August 15, 2025 • 11 mins
Fresh news and strategies for traders. SPY Trader episode #1338.
This episode provides a comprehensive financial update, noting the S&P 500's new high despite mixed Wall Street closures. Industrials are highlighted as top performers yeartodate, outpacing technology, fueled by government spending. Q2 2025 saw strong corporate earnings, but the U.S. economy grapples with rising consumer and producer costs due to tariffs. Although Q2 GDP rebounded significantly, this was partly an 'economic mirage' driven by reduced imports. Inflation remains a concern, with the Producer Price Index showing a notable increase. The labor market is cooling, and despite hotter inflation data, market sentiment still leans heavily towards a September Fed rate cut. Investment strategies emphasize diversification through broad market, industrial, value, and fixedincome ETFs, along with alternative assets like gold and real estate, while cautioning on risks like tariffs and tech concentration.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hello , Spy Traders !
I'm your host , Bull Bearington , and it's 6 am on Friday , August 15th , 2025 , Pacific time .
Grab your coffee , because we've got a lot to unpack from Wall Street's latest moves .
We're talking market highs , economic curveballs , and what it all means for your portfolio .
Let's dive in !
First up , a quick look at how the market ended its trading day yesterday .
(00:24):
Wall Street closed mixed .
The S&P 500 nudged up just 2 points , hitting a new closing high at 6,468.54 – pretty exciting stuff !
However , the techheavy Nasdaq Composite dipped slightly by 2.47 points , ending at 21,710.67 , mostly due to some softness in technology stocks .
(00:51):
The Dow Jones Industrial Average also slipped by 11.01 points , closing at 44,911.26 .
Looking at the bigger picture for 2025 , the Nasdaq is up a solid 10% yeartodate , the S&P 500 has gained 7.8% , and the Dow is up 3.4% as of early August .
(01:15):
Now , for sector performance , we've seen a bit of a shift .
Industrials have been the star performers this year , returning a whopping 15.6% and even outpacing information technology .
This is largely thanks to government spending and underlying growth trends , especially in areas like water and waste management , with companies like Republic Services , ticker RSG , showing real pricing power .
(01:42):
Technology and Communication Services are still seeing big valuation increases , fueled by the excitement around Artificial Intelligence .
Think Nvidia , ticker NVDA , Microsoft , ticker MSFT , Meta Platforms , ticker META , and Alphabet , ticker GOOGL .
These ' Magnificent Seven' tech giants are still driving massive earnings growth , while the rest of the S&P 500 has seen only marginal gains .
(02:10):
But yesterday , it wasn't all sunshine and rainbows across the board .
Eight out of the 11 broad S&P 500 sectors closed in negative territory .
The Materials Select Sector SPDR , ticker XLB , Industrials Select Sector SPDR , ticker XLI , and Consumer Staples Select Sector SPDR , ticker XLP , each dropped by about 1% or more .
(02:36):
The Financials sector has had a good year , but some analysts are noting high valuations there .
Meanwhile , investors have largely steered clear of Pharmaceutical and Biotech sectors due to uncertainties , including those new drug tariffs .
Diving into some companyspecific news and events , the second quarter of 2025 brought strong corporate earnings .
(02:58):
Over 80% of S&P 500 companies beat consensus estimates , with yearoveryear earnings growth topping 9% .
This has certainly helped propel the market to these record levels .
However , the U.S.
economy is grappling with the implications of those tariffs imposed by the current administration .
(03:20):
They're contributing to rising consumer costs and producer prices , creating what some call a ' pain delayed , not denied ' situation for inflation .
These tariffs have also impacted trade balances , business confidence , and private domestic investment , which actually fell by 15.6% in the second quarter .
(03:40):
Interestingly , the trade policy also led to a sharp drop in imports , which mechanically boosted Q2 GDP figures .
