April 30, 2025

A Big Week After the Big Rally

What a difference a week makes. Just a week ago, the S&P was plunging back toward the low. But then the S&P rallied 4.5% and the Nasdaq soared 6.6% in the final four days of last week, erasing most of the index’s April losses.

Better tariff news was the catalyst. President Trump indicated a de-escalation of the trade war with China when he said the current 145% tariffs charged to that nation will “come down substantially.” He also said that he had no intention of firing the Fed Chairman. We may not be out of the woods yet, but the magnitude of the rally that followed reveals strong pent-up market upside beyond the tariff uncertainty.

This is also a huge week for earnings and economic news. Finally, the market may 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.

It’s an important week in determining what might lie beyond the tariff uncertainty. The consensus expectation is for first-quarter GDP to be barely positive, after 2.4% growth in the fourth quarter. GDP, along with the other numbers, may indicate if there is an economic problem ahead or if there isn’t and stocks have a green light to rally beyond the tariffs. The technology earnings reports will provide information on the state of AI spending and may help determine if the technology sector swoon is over or has further to go.

We might be through the worst of the tariff uncertainty. As investors look ahead, this week’s earnings and economic numbers should give an idea of what might be waiting in the wings.

Recent Activity

April 2
AGNC Investment Corporation (AGNC) – Rating change “BUY” to “HOLD”

April 9
Ally Financial Inc. (ALLY) – Rating change “BUY” to “HOLD”
Qualcomm Inc. (QCOM) – Rating change “BUY” to “HOLD”

April 16
AbbVie (ABBV) – Rating change “HOLD” to “BUY”

High Yield Tier

AGNC Investment Corporation (AGNC – yield 16.0%) – The mortgage REIT reported earnings last Tuesday that beat consensus estimates. The REIT is also easily earning the massive dividend. AGNC has jumped by over 11% since the report. The REIT reported wider spreads as the ten-year Treasury rate has moved higher again, and the Fed is likely to cut the fed funds rate several times this year, perhaps beginning in June. It also posted a total return for the stock of 7.8% in the first quarter. AGNC can’t stand up to a market like we’ve had recently with indiscriminate selling. But it should come back when the market stabilizes. Performance has been strong so far in the market recovery. HOLD

Brookfield Infrastructure Partners (BIP – yield 5.9%) – Yeah, it’s up and off the bottom. Just like the rest of the market. BIP should have been set up for strong relative performance in the recent market volatility. The problem is that interest rates spiked higher at the same time, which is bad for an MLP because it increases borrowing costs and narrows profits. BIP is having a crummy year after two before this. But the business is sound. And yet, the stock isn’t delivering. It’s off the lows, but it’s still miles below the early 2022 high. BIP will continue to be held for now as the price is near the 52-week low and should have a bounce in a decent market. (This security generates a K1 form at tax time.) HOLD

Cheniere Energy Partners, L.P. (CQP – yield 5.4%) – This NGL export partnership has held up very well under the circumstances. Sure, it’s down over 10% in April, along with most stocks. But it has still returned over 15% YTD while the market is down 6% over the same period. Global natural gas demand remains strong and growing, and Cheniere is the largest U.S. exporter. Regulations are coming down and gas production is being ramped up. It should be in a strong position for the rest of the year after surviving this market in fine shape. (This security generates a K1 form at tax time.) HOLD

Enterprise Product Partners (EPD – yield 6.8%) – Even this stable midstream energy partnership took a hit in the recent market. Nothing is safe when there is indiscriminate selling. But the stock price rebounded and quickly regained its footing. EPD has a slightly positive return YTD, which is a solid performance in this market. I expect EPD to move back toward the high and probably beyond when the market stabilizes. Enterprise reports earnings this week and could well get a boost after that. In the meantime, it pays you well to wait. (This security generates a K1 form at tax time.) BUY

FS KKR Capital Corp. (FSK – yield 13.8%) – This Business Development Company (BDC) is cyclical, having a portfolio of small companies, and it suffers when there is angst regarding the economy. It plunged along with everything else earlier this month. But it has come off the bottom recently. If a recession is avoided or the economic narrative doesn’t get ugly, FSK should be okay. It really pays you to wait things out with a better than 13% yield. It will continue to be held for now. Future performance will depend on the economy. HOLD

Main Street Capital Corporation (MAIN – yield 7.7%) – As a BDC, this story is very similar to that of FSK. Like just about everything else, it got pummeled early this month and has been rebounding since. The BDC has risen nicely over the last week. Main’s portfolio of companies not only makes high-interest loans, but it also takes equity stakes. The equity stakes are the primary reason the total returns have been better than just about every other BDC. If the economy hangs on, the BDC should continue to deliver, but if a slowing economy becomes an increasing problem, we’ll have to reevaluate. HOLD

