Market Chacha: Mixed Signals & Tax Bill Blues

Fresh news and strategies for traders. SPY Trader episode #1184. Hey everybody, it's your pal Brad Pittiful here, and welcome back to Spy Trader! It's 12 pm on Thursday, May 22nd, 2025, Pacific time, and the market's been doing the chacha – one step forward, two steps back. Let's dive into what's been moving the needle today. So, we are seeing mixed signals today, with the market trying to recover after an initial dip following the House's passage of the new Trump tax bill. The Dow and S&P 500 took a hit early on but are trying to claw their way back. Nasdaq had a little jump but it is currently fluctuating. Remember yesterday? Ouch! Wednesday was a rough one, the S&P 500, Nasdaq, and Dow all had their biggest drops in a month. Even the small caps in the Russell 2000 got roughed up. Trump's Tax Bill just passed in the House, and it includes extending those sweet 2017 tax cuts, but it also slashes social programs, so it's a mixed bag. It still needs to get through the Senate, where it's likely to get a makeover. This bill is projected to add trillions to the US debt, so investors are a bit jittery about Treasury yields heading north. Speaking of which, the 30year Treasury yield is already climbing. We got some economic data that's giving us a thumbsup and a thumbsdown. Business activity improved in May, thanks to easing trade tensions with China. However, input prices are surging, which means higher inflation is on the horizon. The employment index dipped below 50, signaling worries about future demand, rising costs, and those good ol' labor shortages. Target reported weaker sales and lowered their guidance for the year, pointing fingers at economic uncertainty and wobbly consumer confidence. Walmart's thinking about raising prices to offset tariffs. TJX Companies – that's TJ Maxx, Marshalls, and HomeGoods – reported a sales increase, which may mean people are bargain hunting. UnitedHealth Group is in the spotlight because of reports about secret bonus payments to nursing homes, causing their shares to slide. Nvidia, Apple, and Tesla all took a tumble on Wednesday. But Navitas is doing great because of its connection with Nvidia. Oh, and mortgage rates are the highest they've been since midFebruary, hitting 6.86% for a 30year fixed mortgage. So what do you do with all this? Well, first off, remember that I'm just a funnynamed podcast host, not your financial advisor! But, based on what we're seeing, now might be a good time to think about spreading your investments around. Maybe consider putting some money into more stable sectors like consumer staples, healthcare, or utilities. Keep an eye on those interest rates and bond yields, because they can really shake things up. Be careful with those highflying growth stocks. They might be a bit overvalued right now and could be vulnerable if interest rates keep rising or the economy slows down. Make sure you are staying on top of the latest news and earnings reports. Consider talking to a professional financial advisor. Remember to review your risk tolerance and time horizon. These factors should guide your investment decisions, especially in a volatile market. Think about value stocks that may offer more attractive valuations and dividend yields. Alright folks, that's all the time we have for today. Keep your head up, your portfolio diversified, and remember: buy low, sell high... or at least try to! This is Brad Pittiful, signing off. See you next time on Spy Trader!