How Low Can Stocks & Crypto Go? July 14th, 2025
Tariffs, earnings and inflation are in focus
Bottom Line: My first rule of money... Never let your money and emotions cross paths. This story is a weekly wake-up call to show you the near-worst-case scenario for stocks and crypto. Why? So, you can plan your financial future with a cool head, not a racing pulse. The odds of a near-worst case outcome almost certainly won’t happen, however if your plan accounts for it – it can help you manage through even the most trying markets like what we’ve experienced this year.
The US stock market is history’s ultimate wealth-building beast. Crypto? It’s minted millionaires from early believers. Fact: Over 90% of the time, investors who try to “time” the market end up poorer than if they just stuck to their original investments. This is about dodging that trap.
Here’s how the big three indexes are faring in 2025 so far:
- DOW: +5% (-1% last week)
- S&P 500: +7% (flat last week)
- Nasdaq: +7% (flat last week)
Investors took a bit of a breather with the S&P 500 and Nasdaq touching record highs during the week once again but effectively ending flat on the week while the DOW slightly backed away from record highs in advance of an especially important week.
There are three big storylines that will impact stocks this week. 1) The start of the corporate earnings season on Tuesday when major banks kick off the 2nd quarter’s reporting. 2) Tuesday’s Consumer Price Index Report reflecting the consumer inflation rate for June 3) Trade/tariff developments. All three will be critical as to what the direction of the market will be from here.
Earnings need to show follow through to help justify stock prices at record levels and lofty valuations – also guidance for the second half of the year will be paramount as well. The CPI report for June is expected to show the full effects of April’s tariff announcements and will be central in determining the outlook for interest rates by the Federal Reserve in advance of this month’s policy meeting. And then there is tariff 2.0 material.
Following an absence of meaningful progress on trade deals, at least to President Trump’s satisfaction, aside from China, the U.K. and Vietnam, Trump has effectively turned August 1st into Liberation Day 2.0. That’s become the deadline date for progress or a significant increase in tariffs charged on imports into the U.S. above the current 10% level.
As for cryptos...
The performance of digital currencies was the biggest story of all last week with a massive rally led by Bitcoin which reached a new record high of $118,000. Here’s a look at where they stand.
- Bitcoin: +10% last week +25% YTD
- Ether: +13% last week -12% YTD
- BitwiseETF (Top 10 cryptos): +7%, last week +15% YTD
I can’t value cryptos because they have no inherent value. Stocks, though? They’ve got bones. Let’s break down the S&P 500:
- Current P/E: 29.83
- Historic Avg. P/E: 16.16
Translation: On earnings alone, the maximum downside risk is a 46% drop from here—flat with last week as stock prices and fundamentals were largely unchanged. The market is still somewhat historically expensive; we have seen a 2% improvement in the fundamental value of the market during this market cycle.
So, What’s Your Move?
If a 46% dip wouldn’t derail your life, you’re probably golden. If it would? Time to call a pro and build a plan that doesn’t leave you sweating bullets—or making mistakes.