Week Ending 05_09_2025 Stock Market Recap

Markets were mixed this week. We’re sharpening our pencils for what we believe will be an upcoming opportunity. How so? 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. And

(00:55):
you can read all about us at abigplan.com. That's www.abigplan.com. I
like to 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 9th, 2025. I'll put

(01:16):
out some shout outs there to David, who listens at two times the speed.
Can you believe that guy? Mike and his wife, George Tandon, tuning
in from the West Coast there. And how about all the folks that stopped by
to say hello at our booth there at Old Dover Day celebration last
weekend? The team had a great time catching up with everybody. So thanks for coming by and saying
hello. Let's go and jump into the numbers and tell you what's going on

(01:37):
there. Markets drift a little bit lower this week. Dow Jones down 0.16%, S&P
500 down half a percent, NASDAQ composite down 0.2. Russell
small cap index holding there a little bit better, up 0.1%. The
volatility index, we like to watch that, down 3.4% this week. It's
right around 21.9, so a little bit on the
lower side at the moment. Kind of indicates maybe a little bit of a calmer market, at

(02:00):
least for now. Looking at long-term bonds, they just can't get
traction. The TLT down 0.7% this week.
So rates continue to drift a little bit higher. Now that
said, the bond volatility has seemingly calmed
down. I mean, look for a while there, we saw volatility in
the bond market that looks more like what you would

(02:21):
expect out of tech startups. Tech startups
or cryptocurrencies or something like that. It was so crazy. That
has settled down. So happy to see that, but they're still not getting much traction.
And we take a look at the sectors this week, there's really not a whole lot to talk about. It was
really a mixed bag across the board with nothing really standing
out except semiconductors. They were up 1.9% this

(02:43):
week. You can thank AMD for that. They had a pretty strong earning
support. We do have that in our models. We've traded that stock quite
a bit here over the last three years between $67 a share up
to over 200 last time we sold it, which was a year ago in
March. And then we've been buying it back again here in the low 90s. So
they had a really strong report and that was good to see. Lisa Su, really

(03:05):
sharp CEO. And I like that company quite a bit. Other
than that, though, nothing really stand out. Like I said, a mixed bag. The market really
didn't say anything this week in regards to sector
performance. You know, sometimes it's maybe saying a little something. Not this
week. It was just kind of mixed. One thing that did catch me off guard this week was
gold. You know, look, I think gold was topping out there, kind of
like a blow off top scenario I thought would drift lower, and it did. But

(03:28):
at this moment, it didn't last very long. Gold was up 2.9% this
week. So it did bounce back. I still think it looks pretty pricey.
And looking at the technicals, I do think it could drift lower at some point. But I
also think the market looks pricey. We've been talking about that. We've had this really
strong run off the bottoms, off the low there, second
week of April. Market's up about 16% from that point.

(03:49):
And I mentioned last week that it looked like the market wanted
to probably make a run. close to that 200-day moving average, maybe
a little bit above that, 5,783 is the number that I'm really watching.
The market did get over 5,700 earlier this week, but then it
rolled back over and just kind of hanging in at the moment.
Look, I still think that it kind of wants to go higher, but

(04:11):
we've had some headlines, some markets didn't respond a whole lot too. Like for
example, just talk about this week, right? So beginning of the week, we
find out that China and the United States are not talking. There has not been
any negotiation whatsoever. There's been no communication whatsoever. Market
didn't like to hear that. Market was under the impression maybe something was happening
behind the scenes and it went down pretty significantly. And

(04:32):
then we got Fed Chair Jay Powell and company, they had their meeting
this week. We didn't expect they were going to say or do anything different.
We didn't think they're going to cut rates, didn't think they're going to raise rates, didn't think they
were going to do much of anything and they didn't. They also didn't really give any
indication of any change in course right now. The
market digested it. It went up a little bit, but I wouldn't say any big

(04:52):
reaction there. The one thing I didn't like about the Fed's commentary, they
really talked about stagflation without mentioning the word stagflation. So
what is stagflation? That is higher inflation with low
growth or no growth, right? No growth. with inflation. Kind
of an ugly spot to be in, right? Because the economy's not growing, people's
paychecks aren't growing, yet prices continue to go up. And

