Issues
This is the worst market we’ve seen in a while. And the ugliness could last a while.
Tariff talk is all the rage. The economy is slowing. Nobody is sure about inflation or interest rates. It all adds uncertainty. The market had been riding high for more than two years. A comeuppance has arrived. How long will it last and how deep will it be?
During times of maximum uncertainty like this, healthcare stocks are a great place to be. That was the topic of last month’s exquisitely crafted issue. But there is another industry with both defensive and growth characteristics that’s ideal for uncertain times – garbage.
We live in the garbage capital of the world. This country generated 292 million tons of waste in 2018, up from 251 tons in 2012, and nearly double the waste produced in 1980. That’s enough waste to produce a pile long enough to go to the moon and back – 29 times. And that’s every single year. Waste services are big business. In 2023, the U.S. waste management services industry generated $145 billion in revenue. That was up from $137 billion the prior year and that number is likely to keep rising.
Garbage will continue to pile up regardless of where interest rates go, the level of economic growth, or the fallout from tariffs. The market could soar, or the world could go to Hell in a handbag. Either way my wife will nag me every week to take out the garbage.
Bank on a company with certain earnings and revenue in uncertain times. Defensive stocks tend to outperform during and after volatile markets. In this issue, I highlight a company that is the unquestioned leader in waste services. The stock has a strong track record which could get even better in the years ahead.
Tariff talk is all the rage. The economy is slowing. Nobody is sure about inflation or interest rates. It all adds uncertainty. The market had been riding high for more than two years. A comeuppance has arrived. How long will it last and how deep will it be?
During times of maximum uncertainty like this, healthcare stocks are a great place to be. That was the topic of last month’s exquisitely crafted issue. But there is another industry with both defensive and growth characteristics that’s ideal for uncertain times – garbage.
We live in the garbage capital of the world. This country generated 292 million tons of waste in 2018, up from 251 tons in 2012, and nearly double the waste produced in 1980. That’s enough waste to produce a pile long enough to go to the moon and back – 29 times. And that’s every single year. Waste services are big business. In 2023, the U.S. waste management services industry generated $145 billion in revenue. That was up from $137 billion the prior year and that number is likely to keep rising.
Garbage will continue to pile up regardless of where interest rates go, the level of economic growth, or the fallout from tariffs. The market could soar, or the world could go to Hell in a handbag. Either way my wife will nag me every week to take out the garbage.
Bank on a company with certain earnings and revenue in uncertain times. Defensive stocks tend to outperform during and after volatile markets. In this issue, I highlight a company that is the unquestioned leader in waste services. The stock has a strong track record which could get even better in the years ahead.
The market is sputtering. While the S&P is still up slightly for the year, it’s at the same level it was three months ago.
After two glorious years of being up over 20%, stocks may be expensive and due for consolidation. While that’s certainly possible, it’s normal and healthy in a bull market. And stocks may not be as expensive as they seem.
This bull market has been driven higher by technology and the artificial intelligence catalyst. Without a handful of large technology companies, the bull market returns so far would be quite lame. But things are changing. There are good reasons to believe the relative returns of the rest of the market should vastly improve.
The rally has broadened out. Other stocks are picking up the slack while technology is wobbling. The grossly lopsided performance couldn’t last. And there’s more to the story than just sector rotation. Earnings are catching up.
The energy sector in particular is likely to benefit from the shared bounty going forward.
There are powerful reasons to believe certain energy stocks will benefit from increasing natural gas demand, more oil and gas drilling, and friendlier regulations. Some of these stocks have pulled back from the highs and offer an attractive entry point. In this issue, I highlight two energy stocks that are likely in a multi-year bull market that historically generate high call premiums.
After two glorious years of being up over 20%, stocks may be expensive and due for consolidation. While that’s certainly possible, it’s normal and healthy in a bull market. And stocks may not be as expensive as they seem.
This bull market has been driven higher by technology and the artificial intelligence catalyst. Without a handful of large technology companies, the bull market returns so far would be quite lame. But things are changing. There are good reasons to believe the relative returns of the rest of the market should vastly improve.
The rally has broadened out. Other stocks are picking up the slack while technology is wobbling. The grossly lopsided performance couldn’t last. And there’s more to the story than just sector rotation. Earnings are catching up.
The energy sector in particular is likely to benefit from the shared bounty going forward.
