Week Ending 05_02_2025 Stock Market Recap

The market cleared one BIG hurdle this week but still has another to get over. What hurdle does it need to clear next? 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 Chief Investment Officer at
BIG Investment Services. That's BIG, Boothe
Investment Group. We're a full-service financial advisory based out
of Dover, Delaware, serving clients all across America.

(00:56):
And you can read all about us at abigplan.com. That's www.abigplan.com. I
put the 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, May 2nd, 2025. Some

(01:17):
shout outs to Ed, Rachel, Mike, Tim and Ray and
so many other folks and all the love we're getting on social media. Thank you
all so much for chiming in and showing us so much support. We appreciate you
all so much. So, what about Mr. Stock Market
this week? Well, Mr. Market had a pretty good week this week. As expected, we
thought things would push higher, and they did. Dow Jones up
3% on the week, S&P 500 up 2.9%, Nasdaq Composite up 3.4, and the Russell Small Cap Index up 3.2% on the week. So

(01:47):
all the major indices pushing higher, a lot of strength there in
the market this week. The volatility index, as you might expect, down a
bit, down 8.5%. Still at a 22.6, can kind of break
either way. We'll be watching to see what happens there. And long-term bonds,
as measured by the TLT, they dropped this week, down 1.3%. That
means rates went higher again. Rates continue to be sticky. Right

(02:08):
now, the market's looking past that. It doesn't seem to cure a whole lot. That's
something that's interesting, this 10-year bond just hanging in
there, hanging pretty tough. When we look at the sectors of the market, the
defensive areas were the weakest, as you might expect. Consumer
staples, they were only up 0.9, energy was down half
a percent, healthcare only up 0.3. Everything else was

(02:29):
like up between three and 4%. Well, outside utilities are
only up 2%. They tend to be defensive, but these days with
all the data centers and artificial intelligence, all the need for juice out
there for electricity, utilities have been kind of strong, but
still weaker than the rest of the market. So defensive, underperforming, everything
else doing really well this week. And then looking at the metals, gold, hey,

(02:49):
you heard it here first, gold down 2.2% this week. Well,
we talked about that last week. The charts didn't look good for gold. We
thought it had a blow off top. It was probably headed lower. So
we trimmed back our gold holding, Ken Ross Gold, gold
mining company we have in a lot of our larger models. We trimmed that back substantially
last week and gold really started to roll over this week. I think it has lower

(03:10):
to go. I think it will continue to press down a bit further. It'll probably
land somewhere between $3,000 and $2,800 an ounce. But I
like what we were sitting here with Ken Ross. It's still a great company. We've trimmed
back some profits, so we'll just hold what we have. So metals not doing so
good, silver was down to down 3% this week as well. So what's
moving markets this week? Well, tariffs, number one. Number one

(03:31):
is tariffs. I would say even more so than earnings, those
tariff announcements. Like earlier this week, we had some reports that there
are some deals that are really close to being announced with
some countries. So market responded positively to that. Then President
Trump rolled back. some automotive tariffs, market like
that a whole lot. And then the big one, which happened Thursday night

(03:52):
into Friday, China actually took a
step towards the negotiating table. Of course, they had a lot of caveats attached
to it and some really big caveats attached to it, but nonetheless,
they made a step towards the negotiating table and the market responded very
positively to that news. As a matter of fact, the half of this week's returns happened
today here on Friday. S&P was up one and a half percent just today.

