Market Chacha: Trade Wars & Rate Cuts

Fresh news and strategies for traders. SPY Trader episode #1034. Hey everyone, it's your pal Bubba Butters here, and welcome to Spy Trader! It's 12 pm on Thursday, March 20th, 2025, Pacific time, and the market's been doing the chacha – one step forward, two steps back. Let's dive into what's moving the needle today. So, US stocks are all over the place. We saw a bit of a rally this morning, but now things are looking mixed, with the Dow, S&P 500, and Nasdaq doing their best impression of a confused squirrel. Remember that the S&P 500 and Nasdaq are trying to climb out of a fourweek losing streak. The market's been on a bit of a roller coaster, mainly due to concerns about President Trump's trade war. In other news, the Sensex just closed above 76,000 for the first time since February! Now, sectorwise, energy is leading the pack this month, fueled by inflation fears and geopolitical tensions. On the flip side, consumer discretionary is feeling a bit weak. Financials and information technology are showing some muscle this week, while consumer staples and real estate aren't exactly setting the world on fire. Also, watch out for semiconductors – the S&P 1500 Semiconductors and Semiconductor Equipment industry might be heading for a bit of a tumble. Let's talk about the Fed. They're holding steady on interest rates at 4.5% for the second time, and it looks like they're expecting slower growth and higher inflation because of those pesky tariffs. They're also easing up a bit on quantitative tightening in April. The Fed is hinting at two rate cuts this year, but some folks think it might be fewer if inflation stays high. Jerome Powell acknowledged that inflation is still elevated, but he mentioned it has cooled off a bit. In economic data, fewer folks filed for unemployment last week, and sales of previously owned homes were surprisingly strong. Manufacturing in the midAtlantic region is also looking better than expected. Company news! Accenture shares took a hit because of growth concerns as the economy slows. Boeing had a great day after some positive news and new orders. Nvidia's CEO Jensen Huang plans to pump 'several hundred billion' into the US supply chain. Nike is about to drop their quarterly results, so keep an eye on their turnaround plans. FedEx is expected to announce a solid 20% jump in adjusted EPS yearoveryear, and Alphabet just announced a $32 billion deal to snag cloud security provider Wiz. On the macro front, the Fed lowered its GDP growth forecast to 1.7% but bumped up its inflation projections to 2.8%. They also think the unemployment rate might tick up to 4.4%. Now, for the risks. The biggest buzzkill is President Trump's trade war. Some analysts are worried that tariffs could cause stagflation or even a recession. Consumer sentiment has also taken a hit. So, what should you do? Be cautious out there! This market's got more twists and turns than a pretzel. Diversify your portfolio and maybe look at rotating into value stocks. Keep a close eye on economic data and Fed announcements. Energy stocks might be a good hedge against inflation. Oh, and one more thing: Why did the bank organize a party? To celebrate its interest! That's all for today, folks. Remember, I'm just a financial buddy, not your financial advisor. Do your homework before making any moves. Catch you next time on Spy Trader!