Episode Details

Fresh news and strategies for traders. SPY Trader episode #1261. Welcome, Spy Trader listeners! I'm your host, Moneybags Mike, and it's 12 pm on Tuesday, June 24th, 2025, Pacific time. We've got a lot to unpack today as the market continues its upward march. The major US stock indices, including the Dow, S&P 500, and Nasdaq, are all up around 1% or more, building on yesterday's gains and pulling us out of a recent threeday losing streak for the S&P 500. Looking back, the S&P 500 has climbed a healthy 2.64% to 3.00% over the last month and is up over 11% compared to this time last year. A big reason for the market's recent surge is the growing optimism surrounding a potential ceasefire between Iran and Israel. This deescalation has sent oil prices tumbling, with West Texas Intermediate crude futures falling significantly to around $65.45 a barrel after hitting nearly $77 earlier in the week due to the conflict. On the domestic front, President Trump's new tariff policies, which started on April 2nd, initially caused a global stock market wobble. However, his announcement on April 9th to pause further increases sparked a historic rally. Still, these ongoing trade policies remain a point of uncertainty, with concerns that they could fuel inflation and slow economic growth. Now, let's dive deeper into the economic landscape and what it means for your portfolio. Our economy saw a slight contraction in the first quarter of 2025, with real GDP shrinking by about 0.2% to 0.3%. That's the first quarterly decline in three years, mainly due to increased imports and reduced government spending. However, the Federal Reserve Bank of Atlanta's GDPNow model is forecasting a rebound, estimating real GDP growth of 3.4% for the second quarter. But overall, forecasts for 2025 suggest economic growth will moderate compared to last year. Inflation is also a factor. The annual inflation rate, measured by the Consumer Price Index, edged up to 2.4% in May, up from 2.3% in April, marking its first acceleration in four months. Core inflation, which excludes food and energy, stayed at 2.8%. There are some thoughts that President Trump's new tariffs are contributing to this rise. Looking ahead, inflation could continue to climb, possibly peaking at 4% in the second quarter of next year, driven by those tariff effects. On the employment front, the labor market remained stable in May, with the unemployment rate holding steady at 4.2%. Nonfarm payrolls increased by 139,000 jobs, a bit less than April's 147,000. Despite overall resilience, we've seen nearly 160 companies across various sectors, including federal agencies, announce significant job cuts for June. Regarding interest rates, the Federal Reserve kept its benchmark rate at 4.25% to 4.50% at its June meeting, the fourth meeting in a row without a change. Fed Chair Jerome Powell indicated that the central bank needs more time to assess the economic impact of the tariffs before making any policy adjustments. Despite holding steady, the Fed's projections still anticipate two rate cuts in 2025, with many market participants expecting the first cut in September or October. Shifting to sector performance, over the past month ending June 20th, Energy has been the top performer, gaining over 5.5%, followed by Information Technology and Communication Services. However, on June 20th alone, Consumer Discretionary and Real Estate led the gains, while Energy was the only sector to decline. Yeartodate, Industrials have performed strongly, along with Utilities and Consumer Staples. In contrast, Health Care and Consumer Discretionary have seen declines yeartodate, with Information Technology, despite recent daily gains, up just under 2% yeartodate as of June 20th. When we look at individual companies, megacap tech stocks, particularly chipmakers like Broadcom and Nvidia, have been driving recent rallies. Nvidia, in particular, reported stellar firstquarter fiscal 2026 results with significant revenue and free cash f