June 26, 2025 • 13 mins
Fresh news and strategies for traders. SPY Trader episode #1266.
Hey there, Spy Traders! It's Money Mike, your friendly neighborhood financial guru, here to kickstart your day with the latest market scoop. It's 6 am on Thursday, June 26th, 2025, Pacific time, and we've got a lot to unpack. The US stock market is showing a mixed but generally positive performance, with major indices still near alltime highs, driven by a resilient economy and anticipation of a gradual easing cycle from the Federal Reserve.However, underlying concerns like inflation pressures from tariffs and moderating growth are definitely tempering the outlook.Let's dive into the key news items. As of today, the S&P 500 is up by about 0.96%, trading around 6,025, and it's climbed over 11% in the last year, hovering near its alltime high from February. The Dow Jones Industrial Average is up by 0.89% today, sitting at 42,581, and it's seen a solid 9% increase over the year. The techheavy Nasdaq Composite has gained 0.94% today, reaching 19,630, also near record highs, with the NASDAQ 100 up over 15% yeartodate.The market's seen a significant rebound since a steep drop back in March and April when tariff policy announcements had the S&P 500 flirting with a bear market.Now, for sector performance, Technology and Communication Services are leading the pack. Information Technology is up 7.49% yeartodate, and Communication Services is up 8.12% yeartodate. Large companies like Nvidia and AMD are big contributors here. Industrials are also showing strong yeartodate performance, up 9.50%, and Financials are up 6.60%. On the flip side, Utilities and Real Estate are currently lagging, with Real Estate down 2.45% daily and Utilities down 1.34% daily. Consumer Discretionary is down 3.78% yeartodate, Healthcare is down 2.70%, and Energy is down 2.47%.In recent news, a fragile ceasefire between Israel and Iran has provided some market support, helping deescalate tensions. However, the impact of President Trump's new tariffs is a significant theme. While so far, tariffs have had a limited impact on overall inflation, analysts expect upward pressure on goods prices in the second half of 2025 as pretariff inventories deplete. The average effective tariff rate is around 15%, the highest since 1936. On the economic data front, weekly jobless claims held steady. And we're keeping an eye out for upcoming earnings reports from major companies like Walgreens and Nike.Diving into macroeconomic conditions, the Federal Reserve has held interest rates steady at 4.25% to 4.5% for the fourth consecutive meeting, adopting a 'waitandsee' approach. While the decision was unanimous, there's a growing divide within the Fed, with some officials anticipating no rate cuts this year, while others still expect two. The Fed is described as being in a 'gradual easing cycle,' similar to 1995. Inflationwise, the annual CPI for May 2025 increased to 2.4% from 2.3% in April, marking the first acceleration in four months. Core inflation remained at 2.8% in April. Forecasts suggest inflation could rise noticeably from the third quarter of 2025, potentially exceeding 3% yearonyear, primarily due to tariff impacts.For GDP growth, the US economy contracted by 0.2% in the first quarter of 2025, the first contraction in three years, partly due to a surge in imports in anticipation of higher tariffs. However, the economy is poised for a strong rebound in the second quarter, with the Atlanta Fed's realtime GDP estimate pointing to 3.4% growth. The Fed expects real GDP growth to slow to 1.4% for the full year 2025. Employment remains relatively stable, with total nonfarm payroll employment increasing by 139,000 in May, and the unemployment rate unchanged at 4.2%. And yes, the US national debt is climbing rapidly, on track to double over the next three decades, which raises longterm fiscal concerns.Let's talk about some company events. Nvidia has resecured its position as the world's most valuable company. It
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hey there , Spy Traders !
It's Money Mike , your friendly neighborhood financial guru , here to kickstart your day with the latest market scoop .
It's 6 am on Thursday , June 26th , 2025 , Pacific time , and we've got a lot to unpack .
The US stock market is showing a mixed but generally positive performance , with major indices still near alltime highs , driven by a resilient economy and anticipation of a gradual easing cycle from the Federal Reserve .
