September 9, 2025 • 9 mins
Fresh news and strategies for traders. SPY Trader episode #1361.
This episode covers the early September market trends, highlighting a mixed but upward movement driven by Federal Reserve interest rate cut hopes despite a weakening labor market and persistent inflation. The S&P 500 and Nasdaq showed gains, with the Nasdaq leading yeartodate. Technology and Communication Services are strong, while Healthcare and Real Estate offer value. Smallcap and value stocks are outperforming. Key company news includes Robinhood and AppLovin joining the S&P 500, Broadcom's AI surge, and Uber's autonomous vehicle plans. The macroeconomic outlook points to a likely 25basispoint Fed rate cut due to weak jobs data, but inflation remains a concern. Trading recommendations include increasing exposure to value and smallcap stocks (IWM), strategic sector investments in Healthcare (XLV), Real Estate (VNQ), and diversified Tech (XLK), utilizing fixed income for stability (BND, AGG), and considering gold (GLD) for diversification against inflation.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hey there , savvy investors and welcome to Spy Trader , your goto podcast for navigating the markets !
I'm your host , Bucks Bunny , and it's 6 am on Tuesday , September 9th , 2025 , Pacific time .
We've got a lot to unpack this morning , as the market is buzzing with activity and anticipation .
(00:21):
Let's jump right into our market rundown .
The US stock market is showing a mixed but generally upward trend in early September , mostly driven by hopes of Federal Reserve interest rate cuts .
This is happening even as we see signs of a weakening labor market and those stubborn inflation concerns lingering in the background .
(00:44):
As of September 8th , the S&P 500 saw a modest gain of 0.2% , the Nasdaq Composite hit a new record high , climbing 0.5% , and the Dow Jones Industrial Average finished 0.3% higher .
Looking at last week , the S&P 500 was up 0.3% , the Nasdaq gained a solid 1.1% , while the Dow dipped slightly by 0.3% .
(01:13):
Yeartodate , the Nasdaq is leading the pack , up 12.4% , with the S&P 500 not far behind at 10.2% , and the Dow adding 6.7%.However , it's not all smooth sailing .
September has a bit of a notorious reputation for equities , historically averaging a negative return for the S&P 500 , and volatility , as measured by the VIX , tends to tick up .
(01:40):
So , how are the sectors shaking out ?
Technology , represented by the Technology Select Sector SPDR Fund or XLK , is showing real strength .
The Nasdaq's rise is largely thanks to tech giants like Alphabet , which jumped 10.4% , and Apple , up 3.2% on September 8th after a favorable antitrust ruling .
(02:03):
Broadcom also surged on strong AI revenue .
Communication Services , via XLC , also advanced .
Healthcare , XLV , made a significant rebound in August , climbing 5.4% , and is now looking like a value play .
Smallcap and value stocks have also been outperforming , with the Russell 2000 smallcap index surging 7.1% in August , and the Morningstar US Value Index rising 5.05% .
(02:34):
Smallcaps remain particularly attractive , trading at a 15% discount to fair value .
Real Estate , through the Vanguard Real Estate ETF or VNQ , is another sector identified as offering good value .
On the flip side , Energy , Financials , and Industrials have lagged , with Energy tumbling 2.2% on September 4th .
(02:59):
Utilities are currently considered overvalued .
In companyspecific news , trading platform Robinhood Markets , ticker HOOD , and mobile app monetization company AppLovin , ticker APP , are set to join the S&P 500 on September 22nd .
This news sent their shares soaring on September 8th .
(03:20):
Broadcom , AVGO , surged after reporting betterthanexpected earnings , fueled by booming demand for its AI offerings , including a rumored 10 billion client order from OpenAI .
TakeTwo Interactive Software , TTWO , also hit an alltime high after launching its latest professional basketball game .
(03:42):
Uber Technologies , UBER , saw its shares rise on plans to test autonomous vehicles in Germany in 2026 and to sell 2.25 billion in investmentgrade bonds .
