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Bearish Winds: The Week Ahead · The SPY Trader

• 0:00
  Alright folks , welcome back to Spy Trader , your daily dose of market insights and trading strategies .
• 0:07
  I'm your host , Captain Cashflow , and it's 6 am on Sunday , June 22nd , 2025 , Pacific Time .
• 0:15
  We're getting an early start because the market never truly sleeps , and the week ahead , from June 23rd to the 27th , looks like it's going to be a bit of a bumpy ride .
• 0:26
  While we're anticipating some modest equity gains over the next year , the immediate forecast for the coming week is leaning ' Slightly Bearish .
• 0:34
  ' Let's dive into why .
• 0:36
  First up , the big picture .
• 0:38
  Our economy is in a tricky spot , dealing with slowing growth and persistent inflationary pressures .
• 0:44
  We saw a contraction in real GDP in the first quarter of 2025 , mainly because of a surge in imports ahead of new tariffs .
• 0:54
  Although we expect a rebound in the second quarter , underlying growth is projected to slow down for the rest of 2025 , with the Federal Reserve forecasting just 1.4% real GDP growth for the year .
• 1:08
  Inflation remains a key concern , with the OECD predicting US inflation to approach 4% by yearend 2025 .
• 1:18
  While recent Consumer Price Index and Producer Price Index reports showed coolerthanexpected inflation , persistent wage pressures and the full impact of a multidecade high average effective tariff rate , currently around 15% , suggest goods prices could still climb .
• 1:37
  The Federal Reserve recently held interest rates steady at 4.25% to 4.5% , playing it patient and datadependent .
• 1:47
  Some officials don't see any rate cuts this year , while others still expect two .
• 1:52
  Expectations for a July rate cut have actually diminished a bit .
• 1:56
  A major event this week will be Fed Chair Jerome Powell's testimony before Congress on Tuesday , June 24th .
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  Investors will be hanging on his every word for clues on the Fed's future monetary policy .
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  Now , let's look at the key economic data hitting the wires this week .
• 2:15
  On Monday , June 23rd , we'll get the S&P Global Flash Manufacturing and Services PMI reports , along with existing home sales .
• 2:24
  We'll also hear from Federal Reserve Governors Waller and Bowman , and Chicago Fed President Goolsbee .
• 2:30
  Come Thursday , June 26th , we'll get updates on US Durable Goods Orders and Initial Jobless Claims , plus the Consumer Confidence Index , which is expected to show a decline , possibly hinting at weaker consumer spending .
• 2:46
  But the big one everyone will be watching for is on Friday , June 27th : the Personal Consumption Expenditures , or PCE Price Index , and core PCE .
• 2:57
  This is the Fed's preferred inflation gauge , and it could really shake up market expectations for future Fed actions .
• 3:05
  Beyond the numbers , geopolitical tensions are still in play .
• 3:10
  The ongoing IsraelIran conflict continues to inject uncertainty , and while we've avoided the worstcase scenarios so far , the potential for escalation remains a key risk , influencing things like oil prices .
• 3:24
  The trade war , especially with China , keeps disrupting supply chains and affecting corporate performance .
• 3:31
  The 90day tariff pause is set to end on July 9th , which could bring new volatility , even if an extension is on the table .
• 3:40
  These trade tensions might actually keep the US dollar under pressure , potentially leading to a weaker dollar , which could be a silver lining for US multinational corporations with significant international operations .
• 3:54
  Looking at recent sector performance , in the week ending June 20th , financial services and energy sectors were pretty resilient , performing well .
• 4:03
  On the flip side , healthcare and basic materials struggled .
• 4:08
  Technology stocks have seen some headwinds recently due to tariff uncertainties , but longterm ' mega forces' like Artificial Intelligence are still expected to drive returns , keeping an overweight view on US stocks overall .
• 4:22
  Earnings season isn't in full swing for the big tech giants , but we do have some notable companies reporting .
• 4:29
  On Monday , June 23rd , keep an eye on FactSet Research Systems , Commercial Metals Co.
• 4:35
  , and KB Home .
• 4:37
  Tuesday , June 24th brings FedEx , and analysts are expecting a ' noisy miss ' for them due to those tariffrelated volume headwinds .
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  Wednesday , June 25th , Micron Technology is forecast to show strong growth , and we'll also hear from General Mills , Paychex , and Winnebago Industries .
• 4:56
  And on Thursday , June 26th , Nike is expected to report a significant drop in earnings and revenue , largely because of tariff issues and an oversupplied product line .
• 5:08
  McCormick & Company and Walgreens Boots Alliance are also on the schedule .
• 5:12
  These reports could definitely cause some sectorspecific movements , especially for logistics , semiconductors , consumer goods , and retail .
• 5:21
  So , given this ' Slightly Bearish' nearterm outlook and the expected volatility , we're suggesting a cautious but adaptable approach for the upcoming week .
• 5:30
  First , keep your eyes glued to those key economic data releases and anything the Fed says .
• 5:36
  The PCE Index on Friday is huge .
• 5:40
  A higherthanexpected inflation reading could confirm the Fed's patient stance on rate cuts and make markets nervous .
• 5:47
  But a significantly lower PCE could spark optimism for earlier cuts .
• 5:52
  Also , Fed Chair Powell's testimony on Tuesday is a mustlisten for any shifts in their outlook .
• 5:59
  The PMI and consumer confidence data will also give us realtime insights into economic health .
• 6:07
  For sectorspecific considerations , with all this uncertainty , consider maintaining exposure to defensive sectors like Utilities , Consumer Staples , and Healthcare .
• 6:18
  These tend to be more stable when the economy slows down .
• 6:21
  The Energy sector might continue to be strong thanks to ongoing Middle East tensions .
• 6:27
  For tech , while AI is a longterm driver , those shortterm tariff headwinds could create volatility .
• 6:34
  If you're looking at tech , focus on companies with strong balance sheets and diversified revenue streams that aren't overly reliant on global trade policy .
• 6:44
  Industrials and Consumer Discretionary companies , especially those with international supply chains or heavy reliance on consumer spending , could face challenges due to tariffs and potentially weakening consumer confidence .
• 6:58
  FedEx and Nike's earnings will be great bellwethers for these segments .
• 7:02
  And finally , some general risk management tips .
• 7:07
  Always maintain a welldiversified portfolio across different asset classes and geographies to spread out your risk .
• 7:14
  With stocks near alltime highs , some valuations look stretched , so exercise caution and scrutinize valuations before making new investments .
• 7:23
  And stay super informed on geopolitics and trade .
• 7:27
  Developments in the Middle East and any news regarding US trade policy , especially as that July 9th tariff pause deadline approaches , can trigger rapid market shifts .
• 7:38
  In an uncertain environment , focusing on highquality companies with strong fundamentals , stable earnings , and robust balance sheets is often a prudent strategy .
• 7:49
  That's it for this early morning edition of Spy Trader .
• 7:52
  Stay nimble out there , and we'll catch you next time !