(00:30):
However , underlying concerns like inflation pressures from tariffs and moderating growth are definitely tempering the outlook .
Let's dive into the key news items .
As of today , the S&P 500 is up by about 0.96% , trading around 6,025 , and it's climbed over 11% in the last year , hovering near its alltime high from February .
(00:57):
The Dow Jones Industrial Average is up by 0.89% today , sitting at 42,581 , and it's seen a solid 9% increase over the year .
The techheavy Nasdaq Composite has gained 0.94% today , reaching 19,630 , also near record highs , with the NASDAQ 100 up over 15% yeartodate .
(01:24):
The market's seen a significant rebound since a steep drop back in March and April when tariff policy announcements had the S&P 500 flirting with a bear market .
Now , for sector performance , Technology and Communication Services are leading the pack .
Information Technology is up 7.49% yeartodate , and Communication Services is up 8.12% yeartodate .
(01:48):
Large companies like Nvidia and AMD are big contributors here .
Industrials are also showing strong yeartodate performance , up 9.50% , and Financials are up 6.60% .
On the flip side , Utilities and Real Estate are currently lagging , with Real Estate down 2.45% daily and Utilities down 1.34% daily .
(02:16):
Consumer Discretionary is down 3.78% yeartodate , Healthcare is down 2.70% , and Energy is down 2.47%.In recent news , a fragile ceasefire between Israel and Iran has provided some market support , helping deescalate tensions .
However , the impact of President Trump's new tariffs is a significant theme .
(02:41):
While so far , tariffs have had a limited impact on overall inflation , analysts expect upward pressure on goods prices in the second half of 2025 as pretariff inventories deplete .
The average effective tariff rate is around 15% , the highest since 1936 .
On the economic data front , weekly jobless claims held steady .
(03:04):
And we're keeping an eye out for upcoming earnings reports from major companies like Walgreens and Nike .
Diving into macroeconomic conditions , the Federal Reserve has held interest rates steady at 4.25% to 4.5% for the fourth consecutive meeting , adopting a ' waitandsee ' approach .
While the decision was unanimous , there's a growing divide within the Fed , with some officials anticipating no rate cuts this year , while others still expect two .
(03:34):
The Fed is described as being in a ' gradual easing cycle , ' similar to 1995 .
Inflationwise , the annual CPI for May 2025 increased to 2.4% from 2.3% in April , marking the first acceleration in four months .
Core inflation remained at 2.8% in April .
(03:56):
Forecasts suggest inflation could rise noticeably from the third quarter of 2025 , potentially exceeding 3% yearonyear , primarily due to tariff impacts .
For GDP growth , the US economy contracted by 0.2% in the first quarter of 2025 , the first contraction in three years , partly due to a surge in imports in anticipation of higher tariffs .
(04:23):
However , the economy is poised for a strong rebound in the second quarter , with the Atlanta Fed's realtime GDP estimate pointing to 3.4% growth .
The Fed expects real GDP growth to slow to 1.4% for the full year 2025 .
Employment remains relatively stable , with total nonfarm payroll employment increasing by 139,000 in May , and the unemployment rate unchanged at 4.2% .
(04:53):
And yes , the US national debt is climbing rapidly , on track to double over the next three decades , which raises longterm fiscal concerns .
Let's talk about some company events .
Nvidia has resecured its position as the world's most valuable company .
Its shares hit fivemonth highs and are nearing record closes , with anticipation building around its shareholder meeting today and continued strong demand fueled by AI .
(05:21):
Advanced Micro Devices , or AMD , shares are also showing gains , contributing to the strong performance in the technology and semiconductor sectors .
Super Micro Computer , or SMCI , has seen significant price increases .
Analysts suggest Micron is gaining market share in AI .
(05:42):
Wedbush raised its price target on Microsoft , citing AI's potential to transform its cloud growth trajectory .
