Market Mayhem: April 11th Breakdown

Fresh news and strategies for traders. SPY Trader episode #1089. Hey everyone, it's your pal Penny Pincher here, ready to break down the market for you on Spy Trader! It's 6 pm on Friday, April 11th, 2025, Pacific time, and boy oh boy, has it been a week! Let's dive right in. First off, the market's been more volatile than my Aunt Mildred trying to parallel park. The difference between the weekly high and low for the S&P 500 was the widest since late March 2020. After a surge on Wednesday, stocks took a tumble on Thursday, giving back a lot of those gains. Yeartodate, the US500 is down 522 points, or about 8.88%. But hey, Morningstar says the US equity market is trading at a 5% discount to fair value, so maybe there's a silver lining. Now, let's talk sectors. Value stocks are the cool kids right now, seriously outperforming growth stocks. Morningstar's been recommending overweighting value and underweighting growth. They previously suggested underweighting consumer cyclicals, financials, consumer defensive, tech, and utilities, but recommended overweighting real estate, energy, healthcare, communications, and basic materials. I'll tell you what I think in a minute. Speaking of sectors, technology took a hit with NVDA, META, and AAPL all seeing red. Energy got slammed too, with XOM and CVX feeling the pain. TSLA in consumer cyclicals also had a rough time. Healthcare was a mixed bag – UNH went up, but LLY went down. Financials weren't spared either; JPM and BAC both declined. Big news this week includes the ongoing trade war between the US and China. Tariffs are flying left and right, making investors nervous. China's new tariff rate is at 125% on some goods, and the US countered with 145% on some goods. On the bright side, Boston Fed President Susan Collins reassured everyone that the Fed's ready to step in and keep things stable. Also, major banks reported mixed Q1 earnings. Morgan Stanley and JPMorgan Chase did better than expected, but Wells Fargo missed on net interest income. Looking at the bigger picture, the US economy showed some pep in 2024, but there are signs of a slowdown this year. Inflation is expected to rise, and consumer sentiment is down. Remember when inflation expectations hit a peak not seen since 1981? Oh, and those AI stocks that were all the rage? They’ve officially entered a bear market. Many have sold off 20% or more since their peak. Plus, recent insider trading activity suggests caution in tech and consumer cyclicals. Okay, Penny's two cents. Given all this craziness, I'm sticking with Morningstar's recommendation to overweight value stocks. Even though growth stocks have been hit hard, I'm not ready to jump back in just yet. Sticking to US Treasuries for bonds, and definitely underweighting corporate bonds. In a market this jumpy, broader diversification is your best friend. I believe it is the key to surviving this market. Here's a joke for you: Why do economists make poor comedians? They lack the timing. Remember, this is just my opinion, not financial advice. Do your own homework, folks! Until next time, happy trading and stay safe out there!