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Market Crossroads: CPI, Trade, and Tech · The SPY Trader

• 0:00
  Hey everyone , welcome back to Spy Trader , the podcast that helps you navigate the markets like a pro !
• 0:06
  I'm your host , Money Mike , and it's 6 am on Tuesday , August 12th , 2025 , Pacific time .
• 0:14
  We've got a lot to unpack this morning as the market enters a cautious phase after some solid gains .
• 0:20
  Let's dive right in .
• 0:22
  First up , a quick look at the overall market .
• 0:26
  Yesterday , Monday , August 11th , all three major U.S.
• 0:30
  stock indexes closed lower , putting a slight dent in the impressive performance we saw last week .
• 0:37
  The Dow Jones Industrial Average tumbled 0.5% to close at 43,975.09 , with 19 of its 30 components in the red .
• 0:50
  The Nasdaq Composite , heavily weighted by technology , declined 0.3% to finish at 21,385.40 , largely due to some softness from semiconductor companies .
• 1:03
  The S&P 500 also fell 0.3% to close at 6,373.45 .
• 1:11
  Despite this recent dip , the broader market ETFs are still showing positive yeartodate performance .
• 1:18
  The SPDR S&P 500 ETF Trust , ticker SPY , has risen 1.43% over the past five days and is up a solid 9.37% yeartodate .
• 1:30
  The Invesco QQQ Trust , which tracks the Nasdaq100 , has climbed 2.3% over the past five days and boasts an impressive 12.68% yeartodate gain , showing that tech is still leading the charge overall this year .
• 1:45
  Now , let's talk sectors .
• 1:48
  On August 11th , out of the 11 broad sectors of the S&P 500 , eight ended in negative territory .
• 1:56
  The Technology Select Sector SPDR , ticker XLK , was down 0.7% , reflecting that weak performance in semiconductors .
• 2:06
  The Energy Select Sector SPDR , XLE , also saw a significant decline of 0.8% .
• 2:15
  On the flip side , the Communication Services Select Sector SPDR , XLC , actually rose 0.5% .
• 2:24
  And here's an interesting one : the Health Care Select Sector SPDR Fund , XLV , and its underlying companies experienced a rebound on Monday , with traders rotating back into this sector which has been a bit beaten down lately .
• 2:40
  Looking at broader trends for July , technology led the S&P 500 , gaining 5.19% , with utilities also strong at 4.94% .
• 2:51
  However , the healthcare sector continued its struggles , declining 3.23% in July and making it the worstperforming sector yeartodate through July 31st .
• 3:03
  The financials sector also showed some leadership at the start of August .
• 3:08
  Moving on to recent news and macroeconomic conditions , the market's current cautious mood is largely driven by upcoming economic data and ongoing geopolitical tensions .
• 3:19
  Investors are keenly awaiting two key inflation reports this week : the Consumer Price Index , or CPI , which comes out today , Tuesday , and the Producer Price Index , or PPI , on Thursday .
• 3:34
  A soft reading from these data points could significantly boost investor sentiment for a potential interest rate cut by the Federal Reserve in September .
• 3:43
  The CPI is expected to show a 0.2% increase from July , with the annual inflation rate estimated at 2.8% .
• 3:54
  While some data hinted at rising inflation in the second half of 2025 , past analyses suggest U.S.
• 4:01
  consumers have absorbed only a small portion of tariffrelated costs so far , though this is anticipated to change .
• 4:09
  Speaking of interest rates , the probability of a 25 basis point rate cut by the Fed in September has actually increased to 84.5% , up from 80.3% last week .
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  This expectation is fueled by unexpectedly weak jobs additions in July and downward revisions to jobs data for June and May .
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  The current Fed funds rate stands between 4.25% and 4.5% .
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  We'll also be keeping an eye on the upcoming Jackson Hole Symposium from August 21st to 23rd , which is expected to set the tone for the September FOMC meeting .
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  Another big concern is the U.S.China trade negotiations .
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  President Trump extended the trade truce , but U.S.
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  levies on Chinese goods could sharply increase if a deal isn't finalized by Tuesday's deadline .
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  These tariffs are projected to reduce U.S.
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  real GDP growth by 0.5 percentage points annually over 2025 and 2026 .
• 5:16
  On the GDP and employment front , the U.S.
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  economy saw real GDP growth of 3.0% annualized in Q2 2025 , recovering from a 0.5% contraction in Q1 .
• 5:30
  The Atlanta Fed's GDPNow estimate for Q3 2025 real GDP growth is currently 2.5% .
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  However , employment growth has stalled , with the employer survey showing less than 35,000 jobs created on average over the last three months , and the household survey indicating over 850,000 jobs lost .
• 5:55
  National nonfarm employment growth figures were recently revised downward .
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  Alright , let's talk about some specific companies and what's moving them .
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  In the technology sector , despite the recent dip in XLK , the sector continues to be a growth driver due to the intense race to develop and implement Artificial Intelligence , or AI , and large language models .
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  Companies like Nvidia , ticker NVDA , a leader in AIpowering GPUs , Alphabet , with tickers GOOG and GOOGL , showing strong Q2 earnings and cloud growth , and Taiwan Semiconductor Manufacturing , TSM , a major GPU fabricator , are still seen as strong buys in August due to their positioning in the AI trend .
• 6:46
  However , Nvidia shares recently dipped on reports of China restricting the use of its H20 chips for security reasons , which is something to keep an eye on .
• 6:55
  In healthcare , while the sector as a whole has underperformed yeartodate , individual companies within healthcare have shown strong performance .
