Market Brew: Tariffs, Tech, and Truces

Fresh news and strategies for traders. SPY Trader episode #1160. Hey everyone, it's your pal Finny McFinance here, and welcome to Spy Trader! It's 6 am on Tuesday, May 13th, 2025, Pacific time, and the coffee's brewing, so let's dive into what's shaking the markets this morning. First up, the big picture: The US stock market's hanging out at about an 8% discount to what we think it's really worth. But don't let that fool ya, we had a wild ride in early April with that tariff kerfuffle. Last week wasn't too shabby. The Morningstar US Market Index took a tiny dip of 0.34%. Industrials and consumer discretionary sectors were the MVPs, while healthcare and communication services took a bit of a beating. Now, for the juicy news. Remember those tariff wars? Well, the US and China have agreed to a temporary truce, reducing tariffs for 90 days. Uncle Sam's dropping tariffs on Chinese goods from a whopping 145% to a more reasonable 30%, and China's doing the same for us, down to 10% from 125%. The market loved this! The Dow Jones Industrial Average shot up nearly 1,200 points! The S&P 500 and Nasdaq Composite also joined the party, with consumer discretionary and tech leading the charge. Also, Shopify (SHOP) is joining the Nasdaq 100, so their shares saw a nice bump. President Trump also signed an executive order on drug prices, and pharma stocks did a little jig after the initial shock wore off. Alright, let's put on our thinking caps. The US economy is expected to slow down this year. Inflation, which looked like it was calming down, is now expected to tick up again. The Fed is likely to keep interest rates steady, but these trade policies are a real wild card, and may impact growth. Keep an eye on Alibaba, Tencent, and JD.com. Their earnings reports will give us a peek into the health of China's digital world. Apple's also in the spotlight due to its China connection and potential tariff troubles. And Nvidia? Well, any slowdown in AI investment or sales to China could spell trouble. Time for some recommendations! For the long haul, stick with a marketweight approach. Value and core stocks are looking good, and energy is becoming increasingly attractive. Maybe be a bit cautious about consumer defensive stocks. Keep an eye on Berkshire Hathaway (BRK.B), it's looking like a solid defensive choice, outperforming the S&P 500. Also, Asia is emerging as a good place for AI investments. Be prepared for more market swings! Focus on strong stocks and stay diversified. That's all for today, folks! Remember, I'm just a financial podcast host, not your personal advisor. Do your homework, and I'll catch you next time on Spy Trader!