Week Ending 09_19_2025 Stock Market Recap

Markets had a surprisingly positive reaction to a pretty hawkish Fed announcement this week. Should we trust it? 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 B-I-G, Boothe Investment Group.
We're a full-service financial advisory based out of Dover, Delaware, serving
clients all across this great country. And you

(00:56):
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, September 19th, 2025. Some

(01:17):
shout outs to Kevin, Don, Rich, Wayne, Carol, Carl, Lynn. All
the folks coming in are touching base with us this week. We appreciate it so much.
And I got to take a moment just to give a really gigantic thank
you once again to all of our Delaware clients. A
couple of weeks ago, we were honored to receive the Reader's
Choice Award for the Delaware State News. And this past week, we

(01:38):
received the Reader's Choice Awards for the USA Today family
of papers there in Delaware. all driven by clients voting for
our firm. And what a great honor. You just can't get
a bigger pat on the back than that. So thank you so very much.
And I've got to give a super shout out to our team. A
lot of folks get up in the morning and they go to work at a job. I

(01:58):
believe our folks get up in the morning and they go to serve a mission and
that mission is to accomplish client outcomes, the
level of service that's just second to nobody. I
really believe it's just the best group in the business. So big
shout out to Daniel, Lisa, Julia, Rachel, Tessa, my partner, Christina.
My boss, Carol, Carol's like everybody's boss. Carol's

(02:20):
like the boss of people that don't realize Carol's a boss. She'll like call up
another firm. She's like, this is what you're going to do. This
is how you're going to do it. And this is when I expect it to get done. And they're like, yes,
ma'am. And how about a shout out to Skipper, our CEO, our chief emotional officer,
because without him, we would all surely be dead from
the bloodthirsty squirrels that are constantly wanting to

(02:40):
take us out. And without him, I wouldn't even be here today, more
than likely. So anyway, no, seriously, thank you all so much. My
team, our clients, everything, real special time. So
hey, let's jump into the numbers. Let me tell you what's going on this week. The market pushed
higher. Dow Jones up 1%, S&P up 1.2, the
NASDAQ up 2.2, and the Russell small caps up 2.1%. So everything pushing

(03:03):
a little higher this week, but something else pushing higher this week, something
to go, hmm, volatility index
up 4.6% this week, even though the market pushed higher.
That's interesting and that's something to pay attention to. Another
thing that was interesting this week, and we're going to talk
about this in a moment, but long-term bonds dropping this

(03:25):
week, dropping hard, dropping 1%. What does that mean? It
means long-term interest rates went up. But
I'm sure you heard the news. The Fed did cut rates.
So why are rates going up? We'll talk about that in a moment. Look, when
you look at the sectors, kind of a mixed bag, I'll just say this. A lot of the defensive areas,
things like utilities and staples, they also tend to be a little bit interest rate

(03:46):
sensitive at times. They were down. Everything else was pretty much up.
And then gold was up again, 1.1%, silver up 1.8%. Again,
maybe the same reason why bonds are down. We'll talk about
it. So let's kind of discuss what went on this week. You know, Jim asked
a question out there on the internet. Why did
the Fed cut a quarter point nine and a half? By the way, you can ask questions. You

(04:07):
can just write info at abigplan.com. Info at
abigplan.com. Ask a question. I'll try to answer it.
But listen, look, some of you listening are friends of mine. Info
at abigplan.com does not go to my inbox. It goes to Julia's. So
behave yourselves. Don't try to be funny, asking some stupid question.
Okay. I know some of you guys, I know what you're going to try to do. No, no,

(04:29):
no. Keep it clean and keep it, keep it related to the topic. Okay.
Don't try to be funny. But anyway, why a quarter point? Why not a
half? What's going on there? So a couple of things, Jim,
and look, we expected a quarter point. That's what we said last week.
We thought the Fed would cut it. We thought they'd cut a quarter point. They signaled it
really back in August that they were ready to cut. I just didn't think the data

(04:50):
was strong enough to warrant half a percent. Why is that?
Look, we still have 3% GDP growth. The economy is showing
growth at 3%. Earnings are back into expansion
mode. There's a lot going on within the economy that
looks like it's hanging together, that it's still on track and
that it's not rolling over yet. So the Fed

(05:11):
just didn't feel like they had enough data to do that. And then on top of that, I'll also say
this. inflation is still staying rather sticky. We're
right under 3%. It's not like we're way down to
that 2% or lower level. We're just a tick under 3%. Some
of the internal metrics of these inflation numbers have been ticking
a little bit higher. And the Fed is concerned if they get

(05:32):
too aggressive here cutting rates and they let the inflation genie
back out of the bottle, watch out. That's what
happened back in the late 70s, early 80s. We
raised rates to slow inflation because it was getting out
of control and the Fed let off the gas too soon.
They cut too much too early. Inflation came back. It

(05:53):
came back with a vengeance and mortgages were 13%, 13% mortgages because
inflation got so crazy. We
don't want that to happen. The Fed doesn't want to happen. And look, Powell
said it. They're between a rock and a hard place. They see some of
the weakening data in the economy, especially in regards to jobs. And
listen, I have to tell you, I was really surprised at

