Week Ending 03_21_2025 Stock Market Recap

The market was busy responding to things said and left unsaid this week. What things? TUNE IN TO FIND OUT!

Episode Transcript

(00:34):
Hello and welcome
to this week's edition of the Big Money Report. I'm your
host, David Boothe, President and Financial Advisor at BIG Investment
Services. That's B-I-G, Boothe Investment Group.
We're a full-service financial advisory based out of Dover, Delaware, serving clients

(00:55):
all across this great country. And you can read all about us
at abigplan.com. That's www.abigplan.com. I
like to put this show together once a week just to give you a recap of the week
behind and a peek at the week and weeks to come. Trying
to keep you up to speed with you and your money. And we're glad you're with us today.
It is Friday, March 21st,

(01:18):
2025. Happy spring. Can you believe it is here already? How
about some shout outs? Shout out to Mark. Penny, Drew,
Carl. How about to Tim? Good seeing you at the legislative
luncheon that we sponsored here for Central Delaware with all the legislators and
business leaders. We always enjoy doing that. So good seeing you out there this
week. Hey, let's just go ahead and jump into the numbers, kind of tell you what is going

(01:40):
on. I tell you what, it was a knockdown drag out fight
between the Bulls and the Bears this week. I'm sure there were some injuries,
but the Bulls won. Dow Jones up 1.1% this week. S&P
500 up half a percent, NASDAQ composite up 0.16, and
the Russell small cap index up 0.6%. So all the

(02:01):
major indices finding a way to kind of claw the way to a gain
this week. The volatility index down 11.4. And I'll tell
you one thing about the VIX, the volatility index that I like to see,
happened today here during trading on Friday, market was down
and pretty ugly during trading. And you know, the VIX rolled
over and went down too. So we had the market down and

(02:23):
the volatility index down together. Sometimes that's
a bit of a sign of additional exhaustion in this market and
could indicate that we're in for a bigger bounce. So we'll see what happens there.
Looking at the long-term bonds as measured by the TLT, up half
a percent this week. So a little bit of action there. And when you look at the sectors,
Kind of sloppy, I will say that mainly the more defensive areas of

(02:45):
the market performed well. Energy was a big outperformer, up 3% on
the week. Nothing else came close. And I tell you, I'm super
happy with our energy exposure. We're way overweight
energy coming into this year and way underweight. technology
coming into this year. As a matter of fact, we've gotten rid of all
but one, anything related to the magnificent seven, right?

(03:07):
The big seven stocks have been driving this market higher for the last couple of
years. They're now calling them the mediocre seven or
the mediocre six, I should say, because one is still doing quite well. And
I'm happy to report that's one in our models, Meta, Facebook. That's
been doing great, we still have it. But when you take a look at tech stocks, I
mean, they're down 8% on the year, and energy's

(03:28):
up 8% on the year. So this underweight tech, overweight energy's been
working out pretty nicely. Of course, it's not gonna stay that way all year long, I doubt it.
But it's been providing a nice hedge when the market is
throwing these little temper tantrums. So I've been pleased to see that, pleased
that we've got that. And in addition to that, financials rebounded nicely
this week, up 1.9%. I was also happy to see that, because they

(03:48):
got clobbered Didn't really see where that even came from when
it happened. No one really had a good explanation for it, neither did I, but
they were up 1.9% this week and healthcare up 1.1%. That tends to
be defensive. Everything else kind of mixed, a little sloppy out
there. Gold was up 1.1%, silver down 2.2%. Gold
continues to look constructive. Now, all that said, I

(04:08):
saw something today that just makes you have an open mind to
gold, having a bit of a correction of its own. But I've also seen
some things this week that indicate on the technical side of things that gold
miners particularly could be poised to go a lot higher. Now, as
you know, if you're a client of ours, we don't have money in
the metal. When I like gold, I prefer to use a
gold mining company. One, they pay dividends. They're

(04:32):
share buybacks. So we've got some return of capital to
us, the investor, that gold doesn't do. And then on top of that, when
gold moves, the miners tend to move two to four times
the amount of the metal. Of course, gold is up 15% year-to-date.
Our gold miner, Ken Ross Gold, is up 31% year-to-date. So
you can see it right there in the numbers. That said, What

(04:53):
we have to keep in mind is that two to four times move also
works the other direction, right? So if gold decides to
roll over, those stocks will also take an outsized hit. So we watch
this stuff closely. We trim on the way up and want to manage the size of
the position there. So you might see some trimming on Ken Ross as
we move forward. So what moved markets this week? Well, I

