SPY Trader’s Market Rollercoaster

Fresh news and strategies for traders. SPY Trader episode #1005. Hey everyone, it's your pal, Funny Moneybags, back with another episode of Spy Trader! It's Friday, March 7th, and the time is 5AM here on the West Coast. Buckle up, because the market's been a bit of a rollercoaster lately. How do you calm a wild stockbroker? Talk about a "stable" market. Now, let's dive into what's been moving the S&P 500. The big story today is that US equities are under pressure. The S&P 500 is down, testing its 200day moving average. All sectors are lower, with tech and consumer discretionary taking the biggest hits. We're seeing a lot of bearish sentiment out there, driven by a few key factors. First off, trade war fears are back in a big way. New tariffs from the Trump administration on goods from Canada, Mexico, and China are raising concerns about higher prices and disrupted supply chains. The market is worried these aren't just negotiating tactics. On top of that, there are mounting concerns about the US economy slowing down. We saw a dip in retail sales in January, and unfortunately job market is cooling, with layoffs in February reaching their highest level since July 2020. And let's not forget inflation, which is still stubbornly above the Federal Reserve's 2% target. All of this is contributing to increased volatility. The VIX, which is the volatility index, is closing in on 25 after chilling around 15 for most of February. What does this all mean for your investments? Well, diversification is key in this kind of market. Those highflying tech and consumer discretionary sectors that led the S&P 500 in 2023 and 2024 are now lagging. Defensive sectors like health care and consumer staples, along with cyclicals like financials, have been showing some strength. We also need to keep a close eye on those tariffs. They could reaccelerate inflation and slow economic growth. Retaliatory trade actions could really mess with corporate earnings. And of course, the Federal Reserve's decisions on interest rates will be crucial. Continued earnings growth is what we need to sustain the bull market. Now, let's look at some specific companies and news that could impact the S&P 500. While S&P Global Ratings is concerned that CK Hutchison Holdings sale of its ports business will reduce diversification, it is unlikely to have a direct impact on the S&P 500. The Nasdaq 100 is in correction territory, and Jim Cramer is suggesting that Broadcom's strong earnings might not be enough to spark a significant market rebound due to overall market conditions. This could mean continued choppiness for the S&P 500. AMD has been underperforming the S&P 500 and Nvidia, but analysts think it could be a good pick for a recovery in 2025. Its forward P/E ratio is below the S&P 500's, but as always, please do your own research. We're also seeing some interesting moves in consumer discretionary. Kirkland's and Wayfair are oversold, but that doesn't necessarily mean the whole sector or the S&P 500 will bounce back. Tesla's getting some good news out of China with 200,000 orders for the refreshed Model Y. That's a positive for Tesla, but also indicative of continued growth in EV demand. Bill Ackman is trying to acquire Howard Hughes Holdings, but that's unlikely to have a major impact on the S&P 500 directly. Finally, it's crucial to stay informed and adaptable. The market is always changing, and what worked yesterday might not work today. I'll be back soon with another update. Until then, happy trading!