL RESERVE BANK ARE WRONG! LOWER RATES MEANS A WEAKER DOLLAR AND THAT MEANS HIGHER INFLATION!! EVERY KING, QUEEN, LEADER, DICTATOR, MONARCH, PRESIDENT IS CONTROLLED BY THEIR CENTRAL BANKS PERIOD!!..." – Subscriber David B.

All the best,

Corey McLaughlin with Nick Koziol
Baltimore, Maryland
July 2, 2025