Latest / The SPY Trader / Market Rises: Peace & Profits

Transcript

Market Rises: Peace & Profits · The SPY Trader

• 0:00
  Welcome to Spy Trader , your goto podcast for navigating the markets with clarity and a dash of good humor !
• 0:07
  I'm your host , Money Mike , and it's 6 am on Tuesday , June 24th , 2025 , Pacific Time .
• 0:15
  The US stock market is certainly looking sprightly this morning , coming off a bit of a volatile patch .
• 0:21
  Let's dive into what's moving the needle .
• 0:23
  Our major indices are all in the green .
• 0:26
  The S&P 500 Index is up a solid 0.96 percent , trading at 6,025.17 points .
• 0:35
  The Dow Jones Industrial Average is also showing strength , climbing 0.89 percent to 42,581.78 points .
• 0:46
  And the Nasdaq Composite , our tech darling , is up 0.94 percent at 19,630.98 points .
• 0:56
  This positive momentum comes after a bit of a threeday losing streak for the S&P 500 , so it's a welcome sight .
• 1:03
  Shifting to sector performance , it's a bit of a mixed bag , showing a selective market .
• 1:09
  Consumer Discretionary is leading the charge , largely thanks to Tesla , which jumped approximately 10 percent .
• 1:16
  Energy , Consumer Staples , Financials , Industrials , and Utilities are also showing gains today .
• 1:24
  However , we're seeing some underperformance in Communication Services , Materials , and Technology .
• 1:30
  Health Care and Real Estate are also pulling back slightly .
• 1:34
  Interestingly , while Energy is up today , it was actually down over 2 percent yesterday as oil prices traded sharply lower .
• 1:43
  The biggest news driving this market rally is the perceived deescalation of the IsraelIran conflict .
• 1:50
  After an Iranian missile launch that thankfully resulted in no casualties , and reports of intercepts , President Trump announced a ceasefire between the two nations .
• 2:00
  This has unwound some of the risk premium that was built into oil prices , with West Texas Intermediate futures dropping 9 percent yesterday .
• 2:09
  Now , let's talk macro .
• 2:12
  The Federal Reserve maintained its policy interest rate range at 4.25 to 4.50 percent in its June meeting .
• 2:20
  This marks the fourth consecutive meeting without a change , a cautious ' waitandsee ' approach amidst uncertainties , especially with President Trump's trade policies and tariffs looming .
• 2:31
  The Fed still anticipates two 0.25 percent rate cuts later in 2025 .
• 2:36
  On the inflation front , it's still a bit stubborn .
• 2:39
  The annual inflation rate , measured by the Consumer Price Index , was 2.4 percent in May , a slight uptick from April and still above the Fed's 2 percent target .
• 2:51
  Core inflation , which strips out volatile food and energy prices , stood at 2.8 percent .
• 2:57
  The Fed has even revised its Personal Consumption Expenditures inflation forecast for 2025 up to 3.0 percent .
• 3:06
  Shelter costs were a primary driver here .
• 3:09
  The US labor market remains steady but shows signs of cooling .
• 3:14
  Employers added 139,000 nonfarm jobs in May , exceeding forecasts , and the unemployment rate held steady at 4.2 percent for the third straight month .
• 3:26
  However , job openings are down from a year ago , and layoffs ticked up slightly .
• 3:31
  As for economic growth , Real Gross Domestic Product decreased at an annual rate of 0.2 percent in the first quarter of 2025 .
• 3:41
  The Fed has downgraded its GDP growth forecast for 2025 to 1.4 percent , suggesting a somewhat downgraded economic outlook .
• 3:51
  On the company front , Tesla's stock soared over 8 percent after launching its driverless robotaxi service in Austin , Texas .
• 4:00
  Intel plans to lay off around 10,000 workers , or up to 20 percent of its global workforce , despite receiving federal funding .
• 4:09
  Microsoft and Meta Platforms both saw their stocks gain about 2 percent .
• 4:14
  Microsoft recently hit a fresh high , though it also plans to trim jobs , and Meta is launching AIpowered glasses this summer .
• 4:22
  Uber is expanding its AI solutions business , and Texas Instruments plans a huge 60 billion dollar investment in the US .
• 4:30
  On the flip side , Kroger plans to close 60 stores , and Hasbro is laying off 3 percent of its staff , partly due to tariffs .
• 4:40
  Aflac reported a cybercrime group accessed customer data , and we also heard that FedEx founder Fred Smith passed away at 80 .
• 4:48
  So , why is the market behaving this way ?
• 4:51
  The current positive stance , despite some mixed economic signals , seems to be a clear ' riskon ' reaction to the perceived deescalation of Middle East tensions .
• 5:01
  Investors are breathing a sigh of relief , interpreting the recent conflict as contained , which is why oil prices plunged .
• 5:10
  This allows the market to refocus on corporate fundamentals .
• 5:13
  The Fed's consistent stance on interest rates also provides some certainty , and while inflation is sticky and GDP is down slightly , the labor market isn't collapsing , offering a stable foundation .
• 5:26
  Plus , strong companyspecific news , like Tesla's robotaxi launch , shows innovation can certainly drive individual stocks .
• 5:35
  Now for my recommendations .
• 5:37
  First , stay agile and monitor geopolitical developments closely .
• 5:42
  While the deescalation is good news , these situations can shift rapidly , so keep an eye on international news for any renewed tensions .
• 5:51
  Second , focus on quality and look for sectorspecific opportunities .
• 5:56
  In Consumer Discretionary and Technology , consider companies with strong innovation and resilient business models , especially those leveraging AI .
• 6:06
  However , be mindful of their potentially high valuations .
• 6:10
  For Energy , the sharp drop in oil prices suggests caution in the short term , as lower oil prices impact profitability .
• 6:18
  Third , with inflation still above target , consider investments that perform well in a ' sticky inflation' environment , like value stocks or companies with strong pricing power .
• 6:29
  Revisit your bond allocations , as yields are lower across the curve , which might signal a flight to safety or anticipation of future rate cuts .
• 6:38
  Fourth , diversification remains paramount .
• 6:42
  The economic signals are mixed , so spreading your investments across various sectors and asset classes is key to managing risk .
• 6:51
  And finally , always review companyspecific risks .
• 6:55
  News like Intel's layoffs or Kroger's store closures can significantly impact individual stock performance , regardless of the broader market trend .
• 7:05
  Understand why these things are happening and their longterm implications .
• 7:10
  The Fed is still taking a waitandsee approach , so avoid drastic portfolio changes based on shortterm speculation about rate cuts .
• 7:19
  That's all for today's Spy Trader .
• 7:21
  Thanks for tuning in , and happy investing !