On the mixed or negative side , CVS Health , CVS , shares dropped after executives declined to give updated guidance at an investor conference .
(04:06):
Designer Brands Inc.
, DBI , reported a 4.2% decrease in Q2 sales and held off on fullyear guidance due to uncertainty .
But there's more good news (04:15):
Hewlett Packard Enterprise , HPE , delivered record Q3 revenue , up 19% , thanks to strong demand and its acquisition of Juniper Networks .
Casey's General Stores , CASY , reported strong Q4 earnings and plans to add 500 stores by fiscal year 2026 .
(04:37):
Campbell's , CPB , also beat expectations slightly .
Finally , M&A activity is picking up , with nearly 300 billion announced in August .
Now , for our analysis and insights .
The macroeconomic picture is a bit of a mixed bag .
The Federal Reserve has held rates steady , but there's a strong market expectation for a 25basispoint rate cut at the upcoming FOMC meeting on September 1617 .
(05:05):
This is largely due to recent weak employment data .
The August jobs report , released September 5th , showed a significant slowdown , with only 22,000 new jobs added , far below expectations , and unemployment ticking up to 4.3% .
Even June's job numbers were revised down to a loss .
(05:26):
This cooling labor market is a key factor pushing the Fed towards a more dovish stance , and the market sees weak jobs data as good news for rate cuts .
The 10year Treasury yield also fell to 4.04% on September 8th , reflecting these expectations .
However , inflation remains a nagging concern , hovering stubbornly close to 3% , with consumer inflation expectations actually increasing to 4.8% in August .
(05:56):
Consumer confidence has also weakened , dipping into pessimistic territory , and tariff concerns continue to weigh on investor sentiment and contribute to price increases .
US GDP grew a healthy 3.3% in Q2 , but overall annual growth for 2025 is expected to slow .
(06:18):
The big takeaway here is that the market is banking on Fed rate cuts to sustain this rally .
But if inflation remains sticky or if the economic slowdown turns into something more severe , that sentiment could quickly reverse .
Consumer concerns about rising prices , especially food , are clearly impacting discretionary spending plans , highlighting these underlying fragilities .
(06:43):
Given these complex conditions , with a generally positive but cautious equity market , anticipated Fed rate cuts , a cooling labor market , and persistent inflation , a balanced approach is key .
Here are my trading recommendations (06:57):
First , for broad market exposure with a tilt towards value and smallcaps
Smallcap and value stocks have been outperforming and are currently trading at attractive discounts .
(07:19):
A Fed ratecutting cycle typically benefits these more ratesensitive , domesticallygeared parts of the market .
For broad largecap exposure , consider the Vanguard S&P 500 ETF , VOO , or the iShares CORE S&P 500 ETF , IVV .
For smallcap exposure , the iShares Russell 2000 ETF , IWM , is a solid choice .
Second , strategic sector exposure (07:45):
Overweight sectors that are offering value or showing strength aligned with our macroeconomic outlook .
Healthcare , represented by the Health Care Select Sector SPDR Fund , XLV , gained 5.4% in August and is considered to offer value .
It can also act as a defensive play .
(08:08):
The Vanguard Real Estate ETF , VNQ , is another great option as real estate is identified as undervalued , and lower interest rates could boost the sector .
Technology , via the Technology Select Sector SPDR Fund , XLK , continues to show strong innovation , especially with AI , as we saw with Broadcom , AVGO .
(08:33):
While some megacap tech might be overvalued , XLK provides diversified tech exposure , but keep an eye on those valuations .
Third , fixed income for stability and income (08:41):
Given the anticipation of Fed rate cuts , certain fixedincome instruments are becoming more attractive .
Falling shortterm yields benefited bonds in August .
The Vanguard Total Bond Market ETF , BND , or the iShares Core U.S.
