stock market Archives – Page 31 of 125

Lower Your Fed Hopes, Trump and Investors

John Paul / May 5, 2025

All Eyes on the Fed This Week — Even Without a Rate Cut The Federal Reserve is set to hold its policy meeting on May 6–7, and while no interest rate cut is expected, markets and political leaders—including former President Donald Trump—will be watching closely. Trump has repeatedly called for lower rates, arguing that inflation is under control and that cheaper borrowing costs would boost the economy and markets. On Friday, he took to Truth Social with an all-caps post: “NO INFLATION, THE FED SHOULD LOWER ITS RATE!!!” Lower rates could support economic growth and strengthen Trump’s economic platform, but the Fed has shown no urgency to move. Chair Jerome Powell and the central bank remain cautious, pointing to inflation risks tied to Trump’s own policies, including tariffs and immigration restrictions. After three rate cuts in late 2024, Powell signaled in December that further reductions would be limited. The Fed’s projections, or “dot plot,” now show just 50 basis points of cuts in 2025—half the amount anticipated earlier. That shift triggered a nearly 3% drop in the S&P 500. Part of the Fed’s hesitation stems from the uncertainty surrounding Trump’s economic agenda. New tariffs, tightened immigration enforcement, and shifting trade policies haven’t fully worked their way through the economy. Many of the announced measures have been delayed or revised, complicating the Fed’s decision-making process. “There’s a real divide between hard economic data and softer indicators like sentiment surveys,” said Allen Bond, portfolio manager at Jensen Investment Management. “We’re starting to see weakness in the soft data, but not yet in the hard numbers.” Trump’s Attacks on Powell Rattle Markets Tensions between Trump and Powell flared in April, after Powell warned that tariffs could drive inflation higher and emphasized a wait-and-see approach. Markets fell sharply—6% on April 4 and another 2.2% on April 16—on concerns that the Fed wouldn’t act swiftly enough to counter economic disruptions. Trump lashed out at Powell, calling him “Too Late Jerome” and suggesting he could fire him—comments that alarmed investors and raised concerns about the Fed’s independence. The S&P 500 dropped another 2.4% the day Trump made those remarks. According to Steve Sosnick, chief strategist at Interactive Brokers, Fed independence is one of the reasons global investors trust U.S. markets. Undermining that trust can have serious consequences. “Casting doubt on the Fed’s autonomy shakes investor confidence,” Sosnick said. Trump later walked back his threat to fire Powell, and markets quickly recovered. The S&P 500 launched into a nine-day winning streak—the longest in more than 20 years—fueled partly by optimism over trade talks and relief that the Fed’s independence was intact. What Comes Next As this week’s Fed meeting approaches, markets are riding high. But investors know the rally may be vulnerable if Powell doesn’t deliver the dovish tone they’re hoping for. According to the CME FedWatch Tool, there’s a 99.5% chance the Fed will hold rates steady in May, with markets still pricing in three cuts by year-end. Still, Powell has made it clear that the Fed wants more clarity—particularly on the inflationary effects of tariffs—before making any policy moves. With the current 90-day pause on new tariffs ending in July, June could also be too soon for a rate cut. Sosnick sees only two scenarios where rate cuts are likely: either inflation slows significantly, or the economy deteriorates enough to force the Fed’s hand. “The second scenario is one where you have to be careful what you wish for,” he warned. Markets ended last week on a strong note. The S&P 500 rose 2.9%, the Dow gained 3%, and the Nasdaq climbed 3.4%. Both the Dow and S&P 500 logged nine-day win streaks—something not seen since 1992. The question now: Will Powell’s remarks keep the rally alive, or reset expectations? John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

The Apple Selloff Paradox

John Paul / May 2, 2025

Apple Beats iPhone Sales Expectations, but Tariff Uncertainty Weighs on Investors Apple Inc. exceeded Wall Street expectations with its latest earnings report, driven by stronger-than-expected iPhone sales. However, a lack of clarity from executives on how the company will handle potential tariff impacts left investors uneasy, sending the stock down nearly 4% in after-hours trading on Thursday. While CEO Tim Cook provided some commentary on rising trade costs, the company’s guidance did little to reassure markets. Apple projected an additional $900 million in costs for the June quarter if current tariffs remain unchanged — a figure that doesn’t account for a possible economic slowdown. Still, Apple’s financial results for the quarter were solid: However, not all metrics were positive. The narrow margin of Apple’s outperformance, combined with weakness in some areas, didn’t ease investor concerns about future performance. There’s also skepticism over whether the strong iPhone results were boosted by a rush to purchase ahead of expected tariff hikes. Cook dismissed this theory, noting that iPhone inventory levels remained consistent throughout the quarter, suggesting stable demand rather than a pre-tariff buying spike. When it came to forward-looking guidance, Apple offered limited insight beyond the current quarter. However, Cook did outline changes in Apple’s supply chain aimed at mitigating trade risks. He said 50% of iPhones shipped to the U.S. are now made in India — a share expected to rise and become the majority in the June quarter. Most iPads, Macs, Apple Watches, and AirPods will now come from Vietnam. These shifts suggest Apple is anticipating higher U.S. tariffs on Chinese-made products and is working to reduce its exposure accordingly. Cook confirmed that products sold outside the U.S. will continue to be manufactured primarily in China. Despite investor concerns, some analysts remain optimistic. Kevin Cook, a strategist at Zacks, called the $900 million tariff cost relatively modest, noting the company’s agility in restructuring its operations. “If any global tech company can adapt quickly and effectively, it’s Apple,” he said. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