ONEOK Inc. (OKE – yield 4.7%) – OKE tends to be more volatile than the other midstream companies in the portfolio. For much of the past few years, that has been a good thing. But lately it’s been a very bad thing. The stock price declined over 20% in April before recovering somewhat. But it’s still down 13% YTD. I’m very bullish on midstream energy companies over the longer term, especially the ones that specialize in natural gas. But OKE has shown no resilience in an ugly market that could get worse before it gets better. It was downgraded to HOLD until things turn around. ONEOK reports earnings this week. Hopefully, it gets a boost. HOLD

The Williams Companies, Inc. (WMB – yield 3.3%) – I’m very impressed with the resiliency of this midstream energy company stock. After all the recent market turmoil, WMB is only down about 3% from the high and has returned over 11% YTD. The stock took a hit after the DeepSeek report in late January. But it quickly rebounded and has been rock solid aside from that one blip. WMB will likely continue to march back toward the high and beyond unless the market rolls over again. But regardless, it should be a solid holding over the rest of the year. BUY

Dividend Growth Tier

AbbVie (ABBV – yield 3.4%) Earnings – ABBV has recovered a little more than half of the drop from earlier this month. The biopharmaceutical company reported earnings last week that beat expectations and then raised guidance for 2025. ABBV jumped over 3% on the day in a flat market. However, while tariffs haven’t affected pharmaceuticals yet, they are likely to come.

Tariffs wouldn’t hurt AbbVie too badly because most sales are in the U.S. But there is also the threat of the administration’s pledge to enforce international reference pricing, which lowers U.S. drug prices to those charged internationally. Immunology drugs, Skyrizi and Rinvoq, grew sales 65% in the quarter with revenue of $5.1 billion, which already replaces peak Humira revenues. The trajectory is great, but there could be some externally caused issues ahead. BUY

Ally Financial Inc. (ALLY – yield 3.6%) – This online banker has been bouncing around since late last summer. It had been near the high point of the recent range, but the market took it down earlier this month. Now, it’s moving higher again. If the economy deteriorates toward a recession or close to it, the stock will have more trouble. It deals primarily with auto loans, which are highly cyclical. However, a recession is still unlikely at this point. We’ll see how the economy looks over the rest of this year. But ALLY should have strong upside when the environment permits. HOLD

Broadcom Inc. (AVGO – yield 1.2%) – This superstar AI company certainly appears to have plenty of pent-up upside in a friendlier market. After last Monday’s market selloff, AVGO soared over 13% in the last four days of last week. At some point, the market will stabilize, technology will get hot again, and the market will muster lasting upside traction. When that happens, AVGO should once again take off like a rocket and make up for any lost time. This week is important as earnings from large technology companies may determine the near-term direction of the sector. I can’t say that the market or AVGO are out of the woods yet. But I’m highly confident that AVGO will be trading at a price a lot higher than it is now in a few months. BUY

Cheniere Energy, Inc. (LNG – yield 0.8%) Earnings – The liquid natural gas exporter stock has been spectacular under the circumstances. LNG had been strong ever since the November election as investors anticipated more natural gas exports, increased domestic production, and friendlier regulations. LNG did take a big dip earlier this month as the market ravaged everything, but it has made up all those losses and then some already. LNG is solid in all but the worst markets and should resume the upward trend when the market stabilizes. It has the look of a stock that wants to go higher. HOLD

Constellation Energy Corporation (CEG – yield 0.9%) – This nuclear provider of electricity is another stock that is proving strong chops in a better market. CEG soared 16% in the last four trading days of last week. CEG had been one of the hottest stocks on the market until late January. The electricity trade unwound after the DeepSeek news, and then all Hell broke loose with the tariffs. CEG soared and crashed. The market over did it on the buy side and then on the sell side. Meanwhile, the company itself is doing great. Electricity demand is sure to grow. The two huge recent deals (the Microsoft (MSFT) deal and the Calpine acquisition) will deliver a high level of earnings growth in the years ahead, and there may be more new deals coming. The market will regain lasting upside traction at some point, and CEG can come back fast. HOLD

Digital Realty Trust, Inc. (DLR – yield 3.0%) – This data center REIT was hot stuff until technology stocks started selling off. DLR hit the 52-week high at the end of November and had been trending downward since, until this month. DLR is up 12% in the tumultuous month of April and it’s broken the negative trend. Meanwhile, the business itself is still booming. DLR probably got a little too high too fast. But the future still looks extremely bright. Data center growth will continue to be a strong trend as the recent troubles probably fade into memory. HOLD

