Issues
Stocks have been very resilient. The market has proven a lot of naysayers wrong. But prices are high, and uncertainty abounds.
Tariffs won’t be a disaster, but there will still be more headlines and uncertainty in the months ahead. The economy is okay, but it’s not great. Interest rates are still stubbornly high. And now the Iran conflict is thrown into the mix along with the tariffs and the economy. Meanwhile, the market indexes are hovering near the high and most stocks are pricey.
Several portfolio positions have had strong rallies in the recovery and are generating high call premiums. The high strike prices guarantee a strong total return if the stocks are called. The high premiums provide a great way to lock in the recent market good fortune by generating a high income from call premiums.
Let’s take what the market is giving. Right now, it’s giving a high income. Tomorrow, who knows? In this issue, I highlight a covered call in Qualcomm (QCOM). It is the sixth call sold on the position since the stock was added to the portfolio four years ago. It’s a great time to prime the pump for income once again.
Tariffs won’t be a disaster, but there will still be more headlines and uncertainty in the months ahead. The economy is okay, but it’s not great. Interest rates are still stubbornly high. And now the Iran conflict is thrown into the mix along with the tariffs and the economy. Meanwhile, the market indexes are hovering near the high and most stocks are pricey.
Several portfolio positions have had strong rallies in the recovery and are generating high call premiums. The high strike prices guarantee a strong total return if the stocks are called. The high premiums provide a great way to lock in the recent market good fortune by generating a high income from call premiums.
Let’s take what the market is giving. Right now, it’s giving a high income. Tomorrow, who knows? In this issue, I highlight a covered call in Qualcomm (QCOM). It is the sixth call sold on the position since the stock was added to the portfolio four years ago. It’s a great time to prime the pump for income once again.
It’s been a wild market so far this year. The S&P 500 has gone from the cusp of a bear market to within 5% of the all-time high in just seven weeks.
Uncertainty remains. A negative development could still roil the market on any day. Negotiations will likely take more twists and turns in the weeks and months ahead. But investors appear, at this point, to believe that the tariff situation won’t blow up. The fear of Armageddon is being removed.
But there’s still the economy. It could gain steam or slow toward recession. We are in a place, at least for a while, where anything can happen. It’s tough to pick a horse amid such varying possibilities. Fortunately, there is a trend to bank on that will thrive regardless of the near-term gyrations of the market or economy.
Artificial intelligence is a massive growth catalyst that will endure and thrive in any environment. Investors temporarily forgot all about it. It’s a generational phenomenon that hasn’t gone away. It just took a break. Now, those stocks are soaring back.
In this issue, I highlight a stock that is likely to benefit in the months and years ahead. It is still well off the high with good momentum and has a huge catalyst for growth in the months and years ahead.
Uncertainty remains. A negative development could still roil the market on any day. Negotiations will likely take more twists and turns in the weeks and months ahead. But investors appear, at this point, to believe that the tariff situation won’t blow up. The fear of Armageddon is being removed.
But there’s still the economy. It could gain steam or slow toward recession. We are in a place, at least for a while, where anything can happen. It’s tough to pick a horse amid such varying possibilities. Fortunately, there is a trend to bank on that will thrive regardless of the near-term gyrations of the market or economy.
Artificial intelligence is a massive growth catalyst that will endure and thrive in any environment. Investors temporarily forgot all about it. It’s a generational phenomenon that hasn’t gone away. It just took a break. Now, those stocks are soaring back.
In this issue, I highlight a stock that is likely to benefit in the months and years ahead. It is still well off the high with good momentum and has a huge catalyst for growth in the months and years ahead.
It’s been a tough market. The S&P started this week down about 6% for the month of April, over 10% YTD, and over 14% from the high. And that was before Monday’s selloff. It is entirely possible that the market falls back to a new low and an official bear market.
The tariff uncertainty is continuing, and it could get worse. A bad headline could roil the market any day. We’re not out of the woods yet. The market could get worse before it gets better. But it will get better at some point.
Investing for dividends and income is a longer-term proposition. Investors typically don’t jump in and out of these stocks in a short time. You have to hold the stock long enough for the dividend to make a difference. Although the market remains troubling in the near term, there are some great opportunities for longer-term investors.