(05:13):
think it was things that were said and not said. It was probably the biggest
driving forces this week. We had the Federal Reserve meeting and
Fed Chair Jerome Powell did have a press conference for this one. And
I would say that his overall tone was a little softer,
a little bit more dovish, right? So he said that they're
going to maintain patience in regards to the moves they

(05:35):
might make moving forward. And the moves he mentioned were
holding and cutting. He did not mention
raising the market like that. The other word he used, which
I was kind of surprised he brought it up again, because he's taking some heat
for this word. He used the word transitory. I
think he's right in using it this time. Last time he used the word transitory when

(05:56):
we printed $6 trillion for COVID stimulus, dumped it into the economy, and
then continued to support folks that were unemployment with $50,000 a
year salary when they were making 20s or $30,000 a year. forcing
McDonald's to raise their hourly wage to 20 bucks an hour just
to get people to come to work. Guess what? That is wicked inflation, compounded
inflation. That's not transitory when people go from making 10 bucks

(06:19):
an hour to 17, 18, 20. So he used
transitory last time and he was wrong, but he referenced it this week in
regards to tariffs. And you know what? He's right on point there. Tariffs
are a one-time increase. And you may not
even feel the full increase, right? The tariff is 25%. It's probably on
certain things that go into what you're getting. It's not like on the

(06:40):
complete good or service necessarily. And then on top of that, some
of these companies are going to want to eat a portion of that rather than pass it all
through to the consumer. But what is past due to consumer will
be a one-time shot. It's not going to be going
up and up and up month to month to month. Once it's out there, once it's put in
place, that's it, right? So it is transitory. If

(07:00):
we see a spike in inflation, we should remember that and keep that in mind. The
Fed's going to be keeping that in mind. That's a good thing. The market liked to hear that
because it means the Fed's not going to overreact to a little bit of a bump in
inflation if tariffs do cause such a thing. So
we'll see how all that goes. The other thing that the market reacted to was
President Trump Today, use the word flexibility

(07:21):
in regards to reciprocal tariff policies are coming
out on April 2nd. Now, I heard that, I saw
the wire come across the screen. Trump says there's flexibility in
reciprocal tariffs. I was like, whoa, man, right? This is great. I was watching
the market as I'm reading the headline. So what did I do? I had to go out and
find the transcript, right? I really want to see how he used the word. And

(07:43):
I have to say, I wasn't anywhere near as excited as
Mr. Stock Market. Yes, it was put out there, but I
was not overly exuberant over how
he used it. But I was glad to see it nonetheless. So was the market. So
we'll see how all that shakes out. I want to say something about the Trump administration that might
kind of catch you off guard here. Everyone's been talking about recession, recession,

(08:04):
recession, recession. Everyone's talking about that right now. A couple of things, we've
been talking about it too. I've mentioned that it doesn't look imminent.
The bond market suggests that it's not imminent. I will say
that stock market corrections, like the one that we're in right
now, this is one of the fastest 10% declines from
a all-time high ever in US history. That

(08:24):
does not tend to happen prior to a recession. That
tends to happen as a reaction, a knee-jerk reaction to
an outside stimulant. In this case, that stimulant being the
Trump administration and the policies and tariffs and things like that. So
it doesn't look like the beginnings of a recessionary-driven bear
market. But I'm anticipating recession. Okay.

(08:47):
I've been talking about the fact that I think recession odds are climbing. I
think that 2026 particularly to me looks
a little bit of a higher risk for potential recession, especially as
we start to feel the impacts of federal layoffs
and all these different types of things. I'm going to say something here, it
may be a bit controversial, but I've been listening to the messaging of the Trump

(09:08):
administration, Scott Besant, the secretary treasurer, Trump
himself, and the words you're using indicating that
there may be some pain, it could be a rough road ahead, etc. There's
two big objectives that this administration wants to accomplish. One
of them is bringing down inflation, and the other is
bringing down interest rates. But therein lies

(09:30):
a problem. These two things, interest rates and inflation,
are diametrically opposed to one another. When
inflation is high, you raise rates to bring it
down. It's like they're on opposite sides of a seesaw. When you
cut rates, inflation tends to go higher. The only
thing that brings them both down at the same time, a recession, right?

