Market Movers: Tariffs, Tech, and Taking Stock

Fresh news and strategies for traders. SPY Trader episode #1053. Hey, it's your pal, Penny Stocksington, back with another edition of Spy Trader! It's 6 am on Friday, March 28th, 2025, Pacific time, and let's dive into what's moving the markets today. First, the bad news; US stocks closed slightly lower yesterday, with the S&P 500 dipping about 0.3%. Blame those new auto tariffs! But don't fret, we're still in the green for the week. On the sector front, we saw the usual suspects in consumer staples and healthcare holding their own. Energy, communication services, and tech? Not so much. Seems like the market is taking a breather from those megacap tech darlings that have been hogging the spotlight. Speaking of spotlights, President Trump slapped a 25% tariff on automobiles not made in the good ol' US of A. That sent General Motors down 7.4% and Ford down 3.9%. Tesla, however, got a free pass since they assemble their cars here, so they actually traded higher! In other news, Goldman Sachs is super bullish on gold, raising their yearend price target to $3,300 an ounce. Lululemon had a bit of a stumble, their shares took a plunge after a weakerthanexpected outlook for the first quarter and 2025. On the macro front, things are looking...okayish. GDP data was benign, jobless claims came in slightly below expectations. The final estimate for Q4 GDP was a seasonally adjusted 2.4%, a tad above the expected 2.3%. Initial weekly jobless claims were at 224,000, a little better than anticipated. The Fed is playing it cool, keeping interest rates steady and sticking to their forecast of two rate cuts this year. They're being patient, given the slowing economic growth and all the policy uncertainty. The economy is slowing down from its previous sprint, the forecast for this year has been lowered to 1.7% down from 2.1% in December. The labor market is still kicking, though job growth is expected to slow down a bit. We're seeing some cooling signs like concentrated job growth, fewer hours worked, a slightly higher unemployment rate, and lower labor force participation. Job growth is expected to decelerate from 160,000 per month in 2024 to around 80,000 per month this year, with the unemployment rate rising above 4.5%. Inflation data is bumpy, and consumer spending is still chugging along. Winnebago Industries reported better secondquarter revenue than expected. Advanced Micro Devices or AMD, got a downgrade from Jefferies, from Buy to Hold and they lowered their price target. Now, what does all this mean for your wallet? Trade policy is likely to stay messy. These tariffs could spark some retaliation and mess with the economy. My advice? Diversify! U.S. equity markets are wobbly, and trade is uncertain. International developed largecap stocks and U.S. investmentgrade bonds have been doing well this year. Be picky with your stocks! Countrylevel events are creating opportunities in global stocks. I'd suggest overweighting U.S. stocks on a six to 12month basis, but watch out, uncertainty could hurt both U.S. and global assets. Looking ahead, GDP growth is expected to slow to 2.2% in 2025 and 1.3% in 2026. There's about a 40% chance of a recession in the next 12 months. The federal budget deficit is expected to rise slightly from 6.2% of GDP in 2024 to 6.8% in 2025 before decreasing. Okay, before I sign off, I have a joke. Why do accountants make good drivers? They know how to "balance" the books and their speed! That's all for today, folks. Keep those portfolios diversified, and I'll catch you next time on Spy Trader!