There are powerful reasons to believe certain energy stocks will benefit from increasing natural gas demand, more oil and gas drilling, and friendlier regulations. Some of these stocks have pulled back from the highs and offer an attractive entry point. In this issue, I highlight two energy stocks that are likely in a multi-year bull market that historically generate high call premiums.
Other stocks are picking up the slack while technology is wobbling. The grossly lopsided performance that dominated this market for so long couldn’t last. And there’s more to the story than just sector rotation. Earnings are catching up.
I’m still bullish on the portfolio AI stocks. But other sectors of the market are overdue for stronger relative performance. These stocks are taking over and likely to post much better relative performance over the course of the year.
Healthcare is perhaps the best of all sectors that aren’t technology. It’s an all-weather industry that offers a very seldom-found combination of safety and growth. Plus, these stocks are poised ahead of the megatrend of the rapidly aging population. Healthcare demand is skyrocketing. And the best stocks should get a great ride.
In this issue, I highlight four healthcare stocks currently in the portfolio. Despite the lopsided bull market returns so far, a couple of these stocks have been among the very best performers. And now they should be poised for a strong run in 2025.
I’m still bullish on the portfolio AI stocks. But other sectors of the market are overdue for stronger relative performance. These stocks are taking over and likely to post much better relative performance over the course of the year.
Healthcare is perhaps the best of all sectors that aren’t technology. It’s an all-weather industry that offers a very seldom-found combination of safety and growth. Plus, these stocks are poised ahead of the megatrend of the rapidly aging population. Healthcare demand is skyrocketing. And the best stocks should get a great ride.
In this issue, I highlight four healthcare stocks currently in the portfolio. Despite the lopsided bull market returns so far, a couple of these stocks have been among the very best performers. And now they should be poised for a strong run in 2025.
January was shaping up to be another stellar month for stocks. The S&P 500 closed last week 3.73% higher for the month.
But stocks came crashing down on Monday when a Chinese start-up claimed that its highly popular AI assistant performs equally as well as leading models at much cheaper prices and using far less data. It calls into question the anticipated demand growth for AI.
But the selloff is probably an overreaction. This is the problem with high-flying stocks. Any bad news gets dramatically amplified because euphoria is so easy to disappoint. The AI catalyst is still very real. But it may have gotten ahead of itself. A day like Monday was bound to happen. It also creates opportunity.
In this issue, I highlight one of the best technology stocks on the market. It was riding high for good reasons, rapidly growing profits. Monday’s overreaction prompted the worst selloff of the stock in years. There is likely to be a bounce back and the stock can generate very high-priced calls.
But stocks came crashing down on Monday when a Chinese start-up claimed that its highly popular AI assistant performs equally as well as leading models at much cheaper prices and using far less data. It calls into question the anticipated demand growth for AI.
But the selloff is probably an overreaction. This is the problem with high-flying stocks. Any bad news gets dramatically amplified because euphoria is so easy to disappoint. The AI catalyst is still very real. But it may have gotten ahead of itself. A day like Monday was bound to happen. It also creates opportunity.
In this issue, I highlight one of the best technology stocks on the market. It was riding high for good reasons, rapidly growing profits. Monday’s overreaction prompted the worst selloff of the stock in years. There is likely to be a bounce back and the stock can generate very high-priced calls.
While the outlook for 2025 is positive, things are changing.
Sure, this bull market has driven the S&P 500 nearly 70% higher. But most of the gains are from technology stocks. Until this past summer, nearly all the bull market returns were driven by technology. The rest of the market had done very little.
But the rest of the market is waking up. While artificial intelligence (AI) will likely continue to be a powerful growth catalyst, its dominance over everything else might not be as pronounced in 2025 as it has been in the past. Earnings for other stocks are catching up.
The earning growth difference between the “Magnificent 7” companies and the other 493 S&P 500 companies is expected to plummet from 27.8% last year to 8.3% this year. The rest of the market is cheap, has momentum, and will likely get hot this year as stocks experience an earnings growth spike that could last for years.
In this issue, I highlight a healthcare stock that looks highly promising in 2025. It is poised in front of the aging population megatrend, which makes a successful pick so much easier, and it will likely experience a sizable earning spike in the years ahead. It is an existing portfolio stock of which half the shares were sold last year. It’s a great time to buy back the other half.
Sure, this bull market has driven the S&P 500 nearly 70% higher. But most of the gains are from technology stocks. Until this past summer, nearly all the bull market returns were driven by technology. The rest of the market had done very little.