Eli Lilly and Company (LLY – yield 0.8%) – The superstar pharma company stock had a solid 6% move over the last three days of last week. This company has some of the best drugs on the market, along with an incredible pipeline. It is forecast to increase earnings by 80% this year with the contribution of its blockbuster weight-loss drugs, among others. Lilly recently reported positive phase III results for a weight-loss drug taken orally, which could be a game-changer in a weight-loss market expected to reach $130 billion a year by 2030. But LLY is being held back by tariff and pricing concerns. There could be some turbulence along the way from those things, but the general trajectory over the next year should be higher. Lily reports earnings later this week and could get a further boost. BUY

McKesson Corporation (MCK – yield 0.4%) – What tariff trouble? What treacherous market? MCK has just continued trending higher all year. It’s even up for the month of April and has returned 25% YTD in a treacherous market. It is also one of the very few portfolio stocks still trading near the high. The stock had been knocked down last summer and fall after the company reported supply chain issues with weight-loss drugs. But those problems are behind the company. MCK has resumed its old habit of slowly going higher and higher as it deals in a market that grows all by itself because of the aging population. It should continue to be a great holding in any market. BUY

Qualcomm Inc. (QCOM – yield 2.4%) – Technology has not been a good place to be. QCOM had been holding up okay, better than some, because it wasn’t riding high before the market rolled over. But this month took no prisoners, and QCOM got whacked. It made a new 52-week low early this month and then had a very strong recovery over the rest of the month. I like the prospects for the mobile device chipmaker for the rest of this year and beyond. It is well-positioned ahead of the next phase of AI in mobile devices, and there could be a strong upgrade cycle for smartphones in the near future. Qualcomm reports earnings this week that should give a good sense of the current smartphone market. HOLD

Toll Brothers, Inc. (TOL – yield 1.0%) – TOL moved 5% one day last week after the company announced several luxury home communities coming soon. The luxury homebuilder stock actually fared alright in the recent market crash. That’s probably because the stock was beaten to a pulp before the tariff selloff. However, rates started moving higher again and the solid relative performance floundered. But TOL has moved 16% higher from the recent low. The longer-term supply/demand dynamic is hugely favorable to this company, and it will rebound eventually. HOLD

UnitedHealth Group Inc. (UNH – yield 2.0%) – The sorry performance continues. The company reported earnings earlier this month that missed estimates and lowered earnings guidance for 2025. The market wasn’t happy about it, and UNH crashed more than 22% in one day, the worst day for the stock since 1998. The vague management statements that followed didn’t help as the company cited higher medical costs from rising usage by older clients and “unanticipated changes” in its Optum subsidiary, the growth engine of the company.

The stock has not bounced back from the carnage, even though the market has been booming over the past week. It could be that investors focused on stocks that may have a faster upside and neglected UNH. Because of the company’s high return on capital and the stellar longer-term track record of the stock, I’ll stick with it for a little longer. But the leash is short. HOLD

Waste Management, Inc. (WM – yield 1.4%) – The garbage king is delivering as advertised so far. It faced a huge defensive test shortly after being added to the portfolio and it passed. WM did fall sharply early this month but has since gained back nearly all of the losses already. WM is also one of the few portfolio stocks that is trading close to the high. You can depend on garbage. As market uncertainty swirls, investors are attracted to safety and the relative performance of stocks like WM. Of course, this stock also has a good track record in bull markets. It’s a good holding if the market turns around too. BUY

Safe Income Tier

NextEra Energy (NEE – yield 3.5%) Earnings – The combination regulated and clean energy utility reported earnings last week that beat on revenue and missed on earnings. Revenue showed solid 9% growth, nearly double the industry average. But earnings fell far short due to higher costs. The lower earnings tempered any enthusiasm, and the stock has traded flat since the report. NEE had been solid until the market really rolled over. But NEE should have less downside than the overall market from here. And it should be a desirable stock when investors come back to buying and demand more safety. NEE has also performed well in strong markets. BUY

USB Depository Shares (USB-PS – yield 6.0%) – The recent turbulence should have been a good time for fixed income. But interest rates spiked along with the stock market volatility. As a result, this preferred stock plunged to a new 52-week low. The combination of economic uncertainty and rising interest rates took the stock down. However, it should regain traction when the market stabilizes. The risk is spiking interest rates, which seems unlikely at this point. BUY

Vanguard Long-Term Corp. Bd. Index Fund (VCLT – yield 5.1%) – Ditto for VCLT. The long-term corporate bond ETF loves falling interest rates and hates rising ones. There will be more price pressure if rates continue to rise and vice versa. But the situation over the course of the year should be good. BUY

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