September 15, 2025 • 7 mins
Fresh news and strategies for traders. SPY Trader episode #1366.
This episode covers the cautious optimism in the U.S. stock market, with futures showing slight gains ahead of an anticipated 25basispoint rate cut from the Federal Reserve this week, despite sticky inflation and a cooling labor market. Key corporate news includes Oracle's AI cloud contracts, Opendoor's leadership changes, Nvidia's antitrust probe, and Merck's FDA designation. The analysis highlights a balance between strong corporate earnings and AI optimism versus inflation, a soft labor market, and high valuations. Trading recommendations include broad market ETFs, smallcap value ETFs, diversified tech plays like QQQ and Oracle, defensive healthcare options such as XLV and Merck, and fixed income ETFs for stability.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome back , traders , investors , and finance fanatics !
This is your host , Baron Bullish , bringing you the latest market insights here on Spy Trader .
It's 6 am on Monday , September 15th , 2025 , Pacific time , and we're diving into what's driving the markets this hour .
Let's get right into it!The U.S.
(00:21):
stock market is kicking off the week with cautious optimism .
Futures are showing slight upward movement across the board , with the Russell 2000 leading with a 0.32% gain , followed by the Dow up 0.17% , S&P 500 up 0.16% , and Nasdaq up 0.06% .
This positive start comes as investors are largely anticipating a key event this week (00:45):
a rate cut from the Federal Reserve .
Speaking of the Fed , the big news this week is the FOMC meeting scheduled for September 16th and 17th .
Market participants are widely expecting a 25basispoint rate cut , with a 90% likelihood .
(01:08):
This comes despite inflation , with the U.S.
CPI rising to 2.9% for the 12 months ending August 2025 , still above the Fed's 2% target .
Meanwhile , the labor market is showing signs of cooling .
August saw only 22,000 new jobs added , a significant slowdown , and the unemployment rate slightly increased to 4.3% .
(01:32):
Longterm unemployment is also at a postpandemic high , suggesting a more challenging environment for job seekers .
In corporate news , Oracle saw a huge surge of approximately 50% intraday on September 10th after securing major cloud contracts , including a deal with OpenAI , further fueling the AI excitement .
(01:54):
Opendoor Technologies jumped around 80% on September 11th after leadership changes were announced .
Nvidia , however , is facing a 2.4% premarket decline today due to a preliminary antitrust investigation by China .
On a positive note , Hesai Technology announced an expanded production agreement exceeding 40 million dollars with a leading U.S.
(02:16):
robotaxi company .
Merck also received Breakthrough Therapy Designation from the FDA for a key ovarian cancer drug .
Now for our analysis and insights .
The market is currently walking a tightrope between bullish drivers and macroeconomic headwinds .
On the optimistic side , we've got strong corporate earnings – 82% of S&P 500 companies beat estimates last quarter – and the relentless optimism surrounding artificial intelligence .
(02:47):
The anticipated Fed rate cut is also providing a tailwind , signaling an easing monetary policy that typically benefits equities .
However , we can't ignore the yellow flags .
Inflation remains sticky above the Fed's target , and our labor market is clearly softening , with fewer jobs being added and rising longterm unemployment .
(03:09):
This could eventually impact consumer spending .
Valuations are also a concern , with the S&P 500's forward P/E ratio at 22x , well above its 30year average of 17x .
This suggests that while there's growth , it's already priced in , making selectivity key .
Sector performance has been interesting .
(03:31):
Yeartodate , Conglomerates , Basic Materials , and Utilities have been leaders .
But August saw a notable reversal , with Healthcare emerging as the top performer and Utilities trailing , despite being a YTD leader .
Technology , a major driver earlier in the year , lagged in August , rising only 0.3% .
(03:54):
This hints at a potential rotation , with sectors like Communications , Real Estate , Energy , and Healthcare now identified as offering better value , and smallcap stocks trading at a significant discount .