(05:14):
that's just not a good scenario. Last time we really had stagflation was
back in the 70s and it was pretty messy. Now that said,
I think that a lot of what's going on right now can be related to tariffs as
far as price increases. So hopefully that will settle down
and that can right itself. But the Fed did kind of make some commentary that sounded
like stagflation. I think they're going to be late to the party when it comes

(05:35):
to cutting rates. They're really focused on things that are
lagging indicators. The labor market is a lagging indicator
and it's the last thing to break. The last jobs number was better than
expected, but as I pointed out on last week's podcast, A
lot of those jobs were related to imports, warehousing,
dock workers, things like that. And we've had a

(05:57):
great quarter really with S&P earnings. They've been much better
than expected. But look, when you take a look at the numbers and
you do a deeper dive, there's been a tremendous amount of front running.
So many companies really pulled forward a
lot of their product, trying to buy all
the stuff that they could buy prior to the tariffs kicking in. So

(06:20):
a lot of that's been going on. We'll talk a little bit more about that in a moment. Right now, get off
track. We were talking about the news that's pushing the market with how the
market's reacting. Thursday, it was reported that the
U.S. and China are going to meet this coming weekend. And
then on Friday here, the president mentioned rolling
back tariffs from 145% on China down to

(06:41):
80% ahead of this upcoming meeting. You would think the market would
have responded really positively to that, it would have really taken off,
but it didn't, just kind of flat on the day. We also had one
report of one trade deal done between the United States and the
UK. really shouldn't come as a big surprise, and the market kind of yawned
over that one. So we're kind of at this place where the market's just

(07:02):
not reacting a whole heck of a lot. And I said, you know, I've been saying the
last week and a half, two weeks, the market's looking extended. It looks like
this move is about exhausted. I still wouldn't
be surprised if it tried to make a run up to that 57.50, 57.80 level on the S&P. I
really would not be shocked at all if it did push a little bit higher
from here, but I think the odds are extremely high

(07:26):
the market's going to roll over here at some point and probably work
its way back down. I think we're in a trading range and we're
near the top of that range. So what did we do this
week? Well, we did, look, anybody that needs money, right? Anyone that
needs money in the near future, we raise that cash. We
want to get that cash, that money out of the market, have it in cash. So we're
not selling at a lower level. Now we've trimmed a few things here and there.

(07:49):
We just kind of got things positioned for the next leg lower.
Because we want to do some buying if, and when that happens, look, I think it
can happen. There's a few things. There's a lot of conflicting stuff out there. There's
a lot of positives, right? I was reading some work from Nick Rake
at Earnings Scout. I've talked about him before. He's really onto something strong
here. He, he tracks the Delta, the rate of

(08:09):
change on earnings expectations. And
a couple of months ago, a quarter ago, whatever, the gap between
earnings expectations and price of the market was just
huge. And whenever you see these gaps appear, they have
100% track record for calling for a downturn in the market. And
once again, it was correct. But on the other hand, when you see that

(08:32):
delta improving, the markets tend to do quite well moving forward
and the delta is improving. The rate of change on earnings expectations is
improving. They're still going down, but they're not going down by
anywhere near as much as they were. And
I think that's a positive for the market. There's a ton of sentiment indicators and
breadth indicators that we've talked about that are positive for

(08:54):
the market, especially to look out 12 to 18 months. So longer
term, I think things are really looking very constructive, but
in the medium term, the short to medium term, I
still think we can get some sloppiness. I've been tracking ships. cargo
ships. Watching all this tariff news, I think, you
know, this is a good place to kind of have eyes to kind of see what

(09:15):
to expect. And what's interesting is Chinese shipments
of goods to the United States dropped 21% in
April. 21% decline in
April. And remember, the tariffs didn't even kick in
until like a couple of weeks into April. So those numbers are probably
getting even worse. A lot of folks are talking about

(09:36):
the damage this is going to cause the U.S. economy, empty store shelves,
things like that. They listen to some CEOs from companies like Mattel, et
cetera, talking about there's not going to be Halloween costumes for Halloween.
There's not going to be toys for Christmas. But here's another interesting
thing that I'm watching. All those shipments from China are down 21%. Shipments
to Southeast Asia, places like Indonesia, Vietnam, Malaysia,

(09:59):
they are up 21%, up 21%. Exports to Latin America, up 17%. Shipments to Africa, up
25%. And European Union, up 8.3. So
you have these huge increases in other areas. And
you know, it gets me thinking, it gets me scratching my head. Look, I think when all

(10:20):
is said and done, businesses, they're going to do whatever
they can to try to get around over or through
this gigantic brick wall that's been put in front of them
in regards to the 145% Chinese tariffs. And my
guess is a lot of these shipments we're seeing increasing to
these other areas around the world, they're going to find their way to the United States.