Meta Shows AI Bets Are Paying Off

John Paul / May 1, 2025

Meta Hikes AI Spending—but Strong Ad Growth Keeps Investors Onboard Meta Platforms Inc., the parent of Facebook, raised its capital expenditure forecast for the year, signaling an aggressive push into artificial intelligence. But thanks to strong quarterly results, investors appear unfazed. The company now expects to spend $64 billion to $72 billion on capex in 2024, up from its prior range of $60 billion to $65 billion. That’s a sharp increase from the $39 billion it spent last year. The spending surge reflects Meta’s efforts to ramp up AI infrastructure and stay competitive in a crowded tech landscape. Investor concerns about runaway AI spending were top of mind heading into earnings season—especially amid fears of slower ad growth due to economic pressures and tariffs. But Meta’s solid performance helped offset those worries. The stock climbed 5.4% in after-hours trading Wednesday. Meta reported first-quarter earnings per share of $6.43, beating Wall Street’s estimate of $5.23 and rising from $4.71 a year earlier. Advertising revenue hit $41.39 billion, ahead of expectations and reflecting stronger-than-anticipated growth. “Ad growth in the quarter was much better than anticipated, especially on a constant-currency basis,” said Gil Luria, head of technology research at D.A. Davidson. He noted that the stronger revenue gives Meta more flexibility to raise its investment levels. By contrast, Alphabet Inc. kept its capex guidance flat at $75 billion last week, highlighting a more cautious approach. Meta defended its ramped-up spending, saying it’s necessary to meet internal demand for compute power and build out advanced AI systems. Management believes these tools will directly improve its advertising business by enhancing targeting and boosting conversion rates. Although the company flagged some softness in Asia-based ad spending tied to tariff concerns, it said overall trends for Q2 are healthy. Meta guided for revenue of $42.5 billion to $45.5 billion, with the midpoint above analyst estimates. To further bolster ad revenue, Meta is expanding placements into new products like Threads and WhatsApp, while continuing to use AI to help advertisers improve performance. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

Why Are Markets Rising Amid Recession Fears?

John Paul / April 30, 2025

Markets Rebound Despite Recession Fears as Trump Pushes Trade and Tax Reforms Treasury Secretary Scott Bessent said Tuesday that President Donald Trump is making meaningful progress on trade deals and a new tax bill — developments that have offered some relief to investors as April’s volatility winds down. Optimism around potential pro-growth policies has helped the S&P 500 log its longest streak of gains since November, despite lingering concerns. However, Trump’s tariffs announced on April 2, and partially paused on April 8, rattled global markets and deepened anxiety among U.S. businesses and households. The moves triggered stock market turbulence and raised fears of a potential recession. Luke Tilley, chief economist at Wilmington Trust, said his team shifted to a “recession as baseline” outlook on April 9. He noted that even if the new tariffs are rolled back, overall import duties remain elevated compared to historical norms. Wilmington now puts the odds of a recession at 60% within the next year, expecting it to be short and shallow. So why the rally in stocks? Investors appear to be looking past short-term volatility, betting that the worst may already be priced in. Tilley pointed out that in past recessions, the S&P 500 has fallen around 20% on average — roughly in line with recent losses — and typically recovers within 11 months. As of April 8, the index was down 18.9% from its February 19 high, and 21.3% on an intraday basis when including April 7. Still, the market’s ability to bounce back quickly has given some investors confidence. Yet challenges remain. The S&P 500 is down 7.3% over Trump’s first 100 days in office — the worst showing since Nixon’s second term. Meanwhile, Bessent has warned that markets need to “detox” from pandemic-era stimulus after years of outsized gains. Adding to the uncertainty is the drop in the S&P 500’s price-to-earnings ratio — from 22x at the end of last year to below 20x — driven by doubts over Trump’s policies and competition from China’s AI advancements. “It’s hard to justify a return to 22x valuations amid slowing earnings, weaker economic data, and rising uncertainty,” said Keith Lerner of Truist Advisory Services. Still, markets found footing Tuesday. The Dow rose 300 points (0.8%), while the S&P 500 and Nasdaq both gained 0.6%, according to FactSet. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

Is Consumer Fear Trump’s Economic Weak Link?

