Decoding the Market’s Mixed Signals

The SPY Trader

Fresh news and strategies for traders. SPY Trader episode #1119. Hey everyone, it's your pal Wanda Wallstreet here, and welcome to Spy Trader! It's 12 pm on Thursday, April 24th, 2025, Pacific Time, and we're diving into the latest market happenings. So, buckle up, buttercups! Let's get to the bottom of all these mixed signals. This week, the market took a little dip with the S&P 500 down 1.5% and the Nasdaq taking an even bigger tumble at 2.6%. Yeartodate, we're still seeing red with the S&P down 10.2% and the Nasdaq down 15.7%. But hey, S&P futures are looking kinda flat right now, so maybe the bleeding has stopped... for now. Remember, the US500 reached an all time high in February, but has decreased 7.13% since the start of the year. In sector performance, we saw that in 2024, communication services and information technology were the superstars, mainly thanks to a few tech giants. But this Thursday, tech and communication are still outperforming, while defensive sectors like consumer staples are lagging. What's driving all this choppiness? Well, tariff uncertainty is a big one, especially those new export restrictions on semiconductors to China, which are putting pressure on companies like NVIDIA. Speaking of the Fed, Chair Powell is playing it cool, hinting they'll stay patient on rate cuts, especially with those tariffs potentially messing with both inflation and growth. Don't forget, the Federal Reserve left its target for the federal funds rate unchanged on March 19. Vanguard thinks we might see two rate cuts later this year, but who knows, right? Earnings season is still in full swing. Alphabet is reporting after the bell today, so keep an eye on that. Plus, we're keeping tabs on those USIran nuclear talks because any progress there could mean sanctions relief. As for economic data, core durable goods were a bit of a letdown, but jobless claims ticked up a bit. So, what's the big picture? Things are slowing down a bit due to slower income growth, fading fiscal stimulus, higher interest rates, and all this tariff drama. GDP growth is also expected to slow down this year and next. Inflation might be around 4% this year thanks to those tariffs, and unemployment is expected to creep up a bit. People are still spending money, but not as much as before. Keep an eye on Philip Morris, IBM, and AT&T, because they have earnings coming up. And back to NVIDIA, those export restrictions are definitely something to watch. So, what could happen? Well, if tariffs stay around 10%, we can probably muddle through. But if they jump closer to 25%, we could be looking at higher inflation and maybe even a recession. There's about a 40% chance of a recession in the next year. Okay, so what should you do with all this info? Well, first off, I'm not your financial advisor, so this isn't advice, just my thoughts. But, diversification is always a good idea, right? Maybe think about leaning a bit more defensive in your investments. Keep a close watch on those tariff negotiations and how they might impact different companies. Scrutinize those earnings reports extra carefully. Be mindful of how interest rate changes might affect things. And most importantly, keep a longterm perspective. The market is gonna do what it's gonna do. In a nutshell, the US stock market is facing a lot of challenges right now, and staying informed and diversified is key. Now, before I go, I have a joke for you: Why don't financial analysts drive convertibles? They hate unpredictable markets. Thanks for tuning in to Spy Trader. Catch you next time!