AT&T recently settled data breach lawsuits for 177 million dollars .
Stellantis NV shares rose after an upgrade from Jefferies , with data suggesting an earnings turnaround .
(06:04):
And Circle Internet Group saw a rise after a significant plummet , possibly indicating profittaking after a fierce rally postIPO.Now , for my analysis and insights .
The current state of the US stock market reflects a delicate balance of bullish momentum and looming uncertainties .
(06:24):
The strong performance of the S&P 500 , Dow , and Nasdaq , particularly the tech sector , is largely attributable to continued excitement around Artificial Intelligence and the robust earnings potential of companies like Nvidia , AMD , and Microsoft .
This AIdriven rally is a significant tailwind for the market , pulling up overall index performance .
(06:48):
Macroeconomic conditions present a more nuanced picture .
The Federal Reserve's decision to hold interest rates steady signals a patient approach , allowing the economy to absorb previous tightening measures .
The expectation of a ' gradual easing cycle ' is generally positive for equities , as lower rates can reduce borrowing costs for companies and make stocks more attractive compared to bonds .
(07:14):
However , the internal division within the Fed regarding future rate cuts highlights uncertainty and could lead to market volatility if expectations shift .
The GDP data shows a mixed trend (07:25):
a contraction in Q1 2025 followed by a projected rebound in Q2 .
This indicates some underlying resilience , but the Q1 contraction , partly due to tariffinduced import surges , suggests vulnerabilities to trade policy .
The rising national debt is a longterm concern that could eventually impact investor confidence and fiscal policy flexibility .
(07:54):
Inflation , while currently moderate , is expected to face upward pressure in the second half of 2025 due to tariffs .
This could force the Fed to maintain higher rates for longer or even reconsider its easing path , potentially dampening market enthusiasm .
The employment picture remains solid with a low unemployment rate , which supports consumer spending , a key driver of the economy .
(08:19):
Sector performance underscores the market's current focus .
The outperformance of technology and communication services reflects their growth potential and resilience , particularly in the AI narrative .
The lagging performance of real estate and utilities , despite stable bond yields , could be due to specific sector headwinds such as new home sales missing consensus , indicating softness in the housing market , or simply profittaking after previous strong runs .
(08:51):
Overall , the market is navigating a period of economic resilience balanced against inflationary pressures from tariffs and geopolitical risks .
The ' waitandsee ' approach from the Fed and the market's reliance on a few largecap tech companies for gains highlight the current dynamics .
Alright , let's get to some concrete recommendations for your portfolio .
(09:13):
First , I'd say maintain diversification but with a tilt towards growth .
While technology and AIrelated stocks are performing strongly , relying solely on them can increase risk .
A diversified portfolio with exposure to resilient sectors can mitigate potential downturns .
However , the strong tailwinds from AI suggest continued , albeit perhaps choppier , growth in this area .
(09:41):
So , continue to hold exposure to strong Information Technology and Communication Services companies , particularly those with clear AI integration and growth strategies , like cloud computing or semiconductor leaders .
Balance this with exposure to Industrials and potentially Financials , which are showing solid yeartodate gains and can benefit from a moderately growing economy .
(10:06):
Second , monitor inflation and Federal Reserve communications closely .
Expected tariffdriven inflation in the second half of 2025 could influence the Fed's monetary policy path .
Any deviation from the anticipated ' gradual easing ' could trigger market corrections .
Pay close attention to upcoming inflation reports , especially PCE , the Fed's preferred gauge , and any statements from Fed officials .
(10:34):
Consider inflationprotected securities , or TIPS , if inflation shows signs of becoming persistent or significantly higher than forecasts .
Third , evaluate your exposure to ratesensitive sectors carefully .
While the Fed is holding rates steady for now , the ' higher for longer ' narrative for interest rates could persist if inflation proves stubborn .
(10:57):
This environment generally impacts interestrate sensitive sectors like Real Estate and Utilities .