(10:42):
So we may not get that big supply chain shock that
everyone is expecting. I mean, I think there'll be some pain there, don't get me wrong, but
I'm not really sure we're going to see the full blown shock, like
a COVID type shock that everyone's anticipating because the
product's still moving, folks. It's still moving. It's just
not coming here directly. I'm trying to get some data to

(11:04):
see what our shipments look like from Southeast Asia,
from Latin America, from Africa. Let's see what that
looks like because maybe some of this stuff is circumventing these
tariffs. We'll see. But look, either way, I think as we get into this next
quarter and we got time, look, we're not out of the first quarter earnings yet. We're
still getting some earnings coming in the door here. When we start getting

(11:24):
to the next quarter earnings, I think there could be some ugliness around those numbers.
Market will likely react to that. As I've been telling clients, keep this in mind.
Markets are forward-looking. Even if the greatest amount
of pain from this doesn't come till later in the year, till
the fall, let's say, even if we slip into a mild recession later
into the year, the market will have reacted to

(11:47):
that, and it will be on the upswing when the news is
at its worst. When the news is at its worst, when the
numbers are the worst, the market will be heading up. So what's
all this mean for you? It simply means this. We're
in a great position to buy. I mean,
fantastic. We did a lot of buying there right at the

(12:07):
bottom of the market that second week of April, right after the tariffs
were announced, we bought a handful of names. They're up 30, 40%. just
in a month's time. And I did small positions. They were just
starter positions. So we still have a healthy amount
of cash on hand. And the game plan is
we're sharpening our pencil. We are just keeping an eye on the market,

(12:29):
keep an eye on individual names, and we are going to buy this next
downturn if and when it happens. And I believe it's more likely
if not when. When we do get this next downturn, we're going to buy it aggressively.
Now, we may not go way down. We might just be in a trading range between, say,
5,200 and 5,700 on the S&P right now, and that's
a still 10% swing. So market works its way back down. We get down

(12:51):
around that 5,200 or so, and then watching the technicals and
things like that, seeing what they say at that point in time, we're gonna
be taking advantage of that and putting this money to work, as I think that
the downside is relatively limited. I've mentioned this over
and over and over again. If things really fall apart, really
just completely collapse, I'm expecting 4,600 on the S&P.

(13:12):
All right, now that's quite a trip down from where we're at right now.
That's 1,000 points, that's 20% down from where we sit today on
the market. That's the market, not necessarily our portfolios. We've got cash,
we've got bonds, we've got all kinds of things. We've got foreign investments that are
doing great. So it doesn't mean that we're gonna feel that type of pain, but
the market might. And I don't think we need to wait for that

(13:33):
ultimate level to come into play if the technicals
aren't pointing that direction because there's a lot of things that
suggest we should keep an open mind to better and
stronger outcomes looking out a year from now. So
we're keeping that in mind. We're going to be looking to buy. I like
where we sit. I think things look really good. We'll see what happens this weekend with

(13:54):
China and the U.S. as they talk a little bit about tariffs. But
for right now, I think we're in a great place and
looking forward to doing some buying here if the market gives us another opportunity. So
I'm going to go ahead and wrap up. It was, gosh, longer than I expected. I just, I'm
long-winded these days. I apologize, right? We talk about 10 minutes
or less, and I just can't seem to get there right now. Anyway, hey,

(14:14):
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 it
is sell. your house in Jersey, move
all the way across the country to California to
pursue your dreams in Hollywood as a writer. You
know who I'm talking to. You know who I'm talking about. Hey, maybe

(14:35):
it is retire a little early. Maybe it is take that big trip with your
family. 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
BIG Investment Services. For more information on BIG and

(14:58):
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
foregoing content reflects the opinions of David Boothe and Boothe Investment Group,

(15:19):
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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potential for loss of principal. There is no guarantee that any investment plan or