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Record Highs and Healthcare Hedges · The SPY Trader

• 0:00
  Good morning and a very happy Saturday to you !
• 0:03
  It is six am on Saturday , May twentythird , twentytwentysix , out here on the West Coast .
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  You are listening to Spy Trader , your goto source for making sense of the markets while the rest of the world is still hitting the snooze button .
• 0:16
  I am your host , Barnaby Bullmarket , and we have a lot to unpack from a very busy week on Wall Street .
• 0:23
  We are coming to you every few hours today to keep you updated on the latest shifts .
• 0:28
  It was a historic Friday , folks .
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  We just watched the U.S.
• 0:31
  stock market close out its eighth consecutive winning week .
• 0:35
  That is a whole lot of green on the screens !
• 0:38
  The S&P five hundred , which we track through the SPY ETF , climbed about point nine percent this week to close at seven thousand four hundred seventythree point fortyseven .
• 0:49
  Not too shabby , right ?
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  But the real crown goes to the blue chips over at the Dow Jones Industrial Average .
• 0:57
  It gained over two percent this week , smashing through to a record high of fifty thousand five hundred seventynine point seventy .
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  Even the smaller companies in the Russell two thousand joined the party , surging two point seven percent .
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  This tells us that despite some scary headlines , there is still plenty of hope for a soft landing for our economy .
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  However , if you look under the hood , the engine is making a bit of a clanking sound .
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  We are seeing a major shift toward defensive plays .
• 1:25
  Why ?
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  Well , inflation is being a bit of a party pooper .
• 1:29
  The latest report showed prices jumping three point eight percent , mostly because of a massive fiftyfour percent spike in fuel oil and a twentyeight percent jump in gasoline prices .
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  This is all tied to the ongoing conflict with Iran and disruptions in the Strait of Hormuz .
• 1:47
  Because of this , our friends at the Federal Reserve , specifically Chair Kevin Warsh and Governor Christopher Waller , are sounding pretty hawkish .
• 1:56
  They are basically saying that instead of cutting interest rates , they might actually have to raise them .
• 2:02
  This has sent the longterm bond market , the TLT ETF , down toward fiftytwo week lows with yields hitting five percent .
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  Now , let’s talk sectors .
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  Healthcare was the absolute MVP this week .
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  The Health Care Select Sector SPDR Fund , ticker XLV , jumped three point three percent .
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  A huge reason for this was Eli Lilly , ticker LLY .
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  They got some great news that Medicare will start covering their popular weightloss drugs in twentytwentyseven .
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  Merck , ticker MRK , also soared over five percent on positive cancer trial results .
• 2:38
  Over in Tech land , it was a bit more of a mixed bag .
• 2:42
  Nvidia reported another blowout quarter on Wednesday , but the stock didn't really move much .
• 2:47
  It seems like a classic case of selling the news after a massive runup earlier this year .
• 2:53
  The QQQ ended the week up just half a percent .
• 2:57
  Even Real Estate , which we follow through the VNQ ETF , is feeling the heat as mortgage rates hit six point five percent , even though data center REITs like Prologis , ticker PLD , are still doing well thanks to the AI boom .
• 3:13
  So , what is the game plan for your portfolio ?
• 3:16
  First , I am recommending an Overweight position in Defensive Healthcare .
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  The XLV ETF is a great way to play this .
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  I really like Eli Lilly , ticker LLY , as a cornerstone holding because of that expanded Medicare market , even if the price looks a bit high right now .
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  Second , be cautious with Technology .
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  We love the QQQ , but with interest rates staying higher for longer , it is better to wait for a dip rather than chasing new highs .
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  Finally , let’s talk hedges .
• 3:47
  Stay away from the longterm bonds in the TLT for now — the risk is just too high with the Fed's current mood .
• 3:54
  Instead , look at shortterm bonds like the BSV ETF or keep some gold in your pocket .
• 4:00
  The GLD ETF is sitting around four hundred eleven to four hundred seventeen dollars and is a great insurance policy against those geopolitical tensions in the Middle East .
• 4:11
  That is it for this edition of Spy Trader !
• 4:13
  I hope you have a wonderful morning .
• 4:15
  I am Barnaby Bullmarket , and I will be back in a few hours with more insights .
• 4:20
  Stay smart and stay invested !