Nearing all-time highs… A simple gauge of market health is flashing green… What’s happening beneath the headlines… Stress on everyday Americans… Bills will come due… The companies to avoid…

The all-time high watch continues…

As I (Corey McLaughlin) wrote yesterday, the major U.S. indexes are on the brink of hitting fresh all-time highs, and they inched their way closer to them today.

The benchmark S&P 500 Index gained 0.8% and is a fraction from its all-time close of 6,144 on February 19. The tech-heavy Nasdaq Composite Index was up 1%, a few points from its record of 20,173 set on December 16.

The small-cap Russell 2000 Index and the Dow Jones Industrial Average are a bit further from their all-time highs… but are still trending upward since mid-April. On Tuesday, the Dow punched through its longer-term, 200-day moving average (200-DMA), a simple measure of a long-term trend. The Russell is still under its 200-DMA.

The market’s previous all-time highs were hit after President Donald Trump’s election in November, but before the Liberation Day hullabaloo in April. Fast-forward a few months, and Mr. Market has moved past tariff concerns, even though they’re not practically resolved and we’re nearing July 8 and 9, the end of Trump’s 90-day reciprocal tariff pause from April.

But White House Press Secretary Karoline Leavitt told reporters today that the early July deadline is “not critical.” OK then. Nothing matters!

In the meantime, the market is looking increasingly like a place where higher-risk assets (like bitcoin and trendy IPOs) are favored over traditional defensive positions.

Nvidia (NVDA) hit a record close yesterday, and many of the “Magnificent Seven” are charging higher again – even though Elon Musk’s Tesla (TSLA) is lagging. Semiconductors in general are having a moment once more.

Expectations for Federal Reserve rate cuts are also growing. Fed-funds futures traders think the probability of the central bank cutting rates at its September meeting is now roughly 93%, according to the CME Group’s FedWatch tool. That’s up from 64% a week ago.

It sure looks like bullish times.

A simple gauge of stock market health…

My friend Jeff Havenstein, a senior analyst on Dr. David “Doc” Eifrig’s team, shared a look at one indicator that’s flashing “bullish” in yesterday’s free Health & Wealth Bulletin. That’s the advance-decline (A/D) line of the S&P 500. As Jeff wrote…

One of the simplest ways to gauge market health is by checking if more stocks are rising than falling. This is what the A/D line looks at.

The A/D line takes the number of stocks that went up in a given day and subtracts the number of stocks that went down. If more stocks went up, the line goes up. If more stocks went down, the line goes down.

In a typical bull market, as more stocks rise, the A/D line usually goes up. But when the A/D line moves lower while the market continues to rise, it’s time to worry. This means that gains in stocks are concentrated in only a few companies.

This is what happened during the dot-com bubble and bust.

However, what we saw earlier this year in the post-Liberation Day sell-off was “a completely different story,” Jeff said. That was one of the reasons why he was convinced that April’s lows were a buying opportunity.

This isn’t revisionist history, either. Jeff told readers it was time to buy – or at least hold –amid the tariff panic in the Health & Wealth Bulletin on April 9, as we referenced in the April 10 Digest.

He wrote about how, following Trump’s proposed reciprocal tariff rate announcement and one of the worst two-day sell-offs in stocks since 1950, history suggested good returns would follow.

Jeff returned to this idea in yesterday’s Health & Wealth Bulletin in the context of the advance/decline line…

Back in late March and early April, the A/D line for the S&P 500 was giving us a fresh signal. Only this time, it wasn’t flashing a warning… It was flashing an opportunity.

Because of President Donald Trump’s tariffs, the market sold off 19% from its high in February – nearly putting us in a bear market. But the A/D line [the green line] barely moved lower. You can see the wide divergence circled below…

This told us that in the short term, the S&P 500 was healthy. Most stocks in the index were posting gains. This revealed that the selling in the index was simply concentrated in a few big tech companies with lofty valuations. (The S&P 500 is market-cap weighted where the biggest companies make up most of the index.)