(04:13):
So market really liked that quite a bit. In addition to
the tariff news, we've had earnings. Earnings have been better than
expected. And guidance, I think, has
been better than expected because, you know, you are getting some guidance. Some companies are
actually maintaining guidance. Now, others are doing two scenario
type things and others are pulling it all together. The market kind of expected that to
happen, but I think the market is getting a lot more data from these companies than

(04:36):
it expected. Earnings have been pretty good. What
I would caution all of us, though, on that is this. There's
been a lot of front running the tariffs. Look,
we had a huge trade imbalance. We actually said, what, a month and
a half ago that we were probably going to have a negative GDP quarter. because
of the trade imbalance. But guess what? This past week, it was announced GDP was

(04:58):
negative last quarter. We thought that was going to happen specifically
because of trade imbalances because of all the front running of
tariffs. So a lot of this is reflecting, I think, in the
numbers of these companies. And the question is, what
type of impact is that going to have on the next quarter or the one thereafter if
everybody is so overstocked ahead of the tariffs? Well, we'll have to see how that shakes

(05:18):
out. Now, one of the bright spots, I'll say, about earnings is that The
earnings revisions, they're still dropping, okay, but
now that we've had a lot of other companies report, they're not
dropping by as much as they have dropped the last couple of
quarters. The rate of change is diminishing. We've
talked about that in the past. That is something the market tends to respond to,

(05:41):
so that could be a good sign. We'll be watching that as we move forward.
We also had a lot of economic data. I think I mentioned the PCE was
cooler, that inflation number, the market liked that. The March pending
home sales, that was the strongest number since 2023. So
everyone's out wanting to buy houses all of a sudden, market liked to hear that.
We had the jobs number for April was super strong. I

(06:02):
say super strong, much stronger than anticipated, much stronger than expected
by quite a bit. Some of those jobs are interesting though. Some of those jobs
related to imports, warehouses, things like that. Makes
you kind of scratch your head and wonder if some of this front running didn't add to some of
those jobs as well. On the negative side, I'd mentioned the negative GDP number
came as no surprise to us. We said that was probably going to happen. But then

(06:23):
on top of that, the continuing jobless claims and
the initial jobless claims, they were not so hot. They
were weaker than expected and that's not a good thing. They tend to
lead the bigger jobs number and folks are
really trying to stay ahead of the curve. They tend to watch that one. They tend to watch these
initial and continuing jobless claims more than anything else. and

(06:43):
they weren't so hot this week. So those are things to be mindful of
as we move forward. Everything else, I mean, it kind of boils down
to levels and technicals, honestly. We're having a lot more earnings still
coming out next week. We've got the Federal Reserve's going to have their monthly meeting next
week. My guess is they're going to hold steady. I don't think they're going to raise
or cut. That said, they may alter some language.

(07:04):
We'll have to see what happens there. I mean, given some of the data, I'm not sure they will.
they're probably gonna project that they're gonna stay put for a while. We'll
have to see how that comes together next week. The market's gonna be listening very closely
to that, and the market's gonna be watching all these additional earnings coming
out as well. So what should we expect moving forward? Is it all
over? I think not. I think not. I don't think it's

(07:24):
all over. Look, I mentioned to you over the last couple of
weeks that the market needed to clear that 50-day moving average.
It's right around 5,600 and change. It did that this week. That
was the first hurdle. But the second one that I'm watching that
is more important is just above the 200-day moving average, right?
57.83 on the S&P 500. I think that's the level that I'm really keying in

(07:46):
on there. I think the market probably wants to make a run towards that. It's a
couple percent away, so you've got about another 2% higher from here. And
I do think the market wants to make a run towards that level. Looking
at the technical indicators, the DeMarc, right,
we talk about Tom DeMarc's work, the nines and the 13 countdowns.
We're closing in on a nine on the upside, saying that

(08:08):
this big move in the market is getting close to exhaustion. And
look, the S&P Oscillator, another thing that we watch pretty closely, when
it gets over five, watch out, the market could be getting exhausted and
the move could come to an end. And right now it's six point something, almost seven
on the S&P Oscillator. So there are some things that tell me that
in a super short term, the next week or two,

(08:29):
the market's probably gonna try to push up to that 57.80 or
so. But I think the odds are very, very high it
fails there. I think a lot of damage was done with that decline we had
a few weeks ago. I say a few weeks ago, it started in January, it
climaxed a few weeks ago. I think a lot of damage has been done and
traditionally the market tries to retest a