But the rest of the market is waking up. While artificial intelligence (AI) will likely continue to be a powerful growth catalyst, its dominance over everything else might not be as pronounced in 2025 as it has been in the past. Earnings for other stocks are catching up.
The earning growth difference between the “Magnificent 7” companies and the other 493 S&P 500 companies is expected to plummet from 27.8% last year to 8.3% this year. The rest of the market is cheap, has momentum, and will likely get hot this year as stocks experience an earnings growth spike that could last for years.
In this issue, I highlight a healthcare stock that looks highly promising in 2025. It is poised in front of the aging population megatrend, which makes a successful pick so much easier, and it will likely experience a sizable earning spike in the years ahead. It is an existing portfolio stock of which half the shares were sold last year. It’s a great time to buy back the other half.
By most measures, 2025 looks pretty good for stocks.
The Fed has begun a rate-cutting cycle that should last for the next two years. Historically, stocks do well when the Fed is cutting rates and there is no recession. And the economy has been solid. This bull market is just 25 months old and has returned 65%. Bull markets usually don’t just run out of gas after two years. In fact, the average bull market has lasted 50 months and returned 152%.
But stocks are expensive. The S&P currently sells at 22.3 times forward earnings compared to an average of 16 times over the last twenty years. The market returned 26% in 2023 and about 28% this year with two weeks to go. It might be tough for stocks to deliver another consecutive year of 20%-plus returns.
It may be that a lot of the easy upside is behind us. Stocks can still perform well, but they’ll probably have to earn it in 2025.
In this issue, I highlight a stock that is poised for a strong earnings rebound in 2025. It is a stock that bounces a lot between the highs and lows. And it is currently well below the high. It is also one of the best healthcare companies on the market at a time when the population is older than ever before and aging at warp speed.
The Fed has begun a rate-cutting cycle that should last for the next two years. Historically, stocks do well when the Fed is cutting rates and there is no recession. And the economy has been solid. This bull market is just 25 months old and has returned 65%. Bull markets usually don’t just run out of gas after two years. In fact, the average bull market has lasted 50 months and returned 152%.
But stocks are expensive. The S&P currently sells at 22.3 times forward earnings compared to an average of 16 times over the last twenty years. The market returned 26% in 2023 and about 28% this year with two weeks to go. It might be tough for stocks to deliver another consecutive year of 20%-plus returns.
It may be that a lot of the easy upside is behind us. Stocks can still perform well, but they’ll probably have to earn it in 2025.
In this issue, I highlight a stock that is poised for a strong earnings rebound in 2025. It is a stock that bounces a lot between the highs and lows. And it is currently well below the high. It is also one of the best healthcare companies on the market at a time when the population is older than ever before and aging at warp speed.
It’s been a great year in the market with the S&P up 27%. And there is good reason for optimism about 2025.
We are in a bull market that began in October of 2022. Bull markets don’t usually run out of gas after just two years, especially recent ones. The Fed has begun a rate-cutting cycle that is likely to last for the next two years. Plus, the economy is solid and expected to get stronger. Rate cuts in a strong economy are unusual, but the combination should be great for stocks.
One sector may have a better 2025 prognosis than the overall market: Financial stocks have been on a tear since the summer. The Financial Select Sector SPDR Fund (XLF) is up 33% YTD and 22% since early August. Despite the recent spike, many financial stocks are still cheap after a decade and a half of underperformance.
Financial stocks are dependent on yield spreads, economic growth, and relaxed regulations. All those areas are improving or expected to improve as a result of the election.
In this issue, I highlight one of the highest-growth companies in an industry that is on the rise. It is the leading all-digital bank in the country. Unlike many other industry-leading stocks, it is still well below the high because of a recent temporary stumble which has likely only delayed its price spike.
We are in a bull market that began in October of 2022. Bull markets don’t usually run out of gas after just two years, especially recent ones. The Fed has begun a rate-cutting cycle that is likely to last for the next two years. Plus, the economy is solid and expected to get stronger. Rate cuts in a strong economy are unusual, but the combination should be great for stocks.
One sector may have a better 2025 prognosis than the overall market: Financial stocks have been on a tear since the summer. The Financial Select Sector SPDR Fund (XLF) is up 33% YTD and 22% since early August. Despite the recent spike, many financial stocks are still cheap after a decade and a half of underperformance.
Financial stocks are dependent on yield spreads, economic growth, and relaxed regulations. All those areas are improving or expected to improve as a result of the election.