If you have significant exposure to Real Estate or Utilities , review their specific company fundamentals and consider if their valuations fully account for the potential for prolonged higher rates or sectorspecific headwinds , like that soft housing data we're seeing .
(11:21):
Look for companies with strong balance sheets and consistent cash flows .
Fourth , stay informed on geopolitical developments and trade policy .
Geopolitical risks , though currently having limited and manageable effects , can escalate rapidly and introduce significant market volatility .
Tariff policies are a direct and ongoing influence on inflation and corporate costs .
(11:46):
Keep an eye on international relations and any new developments or shifts in trade policies , as these can quickly alter market sentiment and corporate profitability .
Fifth , focus on companies with strong fundamentals and pricing power .
In an environment where inflation might pick up due to tariffs , companies with strong brand recognition , essential products or services , or costcutting abilities , meaning pricing power , are better positioned to pass on increased costs to consumers without significantly impacting demand .
(12:21):
Prioritize companies with a history of consistent earnings growth , healthy profit margins , and a competitive advantage .
Look into earnings reports of individual companies like Walgreens and Nike as they are released to assess their performance amidst current conditions .
And finally , consider active management or diversified ETFs .
(12:43):
The market's gains are increasingly concentrated in a few largecap tech companies .
An equalweight S&P 500 index has actually underperformed the marketcap weighted index , suggesting a narrower market breadth .
For investors seeking broader exposure , consider actively managed funds or diversified exchangetraded funds , or ETFs , that spread investments across various sectors and market capitalizations , rather than relying solely on heavily weighted index funds .
(13:15):
By adopting a balanced and informed approach , investors can navigate the current US stock market , which presents both opportunities driven by technological innovation and challenges posed by macroeconomic uncertainties .
That's it for today , Spy Traders .
Money Mike signing off , happy trading !
Hey there , Spy Traders !
It's Money Mike , your friendly neighborhood financial guru , here to kickstart your day with the latest market scoop .
It's 6 am on Thursday , June 26th , 2025 , Pacific time , and we've got a lot to unpack .
The US stock market is showing a mixed but generally positive performance , with major indices still near alltime highs , driven by a resilient economy and anticipation of a gradual easing cycle from the Federal Reserve .
(00:30):
However , underlying concerns like inflation pressures from tariffs and moderating growth are definitely tempering the outlook .
Let's dive into the key news items .
As of today , the S&P 500 is up by about 0.96% , trading around 6,025 , and it's climbed over 11% in the last year , hovering near its alltime high from February .
(00:57):
The Dow Jones Industrial Average is up by 0.89% today , sitting at 42,581 , and it's seen a solid 9% increase over the year .
The techheavy Nasdaq Composite has gained 0.94% today , reaching 19,630 , also near record highs , with the NASDAQ 100 up over 15% yeartodate .
(01:24):
The market's seen a significant rebound since a steep drop back in March and April when tariff policy announcements had the S&P 500 flirting with a bear market .
Now , for sector performance , Technology and Communication Services are leading the pack .
Information Technology is up 7.49% yeartodate , and Communication Services is up 8.12% yeartodate .
(01:48):
Large companies like Nvidia and AMD are big contributors here .
Industrials are also showing strong yeartodate performance , up 9.50% , and Financials are up 6.60% .
On the flip side , Utilities and Real Estate are currently lagging , with Real Estate down 2.45% daily and Utilities down 1.34% daily .
(02:16):
Consumer Discretionary is down 3.78% yeartodate , Healthcare is down 2.70% , and Energy is down 2.47%.In recent news , a fragile ceasefire between Israel and Iran has provided some market support , helping deescalate tensions .
However , the impact of President Trump's new tariffs is a significant theme .
(02:41):
While so far , tariffs have had a limited impact on overall inflation , analysts expect upward pressure on goods prices in the second half of 2025 as pretariff inventories deplete .
The average effective tariff rate is around 15% , the highest since 1936 .