A ‘green light for stocks’…

Using the latest action from this indicator, Jeff doesn’t see this run higher ending anytime soon…

Today, we’re seeing the A/D line right near all-time highs.

That’s a massive green light for stocks to keep moving higher.

Until we start to see some weakness in the A/D line, you can continue to feel good about stocks.

Now, this doesn’t mean you should go “all in” on stocks today… or “all out” if you’re a contrarian and think the euphoric environment is due for a reality check.

We’re not seeing extreme sentiment today. Around half (45%) of NYSE-listed stocks are trading above their 200-DMA. So about half of these stocks are in uptrends and half are not. That’s as close to average as you can get.

But, overall, this is an environment where bulls may feel better than bears until further notice.

A favorable ‘breakout’…

Our friend and colleague, DailyWealth Trader editor Chris Igou, shared a similar message to his subscribers today, noting that the recent performance in tech stocks (and the Nasdaq 100 Index hitting a new high) could lead to double-digit returns in the sector over the next year…

These are the stocks that thrive in bull markets. And they can often lead the charge higher in good times.

That’s why it’s not a big surprise to see this sector hit a new high before the S&P 500 Index. The markets are rebounding, and technology stocks are outperforming.

If you’ve been on the sidelines, don’t worry. You haven’t missed anything yet. That’s because breakouts like this aren’t a sign of the top. Instead, they often mean that even higher highs are on the way.

We’re experiencing one of those moments right now…

Chris looked at similar circumstances over the past few decades after the Nasdaq 100 hit a new 52-week high. He found that buying these “breakouts” led to positive returns 92% of the time over the next year and an average one-year return of roughly 21%.

Of course, this doesn’t mean that a continued bull run will be a straight shot higher… that surprises can’t emerge that could knock stocks off their current course… or that you still shouldn’t avoid certain parts of the market.

Here’s Nick Koziol with more about that…

A lot of people’s credit scores are at risk of heading lower…

For months, we’ve harped on the dangers of buy now, pay later (“BNPL”) loans (you can read more here, here, and here).

Put simply, folks are using these loans – where you can buy something and pay it off over time – more and more. More people are using these loans for essentials, not just discretionary purchases. And they’re falling behind on these loans, too.

In May, the Federal Reserve released a study showing that nearly one-fourth of customers were late making a payment on their BNPL loans in 2024 – up from 18% in 2023.

In the past, being late on these loans didn’t affect folks’ credit scores.

But that’s changing…

Consumer credit rating bureau FICO announced that it will launch a credit score that includes BNPL loans.

At first, it may not change much. FICO and BNPL giant Affirm (AFRM) said that including BNPL loans would lead to a less-than-10-point change in credit scores for 85% of folks. But with late payments rising, folks could see their scores change by a lot more than that.

And it’ll hit the lowest rungs of the credit ladder first. As Rob Spivey, director of research at our corporate affiliate Altimetry, wrote in the free Altimetry Daily Authority newsletter yesterday…

The [Consumer Financial Protection Bureau’s] latest data shows that nearly two-thirds of BNPL borrowers have some form of subprime credit. And BNPL lenders approved 78% of their loan applications.

Without showing up on credit scores, Rob says BNPL losses have been “flying into a storm without any radar.” Now, those issues will firmly be on the radar.

Meanwhile, credit-card delinquencies are sitting at a 14-year high of 12.3%. These are warning signs about the U.S. consumer, who is tied to about 70% of the U.S. economy’s activity.

Another sign of stress…

It’s not just credit-card delinquencies and BNPL loans that have us worried about the consumer.

We’re also keeping a close eye on student loans. After a five-year “pause” on student loan payments, the Department of Education began resuming collections of defaulted federal student loans in May.

That immediately put more than 7% of all student loans in default. As we wrote last month, only 38% of borrowers are current on their federal student loan payments. In total, the Department of Education estimates that “there could be almost 10 million borrowers in default in a few months.”