In this issue, I highlight one of the highest-growth companies in an industry that is on the rise. It is the leading all-digital bank in the country. Unlike many other industry-leading stocks, it is still well below the high because of a recent temporary stumble which has likely only delayed its price spike.
The election is changing things.
The difference is the expectation of stronger economic growth. As a result, new sectors have emerged as market leaders. Cyclical sectors have taken off. Financial, energy, and consumer discretionary sectors are leading the market. And this changing dynamic is likely just in the very early stages.
In this issue, I will focus on an opportunity in the financial sector.
Financial stocks, of which banks make up a big part, generally make profits from the spread between the cost of funds, mostly short-term rates, and what they charge for loans. Higher spreads mean more profits.
The Fed has begun a rate cutting cycle that will likely last for two years. Banks also need a good economy with strong loan demand. The better economic prognosis after the election is bullish. Plus, there is likely to be a much friendlier regulatory environment for banks and financial companies in the new administration.
In this issue, I highlight one of the highest-growth major financial companies that will surely benefit from the improving dynamic going forward. It is the leading all-digital bank in the country. Unlike many other industry-leading stocks, it is still well below the high because of a recent temporary stumble, and a price spike should be ahead.
The difference is the expectation of stronger economic growth. As a result, new sectors have emerged as market leaders. Cyclical sectors have taken off. Financial, energy, and consumer discretionary sectors are leading the market. And this changing dynamic is likely just in the very early stages.
In this issue, I will focus on an opportunity in the financial sector.
Financial stocks, of which banks make up a big part, generally make profits from the spread between the cost of funds, mostly short-term rates, and what they charge for loans. Higher spreads mean more profits.
The Fed has begun a rate cutting cycle that will likely last for two years. Banks also need a good economy with strong loan demand. The better economic prognosis after the election is bullish. Plus, there is likely to be a much friendlier regulatory environment for banks and financial companies in the new administration.
In this issue, I highlight one of the highest-growth major financial companies that will surely benefit from the improving dynamic going forward. It is the leading all-digital bank in the country. Unlike many other industry-leading stocks, it is still well below the high because of a recent temporary stumble, and a price spike should be ahead.
The election of Donald Trump has altered the trajectory of the economy and the market.
Investors perceive his election will deliver stronger economic growth, primarily through deregulation and tax cuts. Although interest rates spiked higher on the expectation of a stronger economy, the market views the revised prognosis as overwhelmingly bullish, so far.
The new administration will employ drastically different policies that will have a significant effect on different sectors and can’t be ignored. The most obvious sector beneficiary of the new administration is energy.
A huge beneficiary will be natural gas exports. The U.S. has recently become the world’s second-largest exporter of natural gas. Exporters ideally sell cheap American gas overseas where it fetches a much higher price. More production and cheaper domestic prices are ideal for exporters. At the same time, the new administration is likely to encourage as much natural gas exporting as possible.
In this issue, I highlight a company that runs the largest liquid natural gas (LNG) export facility in the country. It is a subsidiary of existing portfolio position Cheniere Energy (LNG), which is up 15% since the election. It pays a huge income and still sells at a reasonable price.
Investors perceive his election will deliver stronger economic growth, primarily through deregulation and tax cuts. Although interest rates spiked higher on the expectation of a stronger economy, the market views the revised prognosis as overwhelmingly bullish, so far.
The new administration will employ drastically different policies that will have a significant effect on different sectors and can’t be ignored. The most obvious sector beneficiary of the new administration is energy.
A huge beneficiary will be natural gas exports. The U.S. has recently become the world’s second-largest exporter of natural gas. Exporters ideally sell cheap American gas overseas where it fetches a much higher price. More production and cheaper domestic prices are ideal for exporters. At the same time, the new administration is likely to encourage as much natural gas exporting as possible.
In this issue, I highlight a company that runs the largest liquid natural gas (LNG) export facility in the country. It is a subsidiary of existing portfolio position Cheniere Energy (LNG), which is up 15% since the election. It pays a huge income and still sells at a reasonable price.
This country has a massive shortage of housing.
It is estimated that the current demand for homes exceeds the national supply by a whopping 4.5 million. The shortfall has caused the median U.S. home price to double since 2011 and soar a staggering 40% just since the pandemic. In many areas, prices have increased a lot more.
High prices combined with the highest mortgage rates in decades have made housing unaffordable. Zillow estimates that only 15.1% of current non-homeowner households can afford a typical mortgage.
But there is reason to believe the housing problems will get a lot better in the years ahead.
