Michael Saylor Forced to Sell Bitcoin, Supreme Court Defends Fed Independence

**Zaid Admani** (0:00)
Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Tuesday, June 30th. In today's episode, we'll break down the Supreme Court's ruling on Fed Governor Lisa Cook and what it means for Fed independence. We'll also tell you why Michael Saylor might be forced to sell his Bitcoin. Then stick around to the end of the show to find out why gold just had its worst quarter in 13 years. We got a great show for you today.
Let's go.
Stock started the week off on a strong note. The S&P 500 jumped 1.2% while the Nasdaq ripped 2.1%, both indices finally breaking a five day losing streak. And I guess I have to mention the Dow Jones here because the Dow rose 0.6% yesterday and closed above 52,000 points for the first time ever. Now, I'm still a Dow hater, all right, but it did get a makeover yesterday. Verizon was removed from the index and replaced by Google's parent company, Alphabet. So the Dow became slightly more relevant in my eyes. And by the way, Alphabet made an immediate impact on the index. The stock jumped almost 5% on Monday, which helped push the Dow to a record high. And overall yesterday was a nice bounce back for tech stocks in general. Amazon, Meta, NVIDIA were all up 1 to 3% and Tesla had a monster day up 8%. By the way, it wasn't just tech stocks rallying on Monday, even small cap stocks were up with the Russell 2000 index hitting a record high. The Russell 2000 is now up 21% this year, which is the best first half performance for the index in over three decades. Now looking ahead, we're about two weeks away from kicking off earnings season for the second quarter. And the key question for this earning season is whether corporate profits can keep growing like they have the last couple quarters. According to the Wall Street Journal, corporate profit margins hit an all-time record high in the first quarter with net profit margins for the S&P 500 coming in at 14.8%.
And it's not just tech companies padding those numbers, financials, industrials and multiple sectors are reporting margins above their five-year average. Overall earnings growth for the S&P 500 came in at nearly 29% in Q1, which is the strongest since the end of 2021 I think it was this strong earnings season that helped reignite the rally in April and May. So will this type of earnings growth continue for Q2 will be the key thing to monitor. We'll start getting some answers in a couple of weeks. In the meantime, remember we have a short week this week, markets are closed on Friday for the 4th of July. So no show from us on Friday and also no deep dive this weekend as well. But we still have a lot to cover this week, including Nike earnings, which dropped tonight. We'll cover those on tomorrow's episode and then the June jobs report on Thursday morning. So we'll be covering that along with everything else happening in the market. So if you're new here, definitely get subscribed to the podcast and tune in every day to stay in the loop.
Let's run through some headlines. Starting with the Supreme Court. The Supreme Court made a big ruling yesterday that directly impacts the economy, the stock market and our overall financial system. In a 5-4 decision, the court blocked President Trump from firing Federal Reserve Governor Lisa Cook, reaffirming the Fed's independence from the White House. Now, quick backstory here. Last August, President Trump tried to fire Lisa Cook from the Fed's Board of Governors, accusing her of lying on mortgage paperwork back in 2021 before she joined the Fed. Lisa Cook denied wrongdoings. Her lawyers have argued that this was just an inadvertent paperwork issue, and they sued to block the firing, saying that the real reason she was being fired was because President Trump wanted more control over the Fed and interest rates. And that's why this case became such a big deal. This was the first time in the Fed's history that a president has tried to remove a sitting governor. And in a five-four ruling, the Supreme Court basically said the president cannot just fire a Fed governor on the spot without a meaningful legal scrutiny. Chief Justice John Roberts made it very clear that allowing the president to fire Fed governors at will would threaten the central bank's independence. And that was the key issue because Fed independence is basically the foundation of our financial markets. The Federal Reserve sets interest rates and investors want the Fed making those decisions based on inflation, employment and the economy, and not based on what the president wants before an election or what the stock market might do that week. If investors started to believe the Fed was just taking orders from the White House, that could create a real problem in the bond market. Investors may start demanding higher yields to buy US. Treasuries, and that could increase borrowing costs for everybody. So this ruling by the Supreme Court was a major win for Fed independence, and it was also probably a win for the new Fed chair, Kevin Warsh. Remember, Trump picked Kevin Warsh to lead the Fed, but Warsh still needs credibility with the markets. So this ruling could give him more room to operate independently instead of just looking like someone who's listening to what the White House wants to do. But look, this fight is not over yet. The court did not say that President Trump could never fire Lisa Cook or any Fed governor for that matter. The court just said that the first attempt to fire Lisa Cook was illegal because Lisa Cook was never given proper due process. The case now goes back to the lower courts, and President Trump is actually taking a victory lap. He posted that this ruling was strictly procedural and vowed to take further action against Lisa Cook. So the door is still open for another attempt to fire her, but the White House would have to give Lisa Cook more explanation of the evidence and a chance to respond. So we'll see what happens down the line. But for now though, it is a victory for Fed independence. And I do think the market probably would have freaked out if the Supreme Court had ruled the other way. Because once you let the president fire Fed governors over policy disagreement, I mean, the whole system could start to fail. What's funny is the Supreme Court did give President Trump broader powers to fire officials than other independent agencies like the FTC. But the Fed was a big exception. Let's talk about some stocks making moves today.