(06:15):
the market reaction this week because it was an extremely hawkish
cut. and I didn't think the market would like that, and I still
don't think the market will like that. I still think that maybe we're not really seeing the market's
true colors just yet. I'll explain why in a moment. But it
was a very hawkish cut. Fed Chair Jay Powell, he made absolutely zero,
nada, no indication. that they were fully on

(06:36):
board with additional rate cuts. He made it seem like they were going
to be exceptionally focused on the data as it continues to come
out. He called it a risk management cut, like an insurance cut, but he
did not sound decisive in any way, shape or form. And when you look
at the Fed as a whole and you look at the voting, it
was one of the biggest train wrecks I've seen in my career. on

(06:56):
Fed decision day. It was a mess, okay? Six
Fed folks said no more cuts. They voted for no more cuts. Two
said only one more cut. Nine said two more cuts. And one
guy said five more cuts. We're not even going to talk about that.
There's nothing on the horizon that suggests that's necessary. If
you do something like that, you run all kinds of crazy risk for inflation and also

(07:17):
not having any ammunition if the economy does roll over, right? Five cuts,
not really a worthy conversation at the moment. But six folks said
they do not expect any more cuts, and two said only one more. The
market's got three priced in this year, all right,
and more priced into next year, yet it went higher. So
I found that interesting, but I will say this. History has

(07:37):
shown that when the Fed cuts interest rates
in the midst of an economic expansion, the
market does well looking out 12 to 18 months. Okay.
I get that. But here's the question. Are we really
in an economic expansion? Why did the Fed cut rates
to begin with? Because jobs are tanking. They

(08:00):
are dismal. We have horrific jobs numbers and
the Fed is getting nervous. That's why they cut. The 25 basis
points, what's it going to do for anybody, Jim? Nothing. Squat. Nada.
Did mortgages come down this week? No, they didn't. They went higher. They
went higher because the bond market's like, hey, what are you doing? Inflation
is still kind of hot here. This really doesn't look like it's time

(08:22):
yet to cut. And the long-term bonds, they're not in
agreement with the Fed. The long-term bond market is getting increasingly worried
about our debt. Our debt situation is just
getting out of hand. Our budget deficit is higher this
year than it was last year. It was higher last year than it was the year before. It was higher
the year before than it was the year before that. We are not going in the right direction

(08:42):
in any way, shape or form. And a long-term bond market is getting
worried. I think that's also why gold went higher this week.
It's why bonds went lower and rates went higher. It's why gold went
higher this week. There are people that are fearful about
our fiscal situation, and I understand it. But
getting back to the topic. Are we really in an economic expansion? I

(09:03):
think we are. I'm cautiously optimistic, but
I have concerns. Look at the unemployment rate. When the unemployment rate
is higher than the 36-week moving average, watch out.
It tends to happen prior to recession. We've been there for a while now. The
leading economic indicators. They've been negative for almost three
years. It's never happened before. We've never had leading economic indicator

(09:26):
index be as poor as it's been for the last two, two
and a half years. It was negative again this week when they announced. Earlier
this year, end of last year, coming into this year, the longest yield curve inversion
in United States history just corrected itself, just corrected
itself. And listen, anytime the yield curve inversion has
gone on long like that in the past, which we've never gone this

(09:47):
long, but whenever it's happened like that in the past, a recession followed. Okay.
Then there's other little things like corrugated cardboard. Lumber, these
things are collapsing right now. And of course, I mentioned jobs. Now, jobs are
usually the last thing to break is the jobs market.
So by the time jobs start to look pretty bad, lots of the
crap is hitting the fan. I can't really say we're seeing that right now. It's almost

(10:09):
like things are just kind of like askew and out of whack and
not operating like they normally do. But guess what? This entire
cycle has been that way. The whole thing's been that way because
the United States federal government decided to print $6 trillion and
dump them into people's bank accounts. It has screwed everything up.
Every metric that usually is a telltale sign

(10:32):
of what may be to come has missed the mark. It's
why we've had to lean so heavily on market technicals really
since COVID. Without that, we wouldn't have made anywhere near as much money as
we've made at times. I mean, I remember coming into 2023, the
whole world was calling for a major recession. The technicals of
the market said, no, we're going higher. We got loaded up and we

(10:52):
had a great year. My point being, a lot of the
traditional indicators that economists and market participants
can bank on, they're not bankable. They're not bankable because
we've monkeyed with the system so much that everything is kind of out
of whack. And therefore, I don't trust
where we are or where we're headed fully. I just

(11:14):
don't. I'm cautiously optimistic. Earnings are
expanding. A lot of the policies that have come
to fruition should be good for the economy. I
think things can go higher, but I don't trust.
I just don't. I just don't. So what did we do? What are
we doing? Well, I mentioned to you months ago that