(09:52):
You get a recession, consumers ease up on the spending, prices
come down, the Fed gets worried about the economy, they start cutting
interest rates. So I'm not so sure the
Trump administration isn't actually okay
with maybe a mild recession. They're trying to reset some
of the craziness that we've had and the wonkiness in monetary policy

(10:13):
since COVID, because we've not had a proper reset. It's
been nuts, it's been all over the place. And
we kind of need to find our footing in some regards. And I'll tell you
something else, if they do get it, if they do get rates
to come down to a really good level, I
hope they do not make the same mistakes that they made

(10:34):
in the first term or that the Biden administration made by not
taking all of this debt we have and refinancing out to
a longer term. We could have locked in all this debt for 20 years
at 1%, one and a half. And did we do it? No, we
didn't. And now our debt service, our interest expense
alone is well over a trillion dollars a year because

(10:54):
neither Janet Yellen under Biden nor Steve Mnuchin
under Trump had the wherewithal to refinance and
locked our debt in long-term. Hey, I was telling every client that would
listen to go out and get a 2.75% mortgage for
30 years and never pay a single extra dollar on it in the rest of their life. Why
didn't we do that as a nation? I don't know, but we didn't. So I

(11:16):
think these are things that they're looking at. I think that recession is
not necessarily something that they're going to try to avoid, folks.
Doesn't mean it's imminent. I do think that it's probably more likely later on
down the road, the market looks like it wants to kind of work its
way higher. When you look at the technicals here, it's been holding some
areas and again, trying to push a bit higher. We're seeing some

(11:37):
areas of exhaustion and things like that. And as far as I'm
concerned, the market needs to go higher. I need 2% more
out of this market before the end of the month. April 2nd's coming, we
got all these tariffs that are gonna come out, that's gonna give certainty to this market.
I think the market's gonna like that, actually, because at least it
will know what it's dealing with. I remember Brexit, when UK

(11:58):
left the European Union, the market was in turmoil all
throughout the process, but when it finally happened, the market ripped higher. I
think we're seeing some of that now, April 2nd's gonna come, maybe the market will
respond positively once it has the certainty. But
if it doesn't cross a threshold that I need it to cross by the end
of this month, I'm not going to mess around. Like I said, that

(12:18):
coming into this year, I didn't really trust where things were. I
felt recession was kind of out there looming ahead of us. And
I'm not going to argue with this market. Okay.
I'm just not, I'm not going to die on any hill with the market. The market wants to go
higher. We'll play ball. If the market wants to go lower, we
will take our ball and we'll go home. We'll be watching all

(12:40):
this stuff pretty closely. Right now, we're gonna hold steady. I love where we're at. We've done
some buying here. The market's been down and out. All those things
have done quite well. We're up nicely on all of them. And right now, we're just
gonna hold steady and see how things shake out over the next week
and a day of trading. Other than that, a busy week
next week with news. We've got a lot of economic news coming out. The

(13:00):
PMIs, those are indications on the economy. We've got PCE,
that's the inflation number the Fed watches the most. We've got some sentiment numbers
and all kinds of things. Earnings-wise, companies have been kitchen-sinking it.
Why not? They've got a great excuse, right? They've got a wonderful excuse,
tariffs. So let's blame everything on tariffs and let's just set a really low bar
for the future. Makes it easy for them to cross it. I

(13:22):
understand it. I get it. But that's been shaking the markets up a little bit. Next
week, we'll start getting some earnings numbers from companies that are including some
data from this first quarter. And we might get a little bit better feel
for what earnings season is going to look like when it kicks into high gear on
the second week of April. So I know
it was a lot, but hey, there's a lot going on right now. So apologize.

(13:43):
I made you sit here and listen longer than you normally do. But look, between
now and next few minutes, you're thinking about your future, your long-term goals, all the things you want to
do with you and your money. Maybe just buy that second house, that RV, that
pool. Hey, pool time's coming. You know what your goals are.
Don't just think about them. Think big. Think B-I-G. And
Thank you for listening to this week's edition of the Big Money Report with

(14:07):
your host, David Boothe, President and Financial Advisor at
BIG Investment Services. For more information on BIG and
how you can access their planning and investment management services, visit
them at abigplan.com. That's abigplan.com. Or
call them toll free at 866-946-PLAN. That's 866-946-7526. The

(14:32):
foregoing content reflects the opinions of David Boothe and Boothe Investment Group,
Inc., and is subject to change at any time without notice. There's no guarantee
that the statements, opinions, or forecasts provided herein will prove to be
correct. Content provided herein is for informational purposes only and
should not be used or construed as investment advice or a recommendation regarding the
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