Mortgage rates are falling. The average U.S. 30-year fixed mortgage rate has fallen to 6.6% from 7.2% this past May and 7.8% a year ago. And rates are likely to continue to trend lower from multi-decade highs in the years ahead. Prices are coming down too. The average U.S. home price has declined about 7% since the beginning of last year.
While the situation is likely to improve, the supply/demand imbalance will likely remain for several years. That’s a problem for the housing market and economy to work through. But it’s good news for homebuilders. New homes should be in high demand for years to come, and sales should increase with the improving conditions.
In this issue, I highlight one of the best homebuilders on the market. The stock has been a stellar performer as investors realize the opportunity. But it is still reasonably valued and has momentum. It should provide a covered call opportunity soon.
It is estimated that the current demand for homes exceeds the national supply by a whopping 4.5 million. The shortfall has caused the median U.S. home price to double since 2011 and soar a staggering 40% just since the pandemic. In many areas, prices have increased a lot more.
High prices combined with the highest mortgage rates in decades have made housing unaffordable. Zillow estimates that only 15.1% of current non-homeowner households can afford a typical mortgage.
But there is reason to believe the housing problems will get a lot better in the years ahead.
Mortgage rates are falling. The average U.S. 30-year fixed mortgage rate has fallen to 6.6% from 7.2% this past May and 7.8% a year ago. And rates are likely to continue to trend lower from multi-decade highs in the years ahead. Prices are coming down too. The average U.S. home price has declined about 7% since the beginning of last year.
While the situation is likely to improve, the supply/demand imbalance will likely remain for several years. That’s a problem for the housing market and economy to work through. But it’s good news for homebuilders. New homes should be in high demand for years to come, and sales should increase with the improving conditions.
In this issue, I highlight one of the best homebuilders on the market. The stock has been a stellar performer as investors realize the opportunity. But it is still reasonably valued and has momentum. It should provide a covered call opportunity soon.
There is a colossal housing shortage in this country.
A decade of underbuilding in the housing industry following the financial crisis has left the industry unable to meet the needs of the growing population. It is estimated that the demand for homes exceeds the current national supply by a whopping 4.5 million.
The jilted supply/demand dynamic has caused the median U.S. home price to soar a staggering 40% just since the pandemic. In addition, mortgage rates have soared to the highest level in two decades. The prices and mortgage rates are making housing unaffordable for vast numbers of potential buyers. Sellers are unwilling to trade up and get a higher mortgage rate.
There aren’t enough new homes, and existing homes aren’t coming on the market either. Buyers can’t buy and sellers won’t sell. But there is reason to believe the housing problems will get a lot better in the years ahead.
While the situation is likely to improve, the supply/demand imbalance will likely remain for several years. That’s a problem for the housing market and economy to work through. But it’s good news if you’re a homebuilder. New homes should be in high demand for years to come, and sales should increase with the improving conditions.
In this issue, I highlight the premier luxury home builder in the U.S. The stock has the best track record of all large homebuilders, and the company is in an ideal position to benefit from high demand and increasing buying in the years ahead.
A decade of underbuilding in the housing industry following the financial crisis has left the industry unable to meet the needs of the growing population. It is estimated that the demand for homes exceeds the current national supply by a whopping 4.5 million.
The jilted supply/demand dynamic has caused the median U.S. home price to soar a staggering 40% just since the pandemic. In addition, mortgage rates have soared to the highest level in two decades. The prices and mortgage rates are making housing unaffordable for vast numbers of potential buyers. Sellers are unwilling to trade up and get a higher mortgage rate.
There aren’t enough new homes, and existing homes aren’t coming on the market either. Buyers can’t buy and sellers won’t sell. But there is reason to believe the housing problems will get a lot better in the years ahead.
While the situation is likely to improve, the supply/demand imbalance will likely remain for several years. That’s a problem for the housing market and economy to work through. But it’s good news if you’re a homebuilder. New homes should be in high demand for years to come, and sales should increase with the improving conditions.
In this issue, I highlight the premier luxury home builder in the U.S. The stock has the best track record of all large homebuilders, and the company is in an ideal position to benefit from high demand and increasing buying in the years ahead.
A new era has begun.
Most of the last two years have been an environment of rising and high interest rates and technology sector dominance. Now, we are entering a period of falling interest rates and a slowing economy. The new stage will bring different winners and losers.