John Paul / April 29, 2025

Consumer Confidence Takes Historic Nosedive in Trump’s Early Months Amid Tariff Fears President Donald Trump’s return to the White House has been marked by a steep and sudden decline in consumer confidence—falling faster than at any time since the 1990 recession. Daniella Knight, a mother of three from Annapolis, Maryland, says she’s already feeling the pressure. “I’m terrified,” she said, worried that Trump’s tariffs will drive up everyday prices. “Politicians won’t feel it if the price of milk or electronics goes up—but families like mine will.” Despite campaigning on promises to revive the economy and ease financial stress, Trump’s early economic moves—especially sweeping tariffs—have rattled markets and fueled anxiety. Polls show that many Americans feel worse off than they did when Trump took office just months ago. Consumer sentiment has dropped sharply, with Americans increasingly pessimistic about their finances, job prospects, and the broader economy. Many are cutting back on spending, skipping large purchases, and tightening household budgets—moves that are already being felt by businesses. “Sentiment across consumers, investors, and businesses is down, and that matters,” said Mark Zandi, chief economist at Moody’s Analytics. “That kind of uncertainty will weaken the economy.” According to University of Michigan’s long-running consumer sentiment survey, expectations have dropped around 30 points since January—the steepest early-term drop for a president in more than three decades. “This isn’t a normal post-election fluctuation,” said Joanne Hsu, the survey’s director. “It’s a major decline.” Tariffs are a recurring concern among respondents, even though they aren’t directly mentioned in survey questions. While some tariffs have been paused, others—such as a 10% baseline tariff on many imports—remain in place, adding to consumer uncertainty. Gallup recently found a record 53% of Americans say their financial situation is worsening—surpassing the peak pessimism of the early pandemic. And Fed data shows fewer people expect financial improvement, with more anticipating decline. The political divide is stark: Republicans, buoyed by Trump’s return, now report far more confidence than during the Biden years. But even among Trump voters, worry is growing. Support for tariffs among Republicans has dipped slightly, while opposition has risen. Still, the White House remains optimistic. “President Trump’s policies created historic economic growth during his first term, and we’re doing it again,” said spokesman Kush Desai. But signs of strain are mounting. Retailers and homebuyers are pulling back. Redfin reports one in four Americans are canceling major purchases due to tariff-related uncertainty. Airlines and major brands like Chipotle and Procter & Gamble are lowering expectations as consumer spending slows. Mortgage delinquencies are on the rise, especially among first-time and lower-income buyers. Job security fears are also increasing: nearly a third of workers say they’re worried about layoffs, according to recent surveys. “People make decisions based on what they think is coming,” said Hsu. “If they don’t feel confident, they stop spending—and that drives the economy.” For Knight, the outlook is clear: “I’m already trying to find ways to cut back, but with kids, that’s not easy. Prices are rising, and it feels like there’s no safety net.” John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

S&P 500 Stalling? Turn to Oversold Stocks Instead

John Paul / April 28, 2025

Morgan Stanley: Stick with High-Quality Cyclical Stocks as Market Remains Rangebound As the S&P 500 continues to trade sideways, Morgan Stanley strategists are advising investors to focus on high-quality cyclical stocks that have already priced in a potential slowdown in both earnings and economic growth. Led by Mike Wilson, the team at Morgan Stanley notes that the S&P 500 remains trapped between 5,000 and 5,500. While they see the next resistance between 5,600 and 5,650, they don’t expect a meaningful breakout until several catalysts materialize: a significant U.S.-China tariff reduction (currently at 145%), clear signs of Fed interest-rate cuts, a drop in the 10-year Treasury yield below 4.0%, and a strong rebound in corporate earnings revisions. Markets are facing a critical week of data releases. Wilson and his team point to Friday’s nonfarm payrolls report and Thursday’s ISM manufacturing survey as key events. A swing in ISM data — expected between 46 and 48 — could significantly move stocks. While some slowdown has been priced into equities, the risk of a broader labor market downturn or mild recession has not, they warned. Sustained stability in labor data over several months would be needed to ease those concerns. In the meantime, Morgan Stanley recommends a balanced approach: maintaining defensive exposure while selectively adding to high-quality cyclical stocks that have already adjusted to weaker conditions. Their definition of “quality” includes companies with strong management teams, consistently high returns, and healthy balance sheets. “Cyclicals” are companies whose earnings closely track economic growth. To help guide investors, the strategists screened the top 1000 U.S. stocks by market capitalization, focusing on those rated overweight or equal weight by Morgan Stanley, considered cyclical, and deemed less risky based on several valuation and performance metrics. The top five stocks from their screen are: Other notable mentions include Mattel, Nike, and several bank stocks. Overall, Wilson and his team prefer U.S. equities to international ones, citing a weaker dollar that should support U.S. earnings more than those in Europe or Japan. With earnings less volatile and a bias toward higher quality, they see the U.S. market as better positioned in today’s late-cycle environment. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com