(11:34):
as we entered towards the end of the year, the close of the year, be
on the lookout. I'm probably going to do some trimming. Look, we're having a big year.
We loaded up early in April when the market was crashing
and our flagship model, the model used by most of our clients up 22% right
now. So you got to take some profit out of the market. So that's what we did this
week. And we closed the position, closed Shopify. I

(11:55):
love it. It's a great business, a really great business, but
we bought it last May for 58 bucks, sold
it at 147. The valuation on it, it's a nosebleed valuation.
It's very expensive and it's poised to take a really big hit if
for some reason the market decides to roll over. We actually
closed the entire position. If it goes back down to its breakout level

(12:16):
around 80 bucks, I'll probably buy it back again. And it could get there in a couple
of days. That's how volatile the stock can be. So we took that profit. We
trimmed back Uber. We also bought that May of 2024 when
we bought Shopify. We paid $67 for it. We trimmed that
this week at $98. We trimmed Citi. We bought that
last August for $59. It's $102 today, right? So

(12:37):
we had to trim that one back. CrowdStrike, we bought that last July.
Our cost basis is 255 bucks. It's at
$501 today. We have to trim that one. And then Alibaba, right? We bought
that November of 23, it's $75. We trimmed that at 162. Remember, there's a difference between closed and
trimmed. Shopify
was closed, everything else was just trimmed. I love these companies, I

(13:00):
like these stocks, but when we've got these gigantic returns,
you've got to be prudent, you've got to take that profit, and
you've got to tuck it away. And tuck it away is what we did. I added some
money to bonds with Jeffrey Gundlach over there at DoubleLine. I
had some money with Mark Bushalo over at Manning& Knapp, your high-yield bond fund.
And for all the competitors listening in to the podcast here, it's

(13:22):
a great fund. It's the number one fund in the country, but unfortunately you can't buy it right now.
We have an exception to still use it with Mark and the company, but it's a great
fund, paying 8.5%. And the other thing we did is we added some more
to the managed future strategy because I want a little bit more
of protection for the unexpected because I just
don't trust the environment. I think the market can go higher. I

(13:43):
don't think a recession is imminent. Nothing along those
lines, nothing's screaming that to me at all in any way, shape or form.
But I do believe we've done very well.
The market is very expensive. Look, I was listening to David Tepper this week. This
dude, he is a pro, right? He is just a really
top dog investor in the world. He owns the Carolina

(14:04):
Panthers. Guy's a really sharp guy. Listening to
him talk this week, and I was so happy to
hear what he said. He said, look, with a Fed cutting,
you've got to think that maybe things are going to continue to be constructive, but
it is very uncomfortable because things are very
expensive. Nothing is cheap. That echoes my

(14:26):
sentiments. That's exactly how I'm feeling. So what we're doing,
what we're migrating to is really moving the
portfolios to all weather. all weather portfolios that
are going to handle, in my opinion, anything that can be
thrown at us, any curveballs that come out of left field.
Am I mixing analogies? I am. Any curveballs that are thrown at

(14:47):
us, anything that comes from left field, let's separate the
analogies, David. Let's not put them all together. just trying to
get these portfolios so they can withstand anything that might come
because we just can't load up on U.S. market right now. I
think it's maybe a more dangerous thing to do. We still have plenty of
exposure. We've got exposure to great stocks. If the market rips

(15:07):
higher, we're going to make plenty of money. Are we going to make as much as we made this
year? Maybe not, but I'm okay with that. We
also have good foreign exposure. If the U.S. dollar continues to
be weak, and maybe it will with the Fed cutting rates, Hey,
foreign stocks should continue to do well. We still have our gold exposure. We
trimmed it a couple of weeks ago, but we still have it. We just got plenty of

(15:27):
exposures to things that should do well if the market wants to go higher. But
we also have some nice defensive plays with a bond space, and
we've got the managed futures, which really act independently
when things go awry like they did in 2022. You got inflation
running out of control, bonds, stocks, everything taking a hit. So
that's what we're doing. I know it's a lot to cover, but there's a lot going on

(15:49):
and you're going to see a lot of activity coming in on
your portfolios. I'm sorry. It's been a couple of long weeks. I think
that next week we'll get back to that 10 minutes or less. But
look, thanks for hanging with us. Tune in. Thanks for giving us so much support
out there. It means the world to us. Thank you so much, everybody. So
between now and next meeting, as you're thinking about your future long-term goals, all the things you

(16:11):
want to do with you and your money. Maybe it's buy that
pool heater, Christina, so your family can kind of
use that pool a little bit longer. You can force summer to last just
a few more weeks longer. Hey, maybe it is buy
that second house. We got someone working on that. Maybe it's retire a little
early. Lots of folks trying to do that right now. You know what your goals are.

(16:31):
Don't just think about it. Think big. Think B-I-G. And
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
how you can access their planning and investment management services, visit

(16:52):
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,
Inc. and is subject to change at any time without notice. There is no guarantee

(17:13):
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
purchase or sale of any security. All investing involves risk, including the
potential for loss of principal. There is no guarantee that any investment plan or