The previously beleaguered interest rate-sensitive stocks and defensive stocks ignited and began to lead the overall market higher as technology pulled back. Since the summer, this new trend has been confirmed. And it is unlikely to be a mere short-term gyration but rather the beginning of a new environment that should last for some time.
In this issue, I highlight a great monthly income stock. The yield is massive, and it provides a high income in an uncertain market. The stock also can provide great price performance when the interest rate cycle goes its way. This point in the cycle provides a great opportunity to get a high income and total return on the right side of a pronounced market shift ahead.
Most of the last two years have been an environment of rising and high interest rates and technology sector dominance. Now, we are entering a period of falling interest rates and a slowing economy. The new stage will bring different winners and losers.
The previously beleaguered interest rate-sensitive stocks and defensive stocks ignited and began to lead the overall market higher as technology pulled back. Since the summer, this new trend has been confirmed. And it is unlikely to be a mere short-term gyration but rather the beginning of a new environment that should last for some time.
In this issue, I highlight a great monthly income stock. The yield is massive, and it provides a high income in an uncertain market. The stock also can provide great price performance when the interest rate cycle goes its way. This point in the cycle provides a great opportunity to get a high income and total return on the right side of a pronounced market shift ahead.
Updates
Selling accelerated this week after last week was the worst since September. The S&P is down 4% YTD and at its lowest level in more than five months. The Nasdaq index is in correction territory, down more than 10% from the high.
The big issue seems to be tariffs. Tariffs on China, Canada, and Mexico are escalating. The new Canadian Prime Minister also appears to be taking a hard line, and it looks like the trade issues won’t be resolved for a while. But it’s also the fact that tariffs are hitting the economy at a vulnerable point as fears of a slowing economy are growing.
The big issue seems to be tariffs. Tariffs on China, Canada, and Mexico are escalating. The new Canadian Prime Minister also appears to be taking a hard line, and it looks like the trade issues won’t be resolved for a while. But it’s also the fact that tariffs are hitting the economy at a vulnerable point as fears of a slowing economy are growing.
Tariffs have officially arrived. And the market doesn’t like them one bit.
On Tuesday, the Trump administration imposed 25% tariffs on Mexico and Canada and raised the level from 10% to 20% on China. Stocks fell as of midday on Tuesday, but not dramatically. It’s unwelcome news to a market that was already dealing with still-sticky inflation and diminished economic growth expectations.
On Tuesday, the Trump administration imposed 25% tariffs on Mexico and Canada and raised the level from 10% to 20% on China. Stocks fell as of midday on Tuesday, but not dramatically. It’s unwelcome news to a market that was already dealing with still-sticky inflation and diminished economic growth expectations.
After a strong start to the year, February was a down month for the S&P 500. The index is just a little over 1% higher YTD. But the news is better than it may seem.
Sure, the market has been struggling. But it’s only because of technology, which is down over 5% YTD. Nine of the other ten sectors in the S&P are positive for the year. Some sectors are having very good years as Health Care is up over 8% and Consumer Staples and Financials are up over 7% YTD.
Sure, the market has been struggling. But it’s only because of technology, which is down over 5% YTD. Nine of the other ten sectors in the S&P are positive for the year. Some sectors are having very good years as Health Care is up over 8% and Consumer Staples and Financials are up over 7% YTD.
As I mentioned in this week’s update, CEG has some technical support around the $225 per share range. The stock had been flying high but has been under considerable pressure recently. CEG (currently around $227 per share) is down over 35% from the high made in late January.
Stocks are taking a hit. It was an ugly day last Friday and there was more of the same on Tuesday. Should we expect more?
While the S&P 500 has stalled at about the same level since late November, it’s been more exciting under the hood.
The market indexes have stalled mostly because of technology. Those stocks still haven’t fully recovered from the DeepSeek plunge in late January. At the same time, earnings for the rest of the market are catching up.
The market indexes have stalled mostly because of technology. Those stocks still haven’t fully recovered from the DeepSeek plunge in late January. At the same time, earnings for the rest of the market are catching up.
The market has been sideways for the past couple of months. It’s up YTD because of a rebound from the December swoon. But the S&P is still at about the same level it was in early December.
Earnings have been solid, averaging about 11% growth in the quarter as tech earnings moderate and the rest of the market catches up. Earnings are expected to average about 14% in 2025. But the solid earnings quarter is only helping the market hold serve in the face of higher interest rate expectations, tariffs, and a strong dollar.