Aggregate Bond ETF , AGG , offer broad exposure to investmentgrade US bonds , providing stability and income , which could benefit from those anticipated rate cuts .
Fourth , consider alternative assets for diversification (09:12):
With lingering inflation concerns and overall market uncertainty , assets like gold can offer diversification .
Gold historically shows bullish seasonal tendencies in September and can act as a hedge against inflation and economic uncertainty .
(09:33):
The SPDR Gold Shares , GLD , provides easy exposure to gold bullion .
To sum it all up , the market's immediate reaction to weak jobs data as
Hey there , savvy investors and welcome to Spy Trader , your goto podcast for navigating the markets !
I'm your host , Bucks Bunny , and it's 6 am on Tuesday , September 9th , 2025 , Pacific time .
We've got a lot to unpack this morning , as the market is buzzing with activity and anticipation .
(00:21):
Let's jump right into our market rundown .
The US stock market is showing a mixed but generally upward trend in early September , mostly driven by hopes of Federal Reserve interest rate cuts .
This is happening even as we see signs of a weakening labor market and those stubborn inflation concerns lingering in the background .
(00:44):
As of September 8th , the S&P 500 saw a modest gain of 0.2% , the Nasdaq Composite hit a new record high , climbing 0.5% , and the Dow Jones Industrial Average finished 0.3% higher .
Looking at last week , the S&P 500 was up 0.3% , the Nasdaq gained a solid 1.1% , while the Dow dipped slightly by 0.3% .
(01:13):
Yeartodate , the Nasdaq is leading the pack , up 12.4% , with the S&P 500 not far behind at 10.2% , and the Dow adding 6.7%.However , it's not all smooth sailing .
September has a bit of a notorious reputation for equities , historically averaging a negative return for the S&P 500 , and volatility , as measured by the VIX , tends to tick up .
(01:40):
So , how are the sectors shaking out ?
Technology , represented by the Technology Select Sector SPDR Fund or XLK , is showing real strength .
The Nasdaq's rise is largely thanks to tech giants like Alphabet , which jumped 10.4% , and Apple , up 3.2% on September 8th after a favorable antitrust ruling .
(02:03):
Broadcom also surged on strong AI revenue .
Communication Services , via XLC , also advanced .
Healthcare , XLV , made a significant rebound in August , climbing 5.4% , and is now looking like a value play .
Smallcap and value stocks have also been outperforming , with the Russell 2000 smallcap index surging 7.1% in August , and the Morningstar US Value Index rising 5.05% .
(02:34):
Smallcaps remain particularly attractive , trading at a 15% discount to fair value .
Real Estate , through the Vanguard Real Estate ETF or VNQ , is another sector identified as offering good value .
On the flip side , Energy , Financials , and Industrials have lagged , with Energy tumbling 2.2% on September 4th .
(02:59):
Utilities are currently considered overvalued .
In companyspecific news , trading platform Robinhood Markets , ticker HOOD , and mobile app monetization company AppLovin , ticker APP , are set to join the S&P 500 on September 22nd .
This news sent their shares soaring on September 8th .
(03:20):
Broadcom , AVGO , surged after reporting betterthanexpected earnings , fueled by booming demand for its AI offerings , including a rumored 10 billion client order from OpenAI .
TakeTwo Interactive Software , TTWO , also hit an alltime high after launching its latest professional basketball game .
(03:42):
Uber Technologies , UBER , saw its shares rise on plans to test autonomous vehicles in Germany in 2026 and to sell 2.25 billion in investmentgrade bonds .
On the mixed or negative side , CVS Health , CVS , shares dropped after executives declined to give updated guidance at an investor conference .
(04:06):
Designer Brands Inc.
, DBI , reported a 4.2% decrease in Q2 sales and held off on fullyear guidance due to uncertainty .
But there's more good news (04:15):
Hewlett Packard Enterprise , HPE , delivered record Q3 revenue , up 19% , thanks to strong demand and its acquisition of Juniper Networks .