Given this complex landscape , here are our concrete trading recommendations (04:09):
First , for broad market exposure with a strategic tilt towards value and smallcaps , we recommend maintaining core holdings in broad market ETFs like the Vanguard S&P 500 ETF , ticker VOO , or the iShares CORE S&P 500 ETF , ticker IVV .
(04:33):
To capture the undervalued segments , consider supplementing with smallcap value ETFs such as the Vanguard SmallCap Value ETF , ticker VBR , or the iShares S&P SmallCap 600 Value ETF , ticker IJS .
This strategy allows you to participate in overall market gains while also tapping into segments with potentially greater upside due to undervaluation .
(05:00):
Second , to capitalize on the AI boom , it's wise to approach with some caution due to high valuations and regulatory scrutiny .
For diversified tech exposure that benefits from AI , the Invesco QQQ Trust , ticker QQQ , is a solid choice , concentrating on the largest nonfinancial companies on the Nasdaq .
(05:21):
If you're looking for individual stocks , Oracle , ticker ORCL , is an excellent example given its recent surge from securing major AI cloud contracts .
For a less direct but robust AI infrastructure play , consider Arista Networks , which has seen strong earnings growth driven by its expanding influence in AI.Third , for defensive plays with potential value , especially with a cooling labor market , we like the Healthcare sector .
(05:50):
The Health Care Select Sector SPDR Fund , ticker XLV , is a good option , as it was the topperforming sector in August and is considered to offer value .
Within healthcare , pharmaceutical companies like Merck , ticker MRK , could be interesting , particularly given its recent Breakthrough Therapy Designation for a key oncology drug .
(06:13):
The Consumer Staples Select Sector SPDR Fund , ticker XLP , also offers stability , as these companies are less sensitive to economic downturns .
Finally , for stability and diversification , fixed income remains a crucial part of any portfolio , especially with an anticipated rate cut .
(06:33):
Broadbased , investmentgrade bond ETFs like the iShares Core U.S.
Aggregate Bond ETF , ticker AGG , or the Vanguard Total Bond Market ETF , ticker BND , are excellent choices , offering exposure to bonds that could benefit from an easing monetary policy .
Remember , the market remains sensitive to upcoming economic data and Fed announcements , and geopolitical risks , especially ongoing trade tensions , are always a factor .
(07:04):
Always consider your own risk tolerance and investment goals .
That's all for this edition of Spy Trader .
I'm Baron Bullish , and I'll catch you on the next market update !
Welcome back , traders , investors , and finance fanatics !
This is your host , Baron Bullish , bringing you the latest market insights here on Spy Trader .
It's 6 am on Monday , September 15th , 2025 , Pacific time , and we're diving into what's driving the markets this hour .
Let's get right into it!The U.S.
(00:21):
stock market is kicking off the week with cautious optimism .
Futures are showing slight upward movement across the board , with the Russell 2000 leading with a 0.32% gain , followed by the Dow up 0.17% , S&P 500 up 0.16% , and Nasdaq up 0.06% .
This positive start comes as investors are largely anticipating a key event this week (00:45):
a rate cut from the Federal Reserve .
Speaking of the Fed , the big news this week is the FOMC meeting scheduled for September 16th and 17th .
Market participants are widely expecting a 25basispoint rate cut , with a 90% likelihood .
(01:08):
This comes despite inflation , with the U.S.
CPI rising to 2.9% for the 12 months ending August 2025 , still above the Fed's 2% target .
Meanwhile , the labor market is showing signs of cooling .
August saw only 22,000 new jobs added , a significant slowdown , and the unemployment rate slightly increased to 4.3% .
(01:32):
Longterm unemployment is also at a postpandemic high , suggesting a more challenging environment for job seekers .
In corporate news , Oracle saw a huge surge of approximately 50% intraday on September 10th after securing major cloud contracts , including a deal with OpenAI , further fueling the AI excitement .
(01:54):
Opendoor Technologies jumped around 80% on September 11th after leadership changes were announced .
Nvidia , however , is facing a 2.4% premarket decline today due to a preliminary antitrust investigation by China .
