Market Brew: Tariffs, Trends, and Top Stock Picks

Fresh news and strategies for traders. SPY Trader episode #1064. Alrighty folks, buckle up, it's your pal Chip Chisel, coming at you live from Spy Trader! It's 6 am on Wednesday, April 2nd, 2025 (Pacific), and the market's already got my coffee brewing. Let's dive into what's shaking things up today. First off, we had a bit of a mixed bag yesterday. The S&P 500 and Nasdaq managed to climb after a rocky session, but the Dow couldn't quite keep up. And looking back at the first quarter? Ouch. Dow down 1.3%, S&P 500 shedding 4.6%, and the Nasdaq taking a 10.4% tumble. Volatility is the name of the game, folks, thanks to tariff worries, inflation jitters, and recession fears. So, what's on the menu today? Well, all eyes are on Trump's tariffs. April 2nd is being dubbed 'Liberation Day' as we're expecting to hear the details of these reciprocal tariff plans. Until then, uncertainty reigns. We also had some slightly weakerthanexpected reports on manufacturing and job openings, and the big March jobs report is coming Friday. Let's hope we see something positive. Company news? Johnson & Johnson (JNJ) shares took a hit after a judge rejected their bankruptcy plan related to those talc claims. On the brighter side, PVH Corp (PVH), the parent company of Calvin Klein and Tommy Hilfiger, gave the fashion industry a boost with betterthanexpected sales and profits. Tesla (TSLA) is also up ahead of their firstquarter delivery report, and we're all waiting to see how those numbers look. Sectorwise, the usual defensive sectors and energy are holding up okay, but tech, communication services, financials, and industrials are dragging things down. Keep an eye on those AI stocks; they're causing some valuation shifts. The energy and healthcare sectors have seen their price/fair value rise recently, and Eli Lilly (LLY) is playing a big role in the healthcare story. Macrowise, the US economy is slowing down. Tariffs are going to be a major theme, impacting consumer and business confidence. Inflation is a concern; the Fed raised its projections to 2.7% for 2025. Interest rates are expected to stay put for the rest of the year, but the overall economic uncertainty is high, and there's some talk of stagflation. Plus, rising government debt is always something to watch. Alright, let's get to the good stuff: what to do with all this information? Investor sentiment is a bit dented, so be cautious. The US equity market is trading at a discount, so it's time to balance risk and reward. Value stocks are looking more attractive than growth stocks right now. For sectors, keep a close eye on energy, and potentially utilities, though the market might be overpricing growth there. Cybersecurity firms like Okta could also perform well. As for specific stocks, Amazon (AMZN) and Netflix (NFLX) could be good bets as beatendown growth stocks. Energy Transfer (ET) and Dominion Energy (D) are options to boost passive income. Nike (NKE) is considered to have fallen far enough, and Eli Lilly (LLY) is looking good with the weight loss drugs. Don't forget Starbucks as analysts are seeing early signs of success with the new CEO Brian Nickels turnaround efforts. Remember, tariffs, rising inflation, and a potential economic slowdown are the big risks. Smallcap stocks are still attractively valued, but it might take a while for them to shine. And a bear market in AI stocks could create some tempting valuations down the line. So, How does a stockbroker say goodbye? "Let's touch base." That's all for today, folks! Remember, this is just my take based on the latest reports from April 1st and 2nd, 2025, and the market can change on a dime. Do your own research, and happy trading!