(08:50):
low before we get the all clear. It does it so often,
it's so common that it should just be expected and
you should err to the side of the equation that says the
market is going to go back down, it is going to do some sort of retest. air
to that side versus the side where the odds are so very
low and minimal that we're just going to keep on going higher and never look back

(09:10):
again. I just think the odds are really against that at the moment. So I
think we're probably going to get a little higher here, probably then roll over, head
lower, and we're going to be looking to buy that very aggressively. We really
are. When you just take all of the information out there and you put it
all together, I think the odds, the probabilities are
much stronger for this market to go higher and by quite a

(09:31):
bit, looking out 12 to 18 months from right now. Okay. I
think the odds are very, very high. The probabilities are very, very high.
Just given the data, we've had sentiment numbers that were just completely blown
out of the water. You only see them at bottoms of markets. We had
breadth indicators that we've only seen at bottoms of markets.
And then when you look at the 200 week moving average, we've talked about that. You know,

(09:53):
we got pretty close to it. We didn't break it. Even if we have
a recession, which I still think is a high possibility that
we do slip into a recession. Look, we just got one negative quarter of
GDP. If you get another one with some weaker jobs, the
Bureau of Economic Research might actually call it a recession. We'll have to
see what happens. But even if we get it, I think the downside to

(10:13):
this market is limited. I really do, because a lot
of this stuff is man-made, and I think it's going to settle out, and the market's going
to start soon looking at 2026 earnings, not 2025. When
it starts looking at 2026 earnings, they're going to start pricing that
in, and I think it's going to get a lot more constructive longer term. If
we get this rollover, if the market fails and starts to head lower,

(10:34):
we are going to be looking to buy that very aggressively and
get situated for the next 12 to 24 to 36 months.
You're moving much further ahead from the here and now, because I think the market is
going to go quite a bit higher over the longer term. So maybe a little higher in the short, a
little higher in the long, a little sloppy in the middle. and we'll look to jump
in there and buy that if that happens. What if it doesn't happen, David? What

(10:56):
if you just missed out on this big move in the market? Well, first of all, we didn't miss out. We
bought a whole bunch of stuff the week that the market hit its lows.
Monday, Tuesday, and Wednesday morning of that week, we bought a whole bunch of
stuff. We are still sitting on some cash, but here's the thing. There's an
investment I could buy right now. I love it. It's not correlated to
the market. It's at a great price point. You have no problem moving
into that. There's all types of other things. I've got my eyes on

(11:19):
individual companies that look really attractive. So there's always something
to do. No worries about that at all. So if we cross that hurdle
and we hold it, then that does look like an all clear and
we will adjust accordingly. What we try to do, folks, is not insist
that we're right all the time, because that is a loser's game. When
you sit there and you dig in and you insist that your opinion is going to
come to fruition, you'll lose money. You just lose money. That's

(11:42):
not the game we play here, right? We're not doing that. I don't want to be right. I
want to make you money. Okay, seriously, I wanna make
you money. So we're gonna stick to a thesis until
the data tells us otherwise, and then we'll switch gears, and we'll switch
gears quickly. But I think we do a pretty good job of staying ahead where
this market usually likes to go. And so far year to date is

(12:03):
reflecting in your numbers. Hopefully you've been enjoying that.
So I'm gonna go and wrap up, all right? But between now and next you meet, as you're thinking about your
future, your long-term goals, all the things you want to do with
you and your money. get that nice retirement, get
it in a little earlier than expected. Hey, maybe you want to be that
rich aunt or uncle that just leaves a legacy to all these nephews and

(12:25):
nieces that were like, oh, aunt who? Oh,
wow. How awesome is that? Maybe it's charity that you're focused
on. Look, you know what your goals are. Don't just think about it. Think big. Think
Thank you for listening to this week's edition of the Big Money Report with
your host, David Boothe, President and Financial Advisor at

(12:47):
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

(13:09):
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
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