Casey's General Stores , CASY , reported strong Q4 earnings and plans to add 500 stores by fiscal year 2026 .
(04:37):
Campbell's , CPB , also beat expectations slightly .
Finally , M&A activity is picking up , with nearly 300 billion announced in August .
Now , for our analysis and insights .
The macroeconomic picture is a bit of a mixed bag .
The Federal Reserve has held rates steady , but there's a strong market expectation for a 25basispoint rate cut at the upcoming FOMC meeting on September 1617 .
(05:05):
This is largely due to recent weak employment data .
The August jobs report , released September 5th , showed a significant slowdown , with only 22,000 new jobs added , far below expectations , and unemployment ticking up to 4.3% .
Even June's job numbers were revised down to a loss .
(05:26):
This cooling labor market is a key factor pushing the Fed towards a more dovish stance , and the market sees weak jobs data as good news for rate cuts .
The 10year Treasury yield also fell to 4.04% on September 8th , reflecting these expectations .
However , inflation remains a nagging concern , hovering stubbornly close to 3% , with consumer inflation expectations actually increasing to 4.8% in August .
(05:56):
Consumer confidence has also weakened , dipping into pessimistic territory , and tariff concerns continue to weigh on investor sentiment and contribute to price increases .
US GDP grew a healthy 3.3% in Q2 , but overall annual growth for 2025 is expected to slow .
(06:18):
The big takeaway here is that the market is banking on Fed rate cuts to sustain this rally .
But if inflation remains sticky or if the economic slowdown turns into something more severe , that sentiment could quickly reverse .
Consumer concerns about rising prices , especially food , are clearly impacting discretionary spending plans , highlighting these underlying fragilities .
(06:43):
Given these complex conditions , with a generally positive but cautious equity market , anticipated Fed rate cuts , a cooling labor market , and persistent inflation , a balanced approach is key .
Here are my trading recommendations (06:57):
First , for broad market exposure with a tilt towards value and smallcaps
Smallcap and value stocks have been outperforming and are currently trading at attractive discounts .
(07:19):
A Fed ratecutting cycle typically benefits these more ratesensitive , domesticallygeared parts of the market .
For broad largecap exposure , consider the Vanguard S&P 500 ETF , VOO , or the iShares CORE S&P 500 ETF , IVV .
For smallcap exposure , the iShares Russell 2000 ETF , IWM , is a solid choice .
Second , strategic sector exposure (07:45):
Overweight sectors that are offering value or showing strength aligned with our macroeconomic outlook .
Healthcare , represented by the Health Care Select Sector SPDR Fund , XLV , gained 5.4% in August and is considered to offer value .
It can also act as a defensive play .
(08:08):
The Vanguard Real Estate ETF , VNQ , is another great option as real estate is identified as undervalued , and lower interest rates could boost the sector .
Technology , via the Technology Select Sector SPDR Fund , XLK , continues to show strong innovation , especially with AI , as we saw with Broadcom , AVGO .
(08:33):
While some megacap tech might be overvalued , XLK provides diversified tech exposure , but keep an eye on those valuations .
Third , fixed income for stability and income (08:41):
Given the anticipation of Fed rate cuts , certain fixedincome instruments are becoming more attractive .
Falling shortterm yields benefited bonds in August .
The Vanguard Total Bond Market ETF , BND , or the iShares Core U.S.
Aggregate Bond ETF , AGG , offer broad exposure to investmentgrade US bonds , providing stability and income , which could benefit from those anticipated rate cuts .
Fourth , consider alternative assets for diversification (09:12):
With lingering inflation concerns and overall market uncertainty , assets like gold can offer diversification .
Gold historically shows bullish seasonal tendencies in September and can act as a hedge against inflation and economic uncertainty .
(09:33):
The SPDR Gold Shares , GLD , provides easy exposure to gold bullion .
To sum it all up , the market's immediate reaction to weak jobs data as
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