On the economic data front , weekly jobless claims held steady .
(03:04):
And we're keeping an eye out for upcoming earnings reports from major companies like Walgreens and Nike .
Diving into macroeconomic conditions , the Federal Reserve has held interest rates steady at 4.25% to 4.5% for the fourth consecutive meeting , adopting a ' waitandsee ' approach .
While the decision was unanimous , there's a growing divide within the Fed , with some officials anticipating no rate cuts this year , while others still expect two .
(03:34):
The Fed is described as being in a ' gradual easing cycle , ' similar to 1995 .
Inflationwise , the annual CPI for May 2025 increased to 2.4% from 2.3% in April , marking the first acceleration in four months .
Core inflation remained at 2.8% in April .
(03:56):
Forecasts suggest inflation could rise noticeably from the third quarter of 2025 , potentially exceeding 3% yearonyear , primarily due to tariff impacts .
For GDP growth , the US economy contracted by 0.2% in the first quarter of 2025 , the first contraction in three years , partly due to a surge in imports in anticipation of higher tariffs .
(04:23):
However , the economy is poised for a strong rebound in the second quarter , with the Atlanta Fed's realtime GDP estimate pointing to 3.4% growth .
The Fed expects real GDP growth to slow to 1.4% for the full year 2025 .
Employment remains relatively stable , with total nonfarm payroll employment increasing by 139,000 in May , and the unemployment rate unchanged at 4.2% .
(04:53):
And yes , the US national debt is climbing rapidly , on track to double over the next three decades , which raises longterm fiscal concerns .
Let's talk about some company events .
Nvidia has resecured its position as the world's most valuable company .
Its shares hit fivemonth highs and are nearing record closes , with anticipation building around its shareholder meeting today and continued strong demand fueled by AI .
(05:21):
Advanced Micro Devices , or AMD , shares are also showing gains , contributing to the strong performance in the technology and semiconductor sectors .
Super Micro Computer , or SMCI , has seen significant price increases .
Analysts suggest Micron is gaining market share in AI .
(05:42):
Wedbush raised its price target on Microsoft , citing AI's potential to transform its cloud growth trajectory .
AT&T recently settled data breach lawsuits for 177 million dollars .
Stellantis NV shares rose after an upgrade from Jefferies , with data suggesting an earnings turnaround .
(06:04):
And Circle Internet Group saw a rise after a significant plummet , possibly indicating profittaking after a fierce rally postIPO.Now , for my analysis and insights .
The current state of the US stock market reflects a delicate balance of bullish momentum and looming uncertainties .
(06:24):
The strong performance of the S&P 500 , Dow , and Nasdaq , particularly the tech sector , is largely attributable to continued excitement around Artificial Intelligence and the robust earnings potential of companies like Nvidia , AMD , and Microsoft .
This AIdriven rally is a significant tailwind for the market , pulling up overall index performance .
(06:48):
Macroeconomic conditions present a more nuanced picture .
The Federal Reserve's decision to hold interest rates steady signals a patient approach , allowing the economy to absorb previous tightening measures .
The expectation of a ' gradual easing cycle ' is generally positive for equities , as lower rates can reduce borrowing costs for companies and make stocks more attractive compared to bonds .
(07:14):
However , the internal division within the Fed regarding future rate cuts highlights uncertainty and could lead to market volatility if expectations shift .
The GDP data shows a mixed trend (07:25):
a contraction in Q1 2025 followed by a projected rebound in Q2 .
This indicates some underlying resilience , but the Q1 contraction , partly due to tariffinduced import surges , suggests vulnerabilities to trade policy .
The rising national debt is a longterm concern that could eventually impact investor confidence and fiscal policy flexibility .
(07:54):
Inflation , while currently moderate , is expected to face upward pressure in the second half of 2025 due to tariffs .
This could force the Fed to maintain higher rates for longer or even reconsider its easing path , potentially dampening market enthusiasm .