Earnings have been solid, averaging about 11% growth in the quarter as tech earnings moderate and the rest of the market catches up. Earnings are expected to average about 14% in 2025. But the solid earnings quarter is only helping the market hold serve in the face of higher interest rate expectations, tariffs, and a strong dollar.
Stocks continue to move higher despite more tariff news. A 25% tariff was announced over the weekend on all imported steel. But the market is so far taking the news in stride during a good earnings season.
We’ll see what happens with the tariffs. But whatever happens with this latest round, it is most likely that tariff issues will remain at least a background story for most of this year. Meanwhile, stocks are being buoyed by strong earnings.
We’ll see what happens with the tariffs. But whatever happens with this latest round, it is most likely that tariff issues will remain at least a background story for most of this year. Meanwhile, stocks are being buoyed by strong earnings.
The market is continuing its bumpy ride higher. Despite a barrage of concerns, 10 of the 11 S&P 500 stocks sectors are higher year to date.
It’s one thing after another. But stocks keep inching higher.
January featured the interest rate scare, as the ten-year Treasury hit the highest level since 2023, and the DeepSeek news, which called AI spending into question and sent related stocks reeling. Yet the S&P 500 finished the month up 2.7% with 10 of the 11 sectors higher for January. This week features more potential market-moving issues.
January featured the interest rate scare, as the ten-year Treasury hit the highest level since 2023, and the DeepSeek news, which called AI spending into question and sent related stocks reeling. Yet the S&P 500 finished the month up 2.7% with 10 of the 11 sectors higher for January. This week features more potential market-moving issues.
The catalyst that has driven this market higher for more than two years got punched in the face on Monday. Is it the end of the gravy train or just an overreaction?
Stocks came crashing down on Monday. The S&P 500 was down almost 2% and lost most of this year’s gains in one day. The tech-laden Nasdaq index fell more than 3%. It was all because of some upstart Chinese company.
Stocks came crashing down on Monday. The S&P 500 was down almost 2% and lost most of this year’s gains in one day. The tech-laden Nasdaq index fell more than 3%. It was all because of some upstart Chinese company.
While the market news is inundated with Trump stories as he has issued a massive number of executive orders on his first day in office, the real market catalyst right now actually started last week.
There were a slew of executive orders affecting the energy industry but no real surprises. The improving story remains essentially the same since the election. There was likely some relief that large tariffs have not been announced, at least so far. But the Trump news is overshadowing last week’s market-altering news.
There were a slew of executive orders affecting the energy industry but no real surprises. The improving story remains essentially the same since the election. There was likely some relief that large tariffs have not been announced, at least so far. But the Trump news is overshadowing last week’s market-altering news.
Alerts
A week ago, the market was teetering on the brink. But it teetered in the right direction.
The benchmark ten-year Treasury rate had soared above 4.8%, dangerously close to the late 2023 peak of about 5%. December CPI inflation was reported last week. A bad number could have thrust the 10-year rate above the peak, almost certainly prompting a selloff in stocks. But Wall Street was happy with the number and things went the other way.
The benchmark ten-year Treasury rate had soared above 4.8%, dangerously close to the late 2023 peak of about 5%. December CPI inflation was reported last week. A bad number could have thrust the 10-year rate above the peak, almost certainly prompting a selloff in stocks. But Wall Street was happy with the number and things went the other way.
Things are getting dicey in the market.
The problem is interest rates. Growth expectations are strong following the election. At the same time, inflation has been sticky and not moving lower. Investors were already expecting higher rates for longer when they got a gut punch with last week’s strong jobs report.
The problem is interest rates. Growth expectations are strong following the election. At the same time, inflation has been sticky and not moving lower. Investors were already expecting higher rates for longer when they got a gut punch with last week’s strong jobs report.
Uh oh. The rally is in trouble.
The market sort of wobbled into January after a rough December. It started good but things turned a little ugly last week after a better-than-expected jobs report and worries about sticky inflation.
The market sort of wobbled into January after a rough December. It started good but things turned a little ugly last week after a better-than-expected jobs report and worries about sticky inflation.
The market sobered up in December after a big post-election rally in November. The S&P fell 2.5% in the last month of the year. But January has started out with stocks up 2.2% already.
Technology is driving the market higher. The sector is taking off after Nvidia (NVDA) issued bullish statements about demand for its artificial intelligence chips. AI is a huge growth catalyst for the market’s largest sector and has proven it can drive the indexes higher all by itself. In fact, technology has been the primary catalyst for the S&P over most of this bull market. But things might be changing.
