Market Winds: Tariffs, Trade, and Taking Profit

Fresh news and strategies for traders. SPY Trader episode #1154. Hey folks, it's your pal Penny Pincher here, and welcome to Spy Trader! It's 6 pm on Friday, May 9th, 2025, Pacific time, and we're diving headfirst into the wild world of Wall Street. Buckle up, because this week's been a rollercoaster! Let's break down what's been shaking the markets. This week the S&P 500 dipped slightly, ending the week down about half a percent. That's the first time in seven weeks we haven't seen a move bigger than one and a half percent, so things are cooling off a bit. Remember those tariff tantrums we saw earlier in April? Well, the market's still feeling those jitters, so expect more ups and downs. Right now, all sectors are rated as 'Marketperform', which means they are expected to perform about the same as the S&P 500. Nobody is expecting huge gains right now. Sectorwise, most sectors ended the day on May 1st in positive territory, except for energy and consumer discretionary, which took a little dip. On the flip side, industrials and consumer staples saw some gains. Health Care and Communication Services showed the strongest earnings growth for the first quarter. But watch out, earnings growth for consumer discretionary is expected to slow down this year. On the macro front, things are looking a little sluggish. The US economy is expected to slow down this year, and those tariffs are really starting to bite, potentially shaving off almost a full percentage point from GDP growth. Inflation is also expected to creep up, and consumer sentiment is starting to wane as folks worry about the economy. There's been a ton of news swirling around, especially those ongoing trade tensions between the US and China, plus the IndiaPakistan situation. Good news though, the US and the UK shook hands on a trade deal. The Federal Reserve decided to hold steady on interest rates, so no change there. Companywise, Birla Corporation saw a boost in profits, L&T's profits jumped too, and Axon Enterprise, the folks who make those tasers, their shares went wild after they smashed earnings expectations! Even Warner Bros. Discovery had a good week even with revenue dropping year over year. So, what's a savvy investor to do? Given the recent market rebound, now might be a good time to lock in some profits on those overweight positions and bring things back to a more neutral stance. If you're in it for the long haul, stick with a marketweight position. With all sectors looking neutral, focus on good value and core investments. Energy sector looks potentially attractive. Keep a close eye on those trade negotiations, they're going to keep driving market volatility. And remember, keep some cash on hand, some 'dry powder' as they say, so you can pounce if the market dips and things get cheap. That's all for today, folks! Remember, I'm just a humble podcast host, not your personal financial advisor. Do your own research, and happy trading!