On the corporate front , Intel shares , ticker INTC , surged over 7% yesterday following reports that the Trump administration is considering acquiring a stake in the company to help fund its Ohio chip manufacturing plants .
(04:05):
This is part of a broader push to boost domestic semiconductor production .
Earlier in August , Apple shares , ticker AAPL , also jumped after the company pledged to boost investment in domestic manufacturing .
Not all news was great though ; Walt Disney Company , ticker DIS , stock declined despite beating earnings expectations , Cava Group , ticker CAVA , reported weakerthanexpected revenue , and CoreWeave saw a larger loss than anticipated .
(04:35):
Now , let's zoom out to the macroeconomic landscape .
The U.S.
economy saw a significant rebound in the second quarter of 2025 , with real GDP expanding at an annual rate of 3.0% .
That's a big improvement from a 0.5% contraction in the first quarter .
This growth was largely driven by a sharp decrease in imports and a modest 1.4% increase in consumer spending .
(05:02):
But , and this is a big but , some analysts suggest this rebound might be an ' economic mirage , ' as that decline in imports artificially inflated the GDP figure .
Underlying domestic demand actually grew at its slowest pace in two and a half years .
Thirdquarter GDP growth is currently estimated at 2.5% .
(05:24):
Inflationary pressures remain a key concern .
The Consumer Price Index for July 2025 stayed steady at 2.7% yearoveryear .
However , core CPI , which strips out volatile food and energy , rose 3.1% in July , a faster pace than June .
And here's the kicker (05:44):
the Producer Price Index for July rose a significant 0.9% , far exceeding the 0.2% consensus estimate .
Core PPI also showed a notable increase .
These figures , especially the PPI , have reignited worries about the full impact of tariffs on consumer prices .
(06:06):
The U.S.
labor market is showing signs of cooling .
The unemployment rate ticked up slightly to 4.2% in July from 4.1% in June , right in line with expectations .
Job creation has slowed dramatically , with total nonfarm payroll employment gaining only 73,000 jobs in July , and both May and June figures were revised downwards .
(06:33):
The number of longterm unemployed , meaning 27 weeks or more , increased to 1.8 million in July , which is nearly a quarter of all unemployed people , the highest percentage since February 2022 .
Regarding interest rates and the Federal Reserve , the Fed has held the federal funds rate steady at a target range of 4.25% to 4.5% throughout 2025 so far , following three cuts in late 2024 .
(07:02):
Despite the recent hotterthanexpected inflation data , especially from the PPI , market sentiment still indicates a very high probability , between 89% and 97% , of a rate cut at the September 2025 Fed meeting .
However , there's some internal division within the Fed , and some economists , like those at Morgan Stanley , disagree with the market's expectation for a September cut .
(07:30):
U.S.
Treasury Secretary Scott Bessent has even explicitly called for a 50basis point rate cut in September and a series of cuts , citing that revised labor market data .
Finally , consumer sentiment improved in July to a fivemonth high of 61.7 , with current conditions rising , though expectations fell slightly .
(07:51):
While improving , overall sentiment remains broadly negative , though worries have softened since April .
Given these complex market dynamics , a balanced approach is key .
Diversification is always wise , especially with all these economic crosscurrents .
For broad market exposure , maintaining core positions in broadmarket ETFs is prudent .
(08:13):
Think of the SPDR S&P 500 ETF Trust , ticker SPY , iShares CORE S&P 500 ETF , ticker IVV , or Vanguard S&P 500 ETF , ticker VOO .
These track the S&P 500 and give you exposure to 500 large U.S.
companies .
(08:34):
For even wider exposure across large , mid , and smallcap stocks , the Vanguard Total Stock Market ETF , ticker VTI , gives you comprehensive coverage of the entire U.S.
stock market .
Now , for sectorspecific opportunities .
Industrials , given their strong yeartodate outperformance and underlying growth , look compelling .
(08:56):
Consider the Industrial Select Sector SPDR Fund , ticker XLI , for diversified exposure .