Credit bureau TransUnion estimates that nearly 2 million borrowers will go into default in July. Since 2020, the share of borrowers more than 90 days late on their student loans has nearly tripled to 31%.

And these folks aren’t getting off the hook.

Once they enter default, borrowers are at risk of “the start of collections activities,” TransUnion Vice President and Head of U.S. Research and Consulting Michele Raneri says.

In short, these borrowers could be denied future student aid benefits, see a hit to their credit rating, or – in the worst-case scenario – have their wages garnished.

According to the Department of Education, the government can withhold up to 15% of someone’s paycheck and send it to the loan holder to pay down the defaulted loan. And it could even withhold tax returns and use that money to repay the debt.

That’s money people won’t have to pay down their credit cards or car loans. And it could push more people to take out BNPL loans. As Rob writes…

Additionally, 63% of BNPL borrowers had at least two concurrent loans. And 33% had acquired BNPL loans from multiple providers.

Klarna’s rising credit losses and Affirm’s expanding loan book (which is up 36% [year over year]) are both warning signs.

Putting it all together…

With the market closing in on all-time highs, investors aren’t worried about the state of the U.S. consumer just yet. But eventually, the consumer will begin to hurt the economy.

Just this morning, the Bureau of Economic Analysis revised its estimate for first-quarter GDP lower – to a decline of 0.5% – citing “downward revisions to consumer spending.” When consumer credit starts to roll over, it will be a much bigger drag on the economy.

We don’t know when the market will start to wake up to the issues facing consumers. But in the meantime, there is one part of the market to avoid. Rob concludes with his take on companies like Affirm…

The bottom line is, investors should be skeptical of companies that rely on fragile borrowers to keep growing.

We agree. Folks should be focused on holding high-quality, capital-efficient stocks that will be in demand no matter what happens with the economy and “hard assets” like gold, which have stood the test of time to protect against inflation and other “chaos.”

Things are looking bullish for now, but as we’ve seen this year already, it’s wise to expect surprises ahead.

	Save Your Seat for the 2025 Stansberry Research Conference & Alliance Meeting It’s that time again… Registration is now open for our 23rd annual Stansberry Research Conference & Alliance Meeting this fall in Las Vegas. Click here for a special message from Dr. David “Doc” Eifrig about this year’s big event. As longtime subscribers know, our annual conference is a gathering of some of the brightest minds in financial research and beyond… You’ll hear from your favorite Stansberry Research editors – like Whitney Tilson, Dan Ferris, Eric Wade, Doc Eifrig, Greg Diamond, and more. Plus, Marc Chaikin, Joel Litman, and our founder Porter Stansberry will be there speaking, as well. And we just announced some of our 2025 big-name industry speakers, including “Silicon Valley’s most feared journalist,” an artificial-intelligence expert, one of Fortune magazine’s “World’s 50 Greatest Leaders,” an original Saturday Night Live writer, a few returning fan favorites, and more. Check out the full 2025 speaker lineup right here. The past few years, conference tickets have sold out! Don’t miss what’s shaping up to be our best event ever… Click here to reserve your seat today.

New 52-week highs (as of 6/25/25): Broadcom (AVGO), Alpha Architect 1-3 Month Box Fund (BOXX), Cisco Systems (CSCO), JPMorgan Chase (JPM), Microsoft (MSFT), Neuberger Berman Next Generation Connectivity Fund (NBXG), ResMed (RMD), and Sprott (SII).

In today’s mailbag, feedback on yesterday’s edition, which included a look at the recent IPO frenzy… Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

“The Lime IPO is definitely a sign of a bubble. Lime bikes are a total nuisance. They get dumped in canals, posing a safety and pollution risk due to rampant theft of their bikes.” – Subscriber S.J.I.

All the best,

Corey McLaughlin with Nick Koziol
Baltimore, Maryland
June 26, 2025