Technology is driving the market higher. The sector is taking off after Nvidia (NVDA) issued bullish statements about demand for its artificial intelligence chips. AI is a huge growth catalyst for the market’s largest sector and has proven it can drive the indexes higher all by itself. In fact, technology has been the primary catalyst for the S&P over most of this bull market. But things might be changing.
The year 2024 was another great year for stocks. The S&P was up over 23% for the year. It’s a nice addition to the 26% return last year. It is the first back-to-back 20%-plus return years for the index since 1998.
But the year ended on a sour note. Usually, good years in the market finish strong. But not this time. True, the S&P 500 was down less than 2% in December. But that’s only because the big tech companies are still doing okay. The rest of the market had a terrible month.
But the year ended on a sour note. Usually, good years in the market finish strong. But not this time. True, the S&P 500 was down less than 2% in December. But that’s only because the big tech companies are still doing okay. The rest of the market had a terrible month.
And we were having such a good time. Stocks were killing it in November after the election. But December turned out to be a real stinker.
Sure, the S&P 500 is only down about 1% over the past month. But that’s only because the big tech companies are still doing okay. The rest of the market is getting slapped around. Eight of the eleven S&P sectors are down in December. And many individual stocks are having a terrible month.
Sure, the S&P 500 is only down about 1% over the past month. But that’s only because the big tech companies are still doing okay. The rest of the market is getting slapped around. Eight of the eleven S&P sectors are down in December. And many individual stocks are having a terrible month.
It looks like the election euphoria has run out of gas. The market has digested the election and is now back to business as usual.
The Dow Jones Industrial Average has lost ground for nine consecutive sessions. Most of the S&P 500 sectors have been down over the past month. Of course, the S&P is still within a whisker of the high. It hasn’t pulled back. But it hasn’t gone up in a while either.
The Dow Jones Industrial Average has lost ground for nine consecutive sessions. Most of the S&P 500 sectors have been down over the past month. Of course, the S&P is still within a whisker of the high. It hasn’t pulled back. But it hasn’t gone up in a while either.
The post-election bounce is over. But stocks could still finish the year higher. These are good times. The S&P 500 is up about 30% year to date. This adds to a 26% return for the index in 2023.
These are good times. The S&P 500 is up 6% since the election and 27% year to date. This adds to a 26% return for the index in 2023.
The market is seemingly making new highs every day as investors expect a higher level of economic growth going forward because of the election. We’ll see if the economic growth materializes. But this optimistic economy expectation comes while the Fed has begun a rate-cutting cycle that will likely last the next two years. Why wouldn’t the market be partying?
The market is seemingly making new highs every day as investors expect a higher level of economic growth going forward because of the election. We’ll see if the economic growth materializes. But this optimistic economy expectation comes while the Fed has begun a rate-cutting cycle that will likely last the next two years. Why wouldn’t the market be partying?
The market has been just great! The S&P 500 was up 5.7% in November and now has a 26.47% year-to-date return. This adds to the 26% market return last year.
Stocks were riding high, and the election provided a further boost as investors expect a higher level of economic growth going forward. The cyclical stocks have led the recent charge. The best-performing market sectors since the election are finance, consumer discretionary, and energy.
Stocks were riding high, and the election provided a further boost as investors expect a higher level of economic growth going forward. The cyclical stocks have led the recent charge. The best-performing market sectors since the election are finance, consumer discretionary, and energy.
After a brief dip following the post-election euphoria, the market is right back to a new high.
So far, the promise of stronger economic growth is more than offsetting the likelihood of higher interest rates for longer. As a result, new sectors have emerged as market leaders. Cyclical sectors have taken off. The financial, energy, and consumer discretionary sectors are leading the market. Those sectors are up 9.3%, 5.7%, and 8.6% respectively in the three weeks since the election.
So far, the promise of stronger economic growth is more than offsetting the likelihood of higher interest rates for longer. As a result, new sectors have emerged as market leaders. Cyclical sectors have taken off. The financial, energy, and consumer discretionary sectors are leading the market. Those sectors are up 9.3%, 5.7%, and 8.6% respectively in the three weeks since the election.
After a huge post-election rally, the market leveled off.
The S&P 500 soared 5% in the three days after the election. Since then, it hasn’t pulled back with any significance, but it has stopped going up.
The S&P 500 soared 5% in the three days after the election. Since then, it hasn’t pulled back with any significance, but it has stopped going up.