Within industrials , remember Republic Services , ticker RSG , for its strong pricing power .
Technology and Communications are still benefitting from the AI boom , but their high valuations warrant a cautious approach .
(09:18):
If you're comfortable with higher risk , the Invesco QQQ Trust , ticker QQQ , or the Technology Select Sector SPDR Fund , ticker XLK , could be considered .
Just keep an eye on that concentration risk from the ' Magnificent Seven ' stocks like Nvidia , Microsoft , and Meta .
(09:38):
They are driving a lot of the AI gains , but at a premium .
With growth stocks trading high , value stocks appear attractively valued .
Explore valuefocused ETFs that provide exposure to companies trading below their intrinsic value .
This strategy could offer a margin of safety .
Healthcare , specifically pharmaceuticals and biotech , has been overlooked due to those tariff uncertainties .
(10:04):
If these uncertainties dissipate , these sectors could present a longterm value opportunity .
The Health Care Select Sector SPDR Fund , ticker XLV , offers broad exposure if you want to capitalize on a potential rebound .
For fixed income , with that high probability of a Fed rate cut in September , bonds could offer increased stability and income potential .
(10:28):
For broad , diversified exposure to U.S.
investmentgrade bonds , consider iShares Core U.S.
Aggregate Bond ETF , ticker AGG , or Vanguard Total Bond Market ETF , ticker BND .
These are solid core bond holdings .
If you believe in sustained lower longterm interest rates beyond initial cuts , then the iShares 20 Year Treasury Bond ETF , ticker TLT , which focuses on longterm U.S.
(10:56):
Treasury bonds , could be considered , though it's more sensitive to rate changes .
Finally , don't forget alternative asset classes for diversification and as an inflation hedge , especially with persistent inflation and economic uncertainties .
SPDR Gold Shares , ticker GLD , provides exposure to gold bullion , which is a traditional hedge .
(11:19):
And the Vanguard Real Estate ETF , ticker VNQ , invests in REITs , offering exposure to commercial real estate and potential income .
Remember to keep an eye on a few key risks (11:30):
tariff escalation and its impact , a continued deterioration in the labor market , any deviation from market expectations by the Federal Reserve , and that concentration risk in equities where a few megacap tech stocks wield a lot of influence .
That's all for today's Spy Trader .
(11:51):
Stay safe out there , do your homework , and I'll catch you next time !
Hello , Spy Traders !
I'm your host , Bull Bearington , and it's 6 am on Friday , August 15th , 2025 , Pacific time .
Grab your coffee , because we've got a lot to unpack from Wall Street's latest moves .
We're talking market highs , economic curveballs , and what it all means for your portfolio .
Let's dive in !
First up , a quick look at how the market ended its trading day yesterday .
(00:24):
Wall Street closed mixed .
The S&P 500 nudged up just 2 points , hitting a new closing high at 6,468.54 – pretty exciting stuff !
However , the techheavy Nasdaq Composite dipped slightly by 2.47 points , ending at 21,710.67 , mostly due to some softness in technology stocks .
(00:51):
The Dow Jones Industrial Average also slipped by 11.01 points , closing at 44,911.26 .
Looking at the bigger picture for 2025 , the Nasdaq is up a solid 10% yeartodate , the S&P 500 has gained 7.8% , and the Dow is up 3.4% as of early August .
(01:15):
Now , for sector performance , we've seen a bit of a shift .
Industrials have been the star performers this year , returning a whopping 15.6% and even outpacing information technology .
This is largely thanks to government spending and underlying growth trends , especially in areas like water and waste management , with companies like Republic Services , ticker RSG , showing real pricing power .
(01:42):
Technology and Communication Services are still seeing big valuation increases , fueled by the excitement around Artificial Intelligence .
Think Nvidia , ticker NVDA , Microsoft , ticker MSFT , Meta Platforms , ticker META , and Alphabet , ticker GOOGL .
