The Cro Capital Report

Good morning, and welcome to another edition of The Cro Capital Report. In this edition, we highlight the S&P 500’s continued climb, rising Treasury yields, and a stronger U.S. dollar. We also cover the Fed’s latest decision to hold rates steady, reflect on recent portfolio drag, and share two watchlist names as we prepare for new opportunities.

Markets at a Glance

Figure 1: Month-over-month economic Indicators (June 30th–July 31st, 2025)

• S&P 500: $6,339.39 — ↑ 2.17%

• VIX (Volatility Index): 16.72 — ↓ 0.06%

• 10-Year Treasury Yield: 4.378% — ↑ 12.9 bps ( ↑ 0.129%)

• U.S. Dollar Index: $100.05 — ↑ 3.33%%

• Crude Oil: $69.31/barrel — ↑ 6.45%

• Copper: $4.42 — ↓ 12.94%

• Gold: $3,342.7 — ↑ 1.06%

• Uranium: $71.25 — ↓ 8.71%

This month the S&P 500 continued to strengthen and reach new highs likely due to better-than-expected corporate performance, strong consumer demand, and hopes of easing monetary policy which is discussed in more detail later in the newsletter. Additionally, the rise in the 10-year treasury yield may indicate bond investors are anticipating more robust economic activity or stickier inflation. This all comes as expectations of a rate cut are reduced. This is further backed by the rally in the dollar indicating higher U.S. interest rates for longer attracting investors.

Portfolio Performance Update: Staying Disciplined Amid Short-Term Setbacks

Two weeks ago, Cro Capital was riding high after reclaiming our performance lead over the S&P 500. This week, we’re reminded that alpha generation is rarely a straight line. After a stretch of strong wins, a combination of early profit-taking and sector-specific weakness has pulled our year-to-date return down to +6.35%, now trailing the S&P 500’s +7.78%.

Our decision to lock in a +34% gain on AMDL proved to be premature, as the stock rallied further from $11.50 to $13.30 after our exit. We’ll own that. Even disciplined risk management can sometimes leave money on the table. Similarly, while REEMF remains our third-largest allocation and still shows a net gain for the year, the recent pullback from $1.16 to $0.91 weighed heavily on our returns. TSLA also delivered a softer week, contributing to the modest performance drag.

Despite these near-term headwinds, our portfolio positioning remains aligned with our macro outlook for the remainder of the year. We’ve built a ~10% cash reserve and are actively scouting for our next alpha-generating moves. Two names currently on our watchlist:

• Albertsons (ACI): Solid earnings beat, raised guidance, and attractive valuation — yet the stock has been punished due to the failed Kroger merger. We see long-term value at these levels.

• Green Dot (GDOT): Under-the-radar fintech name with intriguing upside potential given the evolving payments landscape.

We remain on the sidelines for now but are prepared to act quickly if our price targets are met. While the last two weeks have been challenging, we stand by our conviction that our portfolio is built to outperform in the current and evolving economic environment.

Fed Holds Rates Steady Amid Tariff-Driven Cost Increases

While Jerome Powell has faced intense pressure to lower the benchmark policy rate, he kept it unchanged at 4.25% to 4.5% during the July interest rate decision meeting. Powell noted that most of the tariff burden is currently being absorbed by companies or retailers upstream from consumers, while exporters are absorbing only some of the tariff costs through price reductions.

The Federal Reserve’s July Beige Book, which is based on business and local feedback from twelve regional districts across the U.S., highlights that tariffs are driving up costs for key inputs. Especially in manufacturing and construction. It also states that “many firms passed on at least a portion of cost increases to consumers through price hikes or surcharges.”

We will continue to monitor whether companies intend to keep passing on these costs to consumers, which could influence shifts in the current administration’s policies. For now, we anticipate continued volatility throughout the remainder of 2025 as the effects of tariffs become more visible in economic data.

Thanks for reading this week's newsletter! As always, please share any feedback with us by responding to this email or emailing us at [email protected]. — The Cro Capital Team

*The information provided in The Cro Capital Report is for informational and educational purposes only and should not be construed as investment advice, a recommendation, or an offer to buy or sell any securities. The views expressed are those of Cro Capital and are subject to change at any time without notice. While we strive to ensure accuracy, we make no representations or warranties as to the completeness or reliability of the content. Always do your own research and consult with a licensed financial advisor before making any investment decisions. Investing involves risk, including the potential loss of principal.