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Transcript

The Market’s Record Surge · The SPY Trader

• 0:00
  Hey there , stock market warriors and finance fanatics !
• 0:03
  Welcome back to Spy Trader , your goto podcast for cutting through the noise and getting straight to the insights .
• 0:10
  I'm your host , Market Maverick Marty , and it's 6 am on Saturday , June 28th , 2025 , Pacific time .
• 0:17
  We've got a lot to unpack from a truly wild week on Wall Street , so let's dive right in !
• 0:22
  The US stock market just wrapped up a powerful ' summer rally ' with major indexes hitting brand new record highs .
• 0:30
  For the week ending June 27th , the S&P 500 climbed 3.4% , breaking a twoweek losing streak and closing at a record 6,173 points .
• 0:42
  It's up 20% since April 8th !
• 0:45
  The Nasdaq Composite jumped an incredible 4.25% for the week , reaching an alltime high of 20,273 points , a remarkable 33% surge since its April lows .
• 0:59
  Even the Dow Jones Industrial Average rose a solid 3.8% to close at 43,819 points .
• 1:08
  So , what drove this monster rally ?
• 1:10
  Well , a few key things .
• 1:13
  First , we saw easing geopolitical tensions , particularly regarding the IsraelIran conflict .
• 1:20
  Reports of Iran's willingness to negotiate and a ceasefire agreement helped calm investors , sending oil prices , like West Texas Intermediate crude , sliding 12.1% to 65.08 a barrel by Thursday .
• 1:37
  Second , the U.S.
• 1:38
  and China confirmed a new trade framework , which was a big sentiment booster .
• 1:44
  Although President Trump's announcement on Friday to end trade talks with Canada over a digital services tax did cause a brief dip in the S&P 500 and Nasdaq before they recovered .
• 1:56
  Third , investors are still hopeful for future interest rate cuts .
• 2:01
  Despite the Federal Reserve holding rates steady at 4.25% to 4.50% at its June meeting , policymakers still project two rate cuts later in 2025 .
• 2:14
  Fed Chair Jerome Powell is cautious , but others hint at cuts as early as July or September .
• 2:20
  Looking at sectors , Communication Services led the pack , up 5.01% , with Technology close behind , rising 4.35% .
• 2:30
  AI excitement continues to fuel the tech surge .
• 2:33
  On the flip side , Energy was the weakest , down 3.19% , and Real Estate lagged , too .
• 2:40
  On the macroeconomic front , we're seeing a mixed bag .
• 2:44
  May's Consumer Price Index , or CPI , increased less than expected , but the Fed's preferred inflation gauge , PCE , inched slightly higher .
• 2:54
  The Fed even raised its 2025 PCE inflation forecast to 3.0% , citing tariffs as a contributing factor .
• 3:02
  GDP growth forecasts were downgraded by the Fed and OECD for both 2025 and 2026 , suggesting a slowing economy .
• 3:12
  Employment data shows the unemployment rate steady at 4.2% in May , but many job seekers are finding fewer opportunities , pointing to a narrowing breadth of job growth .
• 3:23
  In company news , Nike shares surged 15% on Thursday after beating earnings expectations and outlining plans to handle tariff impacts .
• 3:33
  Nvidia continued its amazing run , hitting another alltime high on Wednesday , regaining its spot as the world's most valuable company .
• 3:43
  On the other hand , Intel's stock tumbled 6.3% on June 12th due to weak performance .
• 3:49
  Kroger also saw shares rise after beating profit and sales estimates .
• 3:53
  Overall , the first quarter 2025 earnings season for the S&P 500 has been strong , with 76.3% of companies beating expectations , well above the longterm average .
• 4:07
  So , why are we seeing these record highs ?
• 4:11
  It's really a combination of reduced geopolitical risk , especially with the Middle East calming down .
• 4:17
  Then there's the optimism for Fed rate cuts ; the market is looking past the next few months to a period of more accommodative monetary policy .
• 4:27
  Add to that strong corporate earnings , with many S&P 500 companies surprising to the upside .
• 4:34
  And , of course , the continued enthusiasm around artificial intelligence is driving the tech sector , making companies like Nvidia seem like a bastion of safety .
• 4:44
  The U.S.China trade framework also provided a positive push , even with that brief wobble from the Canada trade talks .
• 4:52
  Now , let's talk about the challenges and concerns .
• 4:55
  While inflation data was somewhat softer in May , the Fed is still worried that tariffs could push inflation higher later this year , complicating their rate cut plans .
• 5:06
  We're also seeing signs of slowing economic growth , with downgraded GDP forecasts and narrowing job growth .
• 5:13
  And despite the low unemployment rate , the ' lived experiences' of many Americans show a more challenging job market , which could impact consumer spending .
• 5:22
  So , what are the recommendations for you , the savvy Spy Trader listener ?
• 5:26
  First , maintain diversification in your portfolio , but consider a tilt towards growth and technology stocks , especially those tied to AI , given their strong performance .
• 5:38
  Second , keep a very close eye on inflation data and Federal Reserve commentary .
• 5:44
  The rate cuts are anticipated , but they're not guaranteed , and any unexpected inflation jump or hawkish shift from the Fed could lead to pullbacks .
• 5:53
  Third , be prepared for trade policy volatility .
• 5:57
  That Canada situation was a clear reminder that trade policy can still cause sudden market swings , especially with the July 9th deadline for reciprocal tariffs looming .
• 6:09
  Fourth , focus on quality companies , meaning those with strong balance sheets , consistent earnings , and competitive advantages , like Nike demonstrated .
• 6:19
  Fifth , consider fixed income , particularly longerdated U.S.
• 6:23
  Treasuries and investmentgrade bonds .
• 6:26
  With the Fed eventually looking to lower rates , these could offer good value and stability .
• 6:32
  And finally , given this significant rally since April , it might be a good time to review your portfolio positioning and rebalance to ensure your asset allocation still aligns with your risk tolerance and longterm goals .
• 6:46
  That's it for this edition of Spy Trader !
• 6:48
  Remember to stay vigilant , stay informed , and keep making those smart moves .
• 6:54
  Until next time , I'm Market Maverick Marty , and happy trading !