The tariff uncertainty is continuing, and it could get worse. A bad headline could roil the market any day. We’re not out of the woods yet. The market could get worse before it gets better. But it will get better at some point.
Investing for dividends and income is a longer-term proposition. Investors typically don’t jump in and out of these stocks in a short time. You have to hold the stock long enough for the dividend to make a difference. Although the market remains troubling in the near term, there are some great opportunities for longer-term investors.
After falling into correction territory earlier this month, the S&P 500 came off the bottom and has been trending higher. Is that the end of the selling? I don’t think the market has decided yet.
Some tariff clarity could arrive soon. Stocks rallied strongly to start the week partially on news that pending tariffs will be more “targeted.” Technology stocks also rallied on the perception of higher-than-expected AI demand. But the market is very headline sensitive. And the headlines are likely to keep on coming.
If I had to bet, I would say the market probably made the bottom for now and is more likely to trend higher. But I don’t have a high degree of confidence right now. A couple of negative headlines could send stocks plunging to new lows.
There are some select stocks that are actually near the 52-week high. I’m more comfortable selling a covered call on a stock with recent strong performance than initiating a new stock position at this point. In this issue, I highlight a covered call for the biopharmaceutical company AbbVie Inc. (ABBV).
Some tariff clarity could arrive soon. Stocks rallied strongly to start the week partially on news that pending tariffs will be more “targeted.” Technology stocks also rallied on the perception of higher-than-expected AI demand. But the market is very headline sensitive. And the headlines are likely to keep on coming.
If I had to bet, I would say the market probably made the bottom for now and is more likely to trend higher. But I don’t have a high degree of confidence right now. A couple of negative headlines could send stocks plunging to new lows.
There are some select stocks that are actually near the 52-week high. I’m more comfortable selling a covered call on a stock with recent strong performance than initiating a new stock position at this point. In this issue, I highlight a covered call for the biopharmaceutical company AbbVie Inc. (ABBV).
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.
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.
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.
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.
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.
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.
New technology is driving huge demand growth in old technology. The growth of artificial intelligence, electric vehicles, and semiconductor manufacturing will generate huge growth in electricity.
After being stagnant for most of the last two decades, electricity demand is soaring. Most of the increasing electricity demand (from data centers, EVs, and chip manufacturing) is coming from climate-conscious technology companies that will likely try to secure carbon-friendly power sources whenever possible.
Companies that can provide low-carbon electricity generation should be the primary beneficiaries of this increasing electricity demand. Opportunity is being created for certain companies that also tend to be very recession-resistant at a time when the economy is slowing.
But there is one utility that stands above all others in terms of the current opportunity. And it is highlighted in this month’s issue.
After being stagnant for most of the last two decades, electricity demand is soaring. Most of the increasing electricity demand (from data centers, EVs, and chip manufacturing) is coming from climate-conscious technology companies that will likely try to secure carbon-friendly power sources whenever possible.
Companies that can provide low-carbon electricity generation should be the primary beneficiaries of this increasing electricity demand. Opportunity is being created for certain companies that also tend to be very recession-resistant at a time when the economy is slowing.
But there is one utility that stands above all others in terms of the current opportunity. And it is highlighted in this month’s issue.
The S&P spent most of the first half of July setting new highs. But that changed last week. The technology sector sold off on news of new AI chip export restrictions to China. The S&P fell about 2% for the week, giving up most of the gains for July. It may be a blip. It probably is. But the market is high, and stocks showed vulnerability to bad headlines.
A flatter or down market going forward makes income more valuable. The cash register continues to ring regardless of short-term market gyrations. At the same time, many income stocks are still cheap, and interest rates are likely to trend lower from here.
Some of the very best income stocks are in the energy sector. After recent price shocks and other problems in the energy sector, investors are coming around to realizing energy is a strong business that isn’t going anywhere for a long time.
In this issue, I highlight one of the best natural gas companies on the market. It is a newly formed company in the business of exporting abundant and cheap American natural gas overseas. It’s big business. In a short time, this company has become one of the world’s biggest natural gas exporters.
A flatter or down market going forward makes income more valuable. The cash register continues to ring regardless of short-term market gyrations. At the same time, many income stocks are still cheap, and interest rates are likely to trend lower from here.