The employment picture remains solid with a low unemployment rate , which supports consumer spending , a key driver of the economy .
(08:19):
Sector performance underscores the market's current focus .
The outperformance of technology and communication services reflects their growth potential and resilience , particularly in the AI narrative .
The lagging performance of real estate and utilities , despite stable bond yields , could be due to specific sector headwinds such as new home sales missing consensus , indicating softness in the housing market , or simply profittaking after previous strong runs .
(08:51):
Overall , the market is navigating a period of economic resilience balanced against inflationary pressures from tariffs and geopolitical risks .
The ' waitandsee ' approach from the Fed and the market's reliance on a few largecap tech companies for gains highlight the current dynamics .
Alright , let's get to some concrete recommendations for your portfolio .
(09:13):
First , I'd say maintain diversification but with a tilt towards growth .
While technology and AIrelated stocks are performing strongly , relying solely on them can increase risk .
A diversified portfolio with exposure to resilient sectors can mitigate potential downturns .
However , the strong tailwinds from AI suggest continued , albeit perhaps choppier , growth in this area .
(09:41):
So , continue to hold exposure to strong Information Technology and Communication Services companies , particularly those with clear AI integration and growth strategies , like cloud computing or semiconductor leaders .
Balance this with exposure to Industrials and potentially Financials , which are showing solid yeartodate gains and can benefit from a moderately growing economy .
(10:06):
Second , monitor inflation and Federal Reserve communications closely .
Expected tariffdriven inflation in the second half of 2025 could influence the Fed's monetary policy path .
Any deviation from the anticipated ' gradual easing ' could trigger market corrections .
Pay close attention to upcoming inflation reports , especially PCE , the Fed's preferred gauge , and any statements from Fed officials .
(10:34):
Consider inflationprotected securities , or TIPS , if inflation shows signs of becoming persistent or significantly higher than forecasts .
Third , evaluate your exposure to ratesensitive sectors carefully .
While the Fed is holding rates steady for now , the ' higher for longer ' narrative for interest rates could persist if inflation proves stubborn .
(10:57):
This environment generally impacts interestrate sensitive sectors like Real Estate and Utilities .
If you have significant exposure to Real Estate or Utilities , review their specific company fundamentals and consider if their valuations fully account for the potential for prolonged higher rates or sectorspecific headwinds , like that soft housing data we're seeing .
(11:21):
Look for companies with strong balance sheets and consistent cash flows .
Fourth , stay informed on geopolitical developments and trade policy .
Geopolitical risks , though currently having limited and manageable effects , can escalate rapidly and introduce significant market volatility .
Tariff policies are a direct and ongoing influence on inflation and corporate costs .
(11:46):
Keep an eye on international relations and any new developments or shifts in trade policies , as these can quickly alter market sentiment and corporate profitability .
Fifth , focus on companies with strong fundamentals and pricing power .
In an environment where inflation might pick up due to tariffs , companies with strong brand recognition , essential products or services , or costcutting abilities , meaning pricing power , are better positioned to pass on increased costs to consumers without significantly impacting demand .
(12:21):
Prioritize companies with a history of consistent earnings growth , healthy profit margins , and a competitive advantage .
Look into earnings reports of individual companies like Walgreens and Nike as they are released to assess their performance amidst current conditions .
And finally , consider active management or diversified ETFs .
(12:43):
The market's gains are increasingly concentrated in a few largecap tech companies .
An equalweight S&P 500 index has actually underperformed the marketcap weighted index , suggesting a narrower market breadth .
For investors seeking broader exposure , consider actively managed funds or diversified exchangetraded funds , or ETFs , that spread investments across various sectors and market capitalizations , rather than relying solely on heavily weighted index funds .
(13:15):
By adopting a balanced and informed approach , investors can navigate the current US stock market , which presents both opportunities driven by technological innovation and challenges posed by macroeconomic uncertainties .
That's it for today , Spy Traders .
Money Mike signing off , happy trading !
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