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  Celcuity Inc.
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  , CELC , Kodiak Sciences Inc.
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  , KOD , and ZimVie Inc.
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  , ZIMV , were among the bestperforming healthcare stocks over the last month based on 30day returns .
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  Healthcare Global Enterprises also achieved an alltime high amidst this mixed sector performance .
• 7:23
  Some other noteworthy company news includes Chipotle Mexican Grill , ticker CMG , whose shares are down 31% from their 2025 high and 21.5% since their Q2 2025 earnings report , which revealed a 4% decrease in samestore sales .
• 7:41
  Shares of Eli Lilly and UnitedHealth Group both rebounded on Monday , August 11th .
• 7:48
  U.S.listed shares of cannabis companies like Canopy Growth , which surged over 25% , and Tilray , which rose almost 40% , jumped after reports that President Trump is considering reclassifying marijuana as a less dangerous drug .
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  SoundHound AI , ticker SOUN , shares soared after reporting record Q2 sales , up 217% yearoveryear .
• 8:15
  On the downside , BigBear.ai , BBAI , plunged 28% after significantly lowering its outlook , and AAON Inc.
• 8:25
  , AAON , dropped 10.5% after missing Q2 2025 earnings estimates .
• 8:31
  Now , for the moment you've been waiting for : concrete recommendations .
• 8:36
  Given the current market conditions , including a cautious sentiment due to upcoming inflation data , ongoing trade uncertainties , and a weakening job market , investors might consider a balanced approach with a selective focus on growth opportunities and some defensive plays .
• 8:54
  First , for strategic allocation to growth , with caution : Despite recent pullbacks , the technology sector continues to drive market performance , largely due to the AI revolution .
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  Valuations for tech stocks remain attractive for longterm investors .
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  ETFs like QQQ have demonstrated strong yeartodate performance .
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  So , consider the Invesco QQQ Trust , ticker QQQ .
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  This ETF provides concentrated exposure to 100 of the largest nonfinancial companies on the Nasdaq , with a heavy focus on technology .
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  Its yeartodate performance is strong at 12.68% , and it offers diversification within the tech space .
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  It's considered a ' Moderate Buy ' by analysts with potential upside .
• 9:42
  For those with a higher risk tolerance , individual tech stocks like Nvidia , ticker NVDA , remain a leader in the chipmaking space essential for AI , and Alphabet , GOOGL , shows strong revenue and cloud growth , making it a robust player .
• 9:59
  Remember to monitor news regarding geopolitical tensions impacting chipmakers .
• 10:04
  You could also look at the Technology Select Sector SPDR Fund , XLK .
• 10:10
  While it saw a dip on August 11th , it remains a strong performer over the past month and yeartodate , offering diversified exposure to the largecap technology sector .
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  Second , explore opportunities in beatendown sectors with growth potential .
• 10:26
  The healthcare sector has been an underperformer yeartodate , but it 'ticked up ' recently as traders rotated back in , suggesting potential value .
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  The aging population and increasing medical needs contribute to longterm growth prospects .
• 10:41
  The Health Care Select Sector SPDR Fund , XLV , while it has struggled this year , the recent rebound indicates potential interest .
• 10:51
  Investing in XLV offers broad exposure to pharmaceutical , biotechnology , and other healthcare companies , mitigating individual company risk .
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  For those with a higher risk tolerance and willingness to do deeper research , some individual healthcare stocks like Celcuity Inc.
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  , CELC , Kodiak Sciences Inc.
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  , KOD , and ZimVie Inc.
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  , ZIMV , have shown significant recent 30day returns .
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  Third , monitor macroeconomic indicators closely .
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  The upcoming CPI and PPI data , along with the Fed's Jackson Hole Symposium , will be critical in shaping market direction .
• 11:32
  A soft inflation reading could be a catalyst for further market gains by solidifying expectations for a September rate cut .
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  Conversely , higherthanexpected inflation could lead to market volatility .
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  So , stay informed on economic data releases and Fed communications .
• 11:51
  This will help you adjust your portfolio allocation between growth and defensive assets .
• 11:57
  Finally , consider diversification and risk management .
• 12:01
  With ongoing trade uncertainties and mixed economic signals , maintaining a diversified portfolio remains crucial .
• 12:09
  Broad market ETFs like the Vanguard Total Stock Market ETF , ticker VTI , can provide exposure to the entire U.S.
• 12:18
  stock market , including large , mid , small , and microcap stocks , offering wider diversification than just the S&P 500 .
• 12:28
  For investors seeking stability and income , core bond ETFs like the iShares Core U.S.
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  Aggregate Bond ETF , AGG , or the Vanguard Total Bond Market ETF , BND , can add balance , especially if interest rates are expected to decline .
• 12:46
  Remember , the CBOE Volatility Index , VIX , was up 7.3% to 16.25 on August 11th , indicating some increased fear in the market .
• 12:57
  This suggests that market swings could continue .
• 13:01
  Also , the outcome of the U.S.China trade negotiations and the potential for increased tariffs could introduce significant volatility , particularly for sectors exposed to international trade .
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  And as we saw with Chipotle Mexican Grill , CMG , and BigBear.ai , BBAI , companyspecific events like earnings misses or revised outlooks can lead to sharp price movements , even in an otherwise strong market .
• 13:29
  Investors interested in individual stocks should always conduct thorough due diligence .
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  That's all for today's Spy Trader .
• 13:37
  I'm Money Mike , reminding you to stay sharp and trade smart .
• 13:41
  See you next time !