Some of the very best income stocks are in the energy sector. After recent price shocks and other problems in the energy sector, investors are coming around to realizing energy is a strong business that isn’t going anywhere for a long time.
In this issue, I highlight one of the best natural gas companies on the market. It is a newly formed company in the business of exporting abundant and cheap American natural gas overseas. It’s big business. In a short time, this company has become one of the world’s biggest natural gas exporters.
Updates
Uncertainty is growing in a market perched near the high.
Tariffs are front and center again. The July 9 deadline, which began the market rally from the low when the administration issued a 90-day extension, is rapidly approaching. The deadline raises many of the issues the market hated back in April. Stocks started the week on a down note in anticipation.
Tariffs are front and center again. The July 9 deadline, which began the market rally from the low when the administration issued a 90-day extension, is rapidly approaching. The deadline raises many of the issues the market hated back in April. Stocks started the week on a down note in anticipation.
The S&P 500 reached a new all-time high last week. And the market is moving higher to start this week.
The market is being propelled higher by technology as the artificial intelligence trade turned hot again. Technology had been dragging the market lower all year until recently after leading it higher for most of the bull market. The sector sold off after the DeepSeek news in late January and then took a further hit with the tariff panic in April.
The market is being propelled higher by technology as the artificial intelligence trade turned hot again. Technology had been dragging the market lower all year until recently after leading it higher for most of the bull market. The sector sold off after the DeepSeek news in late January and then took a further hit with the tariff panic in April.
The market has been bouncy in recent days but is still close to the high. Prices are high, but uncertainty is growing.
Stocks sold off on Friday as Israel and Iran exchanged bombings. But the market rose on Monday as investors are expecting a quick end to the conflict. Anything can happen. The conflict adds another degree of uncertainty beyond the tariffs and the economy.
Stocks sold off on Friday as Israel and Iran exchanged bombings. But the market rose on Monday as investors are expecting a quick end to the conflict. Anything can happen. The conflict adds another degree of uncertainty beyond the tariffs and the economy.
After bouncing around for a few weeks, the S&P is moving higher again. The index is now just about 2% below the high and may rally this month.
The tariff story continues to play out. The market made a huge recovery after the initial fears in April as investors wrote off a disaster scenario. Now, talks are dragging on, and the market still can’t move completely past the issue. But good economic news was a pleasant surprise.
The tariff story continues to play out. The market made a huge recovery after the initial fears in April as investors wrote off a disaster scenario. Now, talks are dragging on, and the market still can’t move completely past the issue. But good economic news was a pleasant surprise.
The market has leveled off since the huge recovery from the tariff Armageddon fears. And now, who knows.
The sticky issue to start the week is increasing trade tensions with China. A war of words is escalating between the two governments and threats are being made by both sides. It is being reported that President Trump will speak with Chinese President Xi today or later this week. Hopefully the two leaders will bring down the temperature.
The sticky issue to start the week is increasing trade tensions with China. A war of words is escalating between the two governments and threats are being made by both sides. It is being reported that President Trump will speak with Chinese President Xi today or later this week. Hopefully the two leaders will bring down the temperature.
Last week was another up week for the S&P 500. The index has made up all the losses since April and is now in positive territory for the year.
After a multi-month barrage of relentlessly negative headlines, the S&P is within 3% of the all-time high. Seven of the eleven market sectors are higher YTD, and two of the negative sectors are down less than 1% for the year so far.
After a multi-month barrage of relentlessly negative headlines, the S&P is within 3% of the all-time high. Seven of the eleven market sectors are higher YTD, and two of the negative sectors are down less than 1% for the year so far.
The market is booming. The worst appears to be over, and sustained upside from here is entirely possible.
The S&P 500 closed on Friday up about 17% over the last month. The index also moved to within 8% of the all-time high. And that was before the huge rally on Monday.
The Trump administration announced huge progress with China in trade talks over the weekend. The two sides reportedly agreed to a 90-day pause on tariffs, with duties set to drop 115% on both sides by Wednesday. President Trump and the Chinese president are likely to talk in the coming days. This follows the announcement of a comprehensive deal with the U.K. last week.