These ' Magnificent Seven' tech giants are still driving massive earnings growth , while the rest of the S&P 500 has seen only marginal gains .
(02:10):
But yesterday , it wasn't all sunshine and rainbows across the board .
Eight out of the 11 broad S&P 500 sectors closed in negative territory .
The Materials Select Sector SPDR , ticker XLB , Industrials Select Sector SPDR , ticker XLI , and Consumer Staples Select Sector SPDR , ticker XLP , each dropped by about 1% or more .
(02:36):
The Financials sector has had a good year , but some analysts are noting high valuations there .
Meanwhile , investors have largely steered clear of Pharmaceutical and Biotech sectors due to uncertainties , including those new drug tariffs .
Diving into some companyspecific news and events , the second quarter of 2025 brought strong corporate earnings .
(02:58):
Over 80% of S&P 500 companies beat consensus estimates , with yearoveryear earnings growth topping 9% .
This has certainly helped propel the market to these record levels .
However , the U.S.
economy is grappling with the implications of those tariffs imposed by the current administration .
(03:20):
They're contributing to rising consumer costs and producer prices , creating what some call a ' pain delayed , not denied ' situation for inflation .
These tariffs have also impacted trade balances , business confidence , and private domestic investment , which actually fell by 15.6% in the second quarter .
(03:40):
Interestingly , the trade policy also led to a sharp drop in imports , which mechanically boosted Q2 GDP figures .
On the corporate front , Intel shares , ticker INTC , surged over 7% yesterday following reports that the Trump administration is considering acquiring a stake in the company to help fund its Ohio chip manufacturing plants .
(04:05):
This is part of a broader push to boost domestic semiconductor production .
Earlier in August , Apple shares , ticker AAPL , also jumped after the company pledged to boost investment in domestic manufacturing .
Not all news was great though ; Walt Disney Company , ticker DIS , stock declined despite beating earnings expectations , Cava Group , ticker CAVA , reported weakerthanexpected revenue , and CoreWeave saw a larger loss than anticipated .
(04:35):
Now , let's zoom out to the macroeconomic landscape .
The U.S.
economy saw a significant rebound in the second quarter of 2025 , with real GDP expanding at an annual rate of 3.0% .
That's a big improvement from a 0.5% contraction in the first quarter .
This growth was largely driven by a sharp decrease in imports and a modest 1.4% increase in consumer spending .
(05:02):
But , and this is a big but , some analysts suggest this rebound might be an ' economic mirage , ' as that decline in imports artificially inflated the GDP figure .
Underlying domestic demand actually grew at its slowest pace in two and a half years .
Thirdquarter GDP growth is currently estimated at 2.5% .
(05:24):
Inflationary pressures remain a key concern .
The Consumer Price Index for July 2025 stayed steady at 2.7% yearoveryear .
However , core CPI , which strips out volatile food and energy , rose 3.1% in July , a faster pace than June .
And here's the kicker (05:44):
the Producer Price Index for July rose a significant 0.9% , far exceeding the 0.2% consensus estimate .
Core PPI also showed a notable increase .
These figures , especially the PPI , have reignited worries about the full impact of tariffs on consumer prices .
(06:06):
The U.S.
labor market is showing signs of cooling .
The unemployment rate ticked up slightly to 4.2% in July from 4.1% in June , right in line with expectations .
Job creation has slowed dramatically , with total nonfarm payroll employment gaining only 73,000 jobs in July , and both May and June figures were revised downwards .
(06:33):
The number of longterm unemployed , meaning 27 weeks or more , increased to 1.8 million in July , which is nearly a quarter of all unemployed people , the highest percentage since February 2022 .
Regarding interest rates and the Federal Reserve , the Fed has held the federal funds rate steady at a target range of 4.25% to 4.5% throughout 2025 so far , following three cuts in late 2024 .