On a positive note , Hesai Technology announced an expanded production agreement exceeding 40 million dollars with a leading U.S.
(02:16):
robotaxi company .
Merck also received Breakthrough Therapy Designation from the FDA for a key ovarian cancer drug .
Now for our analysis and insights .
The market is currently walking a tightrope between bullish drivers and macroeconomic headwinds .
On the optimistic side , we've got strong corporate earnings – 82% of S&P 500 companies beat estimates last quarter – and the relentless optimism surrounding artificial intelligence .
(02:47):
The anticipated Fed rate cut is also providing a tailwind , signaling an easing monetary policy that typically benefits equities .
However , we can't ignore the yellow flags .
Inflation remains sticky above the Fed's target , and our labor market is clearly softening , with fewer jobs being added and rising longterm unemployment .
(03:09):
This could eventually impact consumer spending .
Valuations are also a concern , with the S&P 500's forward P/E ratio at 22x , well above its 30year average of 17x .
This suggests that while there's growth , it's already priced in , making selectivity key .
Sector performance has been interesting .
(03:31):
Yeartodate , Conglomerates , Basic Materials , and Utilities have been leaders .
But August saw a notable reversal , with Healthcare emerging as the top performer and Utilities trailing , despite being a YTD leader .
Technology , a major driver earlier in the year , lagged in August , rising only 0.3% .
(03:54):
This hints at a potential rotation , with sectors like Communications , Real Estate , Energy , and Healthcare now identified as offering better value , and smallcap stocks trading at a significant discount .
Given this complex landscape , here are our concrete trading recommendations (04:09):
First , for broad market exposure with a strategic tilt towards value and smallcaps , we recommend maintaining core holdings in broad market ETFs like the Vanguard S&P 500 ETF , ticker VOO , or the iShares CORE S&P 500 ETF , ticker IVV .
(04:33):
To capture the undervalued segments , consider supplementing with smallcap value ETFs such as the Vanguard SmallCap Value ETF , ticker VBR , or the iShares S&P SmallCap 600 Value ETF , ticker IJS .
This strategy allows you to participate in overall market gains while also tapping into segments with potentially greater upside due to undervaluation .
(05:00):
Second , to capitalize on the AI boom , it's wise to approach with some caution due to high valuations and regulatory scrutiny .
For diversified tech exposure that benefits from AI , the Invesco QQQ Trust , ticker QQQ , is a solid choice , concentrating on the largest nonfinancial companies on the Nasdaq .
(05:21):
If you're looking for individual stocks , Oracle , ticker ORCL , is an excellent example given its recent surge from securing major AI cloud contracts .
For a less direct but robust AI infrastructure play , consider Arista Networks , which has seen strong earnings growth driven by its expanding influence in AI.Third , for defensive plays with potential value , especially with a cooling labor market , we like the Healthcare sector .
(05:50):
The Health Care Select Sector SPDR Fund , ticker XLV , is a good option , as it was the topperforming sector in August and is considered to offer value .
Within healthcare , pharmaceutical companies like Merck , ticker MRK , could be interesting , particularly given its recent Breakthrough Therapy Designation for a key oncology drug .
(06:13):
The Consumer Staples Select Sector SPDR Fund , ticker XLP , also offers stability , as these companies are less sensitive to economic downturns .
Finally , for stability and diversification , fixed income remains a crucial part of any portfolio , especially with an anticipated rate cut .
(06:33):
Broadbased , investmentgrade bond ETFs like the iShares Core U.S.
Aggregate Bond ETF , ticker AGG , or the Vanguard Total Bond Market ETF , ticker BND , are excellent choices , offering exposure to bonds that could benefit from an easing monetary policy .
Remember , the market remains sensitive to upcoming economic data and Fed announcements , and geopolitical risks , especially ongoing trade tensions , are always a factor .
(07:04):
Always consider your own risk tolerance and investment goals .
That's all for this edition of Spy Trader .
I'm Baron Bullish , and I'll catch you on the next market update !
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