The S&P 500 closed on Friday up about 17% over the last month. The index also moved to within 8% of the all-time high. And that was before the huge rally on Monday.
The Trump administration announced huge progress with China in trade talks over the weekend. The two sides reportedly agreed to a 90-day pause on tariffs, with duties set to drop 115% on both sides by Wednesday. President Trump and the Chinese president are likely to talk in the coming days. This follows the announcement of a comprehensive deal with the U.K. last week.
Things are certainly looking up in the market. The S&P 500 had an epic nine-day run of positive gains, the longest such streak in more than twenty years. The index rose over 10% during the streak. What’s going on?
The rally began after President Trump indicated a de-escalation of the trade war with China. There are ongoing negotiations with the other trading partners during the 90-day pause initiated on April 9th. A perception is building that the worst of the tariff uncertainty is behind. Stocks also got a boost from earnings and economic news.
The rally began after President Trump indicated a de-escalation of the trade war with China. There are ongoing negotiations with the other trading partners during the 90-day pause initiated on April 9th. A perception is building that the worst of the tariff uncertainty is behind. Stocks also got a boost from earnings and economic news.
This is a huge week for earnings and economic news. Maybe, just maybe, the market will be driven by something other than tariff news.
This week, 180 of the 500 S&P companies report earnings, including several of the big tech companies. On Wednesday, first-quarter GDP will be released. Jobs and inflation reports also come out this week. The consensus expectation for first-quarter GDP is 0.10%, way down from 2.4% in the fourth quarter.
This week, 180 of the 500 S&P companies report earnings, including several of the big tech companies. On Wednesday, first-quarter GDP will be released. Jobs and inflation reports also come out this week. The consensus expectation for first-quarter GDP is 0.10%, way down from 2.4% in the fourth quarter.
The market got a reprieve last week. But we’re probably not out of the woods yet.
The S&P 500 came about as close to a bear market as you can get early last week. In fact, it hit the 20% mark down from the high on an intraday basis twice. But it’s not an official bear market until the closing price falls below 20%. The S&P seemed to have one foot on a bear market and the other foot on a banana peel. Then last Wednesday happened.
The S&P 500 came about as close to a bear market as you can get early last week. In fact, it hit the 20% mark down from the high on an intraday basis twice. But it’s not an official bear market until the closing price falls below 20%. The S&P seemed to have one foot on a bear market and the other foot on a banana peel. Then last Wednesday happened.
It’s a disaster. There was a range of possibilities with the tariffs. The market’s worst fears came to fruition and the S&P crashed more than 5% on consecutive days for the first time since the onset of the pandemic.
Last week the Trump administration announced reciprocal tariffs on just about every nation that trades with the U.S. The tariffs were widespread and severe in many cases. That wasn’t what the market wanted. The S&P is now within a whisker of an official bear market (down 20% from the high on a closing basis). The technology-laden Nasdaq is already there.
Last week the Trump administration announced reciprocal tariffs on just about every nation that trades with the U.S. The tariffs were widespread and severe in many cases. That wasn’t what the market wanted. The S&P is now within a whisker of an official bear market (down 20% from the high on a closing basis). The technology-laden Nasdaq is already there.
It’s ugly again. The market recovered from the 10% correction bottom earlier this month. But it plunged again below the earlier low on Monday as tariff issues have taken center stage.
Hopefully, stocks will bounce off the low again, but it isn’t looking good right now. The tariff deadline is this week, and uncertainties abound. It is yet unclear how many countries will be included in the reciprocal tariffs and to what extent there will be exceptions. The market may be happier about things by the end of the week. But if it isn’t, stocks will likely go lower.
Hopefully, stocks will bounce off the low again, but it isn’t looking good right now. The tariff deadline is this week, and uncertainties abound. It is yet unclear how many countries will be included in the reciprocal tariffs and to what extent there will be exceptions. The market may be happier about things by the end of the week. But if it isn’t, stocks will likely go lower.
Alerts
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.
The idea is to sell a covered call, meaning you already own or you just purchased V on the buy recommendation.
The first issue of Cabot Income Advisor just came out yesterday. The idea is to sell a covered call, meaning you already own or you just purchased IIPR on the buy recommendation.