(07:02):
Despite the recent hotterthanexpected inflation data , especially from the PPI , market sentiment still indicates a very high probability , between 89% and 97% , of a rate cut at the September 2025 Fed meeting .
However , there's some internal division within the Fed , and some economists , like those at Morgan Stanley , disagree with the market's expectation for a September cut .
(07:30):
U.S.
Treasury Secretary Scott Bessent has even explicitly called for a 50basis point rate cut in September and a series of cuts , citing that revised labor market data .
Finally , consumer sentiment improved in July to a fivemonth high of 61.7 , with current conditions rising , though expectations fell slightly .
(07:51):
While improving , overall sentiment remains broadly negative , though worries have softened since April .
Given these complex market dynamics , a balanced approach is key .
Diversification is always wise , especially with all these economic crosscurrents .
For broad market exposure , maintaining core positions in broadmarket ETFs is prudent .
(08:13):
Think of the SPDR S&P 500 ETF Trust , ticker SPY , iShares CORE S&P 500 ETF , ticker IVV , or Vanguard S&P 500 ETF , ticker VOO .
These track the S&P 500 and give you exposure to 500 large U.S.
companies .
(08:34):
For even wider exposure across large , mid , and smallcap stocks , the Vanguard Total Stock Market ETF , ticker VTI , gives you comprehensive coverage of the entire U.S.
stock market .
Now , for sectorspecific opportunities .
Industrials , given their strong yeartodate outperformance and underlying growth , look compelling .
(08:56):
Consider the Industrial Select Sector SPDR Fund , ticker XLI , for diversified exposure .
Within industrials , remember Republic Services , ticker RSG , for its strong pricing power .
Technology and Communications are still benefitting from the AI boom , but their high valuations warrant a cautious approach .
(09:18):
If you're comfortable with higher risk , the Invesco QQQ Trust , ticker QQQ , or the Technology Select Sector SPDR Fund , ticker XLK , could be considered .
Just keep an eye on that concentration risk from the ' Magnificent Seven ' stocks like Nvidia , Microsoft , and Meta .
(09:38):
They are driving a lot of the AI gains , but at a premium .
With growth stocks trading high , value stocks appear attractively valued .
Explore valuefocused ETFs that provide exposure to companies trading below their intrinsic value .
This strategy could offer a margin of safety .
Healthcare , specifically pharmaceuticals and biotech , has been overlooked due to those tariff uncertainties .
(10:04):
If these uncertainties dissipate , these sectors could present a longterm value opportunity .
The Health Care Select Sector SPDR Fund , ticker XLV , offers broad exposure if you want to capitalize on a potential rebound .
For fixed income , with that high probability of a Fed rate cut in September , bonds could offer increased stability and income potential .
(10:28):
For broad , diversified exposure to U.S.
investmentgrade bonds , consider iShares Core U.S.
Aggregate Bond ETF , ticker AGG , or Vanguard Total Bond Market ETF , ticker BND .
These are solid core bond holdings .
If you believe in sustained lower longterm interest rates beyond initial cuts , then the iShares 20 Year Treasury Bond ETF , ticker TLT , which focuses on longterm U.S.
(10:56):
Treasury bonds , could be considered , though it's more sensitive to rate changes .
Finally , don't forget alternative asset classes for diversification and as an inflation hedge , especially with persistent inflation and economic uncertainties .
SPDR Gold Shares , ticker GLD , provides exposure to gold bullion , which is a traditional hedge .
(11:19):
And the Vanguard Real Estate ETF , ticker VNQ , invests in REITs , offering exposure to commercial real estate and potential income .
Remember to keep an eye on a few key risks (11:30):
tariff escalation and its impact , a continued deterioration in the labor market , any deviation from market expectations by the Federal Reserve , and that concentration risk in equities where a few megacap tech stocks wield a lot of influence .
That's all for today's Spy Trader .
(11:51):
Stay safe out there , do your homework , and I'll catch you next time !
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