Market Waves: Trade Truce & Sector Shifts

Fresh news and strategies for traders. SPY Trader episode #1159. Hey everyone, it's your pal Finny the Fish, and welcome to Spy Trader! It's 6 pm on Monday, May 12th, 2025, and we're diving headfirst into the choppy waters of the stock market. Let's see what's been making waves today. First up, some seriously good news! The U.S. and China have called a truce in their trade war, agreeing to hold off on new tariffs for 90 days. Remember those skyhigh tariffs? Well, the U.S. has dialed back levies on Chinese goods to 30%, and China's doing the same, cutting tariffs on American products to 10%. No wonder the stock futures jumped for joy! On the medical front, President Trump is looking to sign an executive order to bring down drug prices, aiming to match what other countries are paying. Pharma stocks initially took a tumble on the news, but they've since bounced back. It looks like the market may not think these changes are really going to happen. And speaking of keeping things steady, the Federal Reserve decided to hold interest rates steady at that 4.25% 4.5% range during their May meeting. They're keeping an eye on those pesky risks of rising unemployment and inflation. So, it's a little bit of a wait and see. Now, let's talk sectors! Remember way back in Q1, when tech was getting hammered? Well, things have been shifting. Consumer discretionary is showing some muscles lately, while consumer staples and utilities are lagging. The big tech giants Apple, Nvidia, Amazon, Meta, Alphabet, and even Tesla, have all been doing pretty well. Energy, after a strong start, has been the worst performer recently. Seems like folks are taking profits after that initial jump earlier in the year. So, what do Finny and the fishy crew recommend? Well, first things first, spread your investments around! Don't put all your clams in one basket. Given the economic uncertainty, think about defensive sectors like healthcare, consumer staples, and utilities. Keep a close watch on those economic reports like GDP, CPI, and unemployment – they’re like the tides of the market. And don’t forget to follow company events and earnings reports because they can give you a serious edge. Also, with equity valuations being kinda high, you might want to be cautious. Finally, think about dipping your toes into smallcap equities, especially with sentiment improving. Or lengthen the duration of your bond portfolio. And here's a final thought: keep that longterm perspective! And if the market dips, that might be your chance to grab some deals. That's all for today's Spy Trader! Remember, I'm just a goofy fish giving you my thoughts, so don't take this as gospel. Always do your own research and talk to a real financial advisor before making any big moves. Until next time, happy trading and may the market be ever in your favor!