Another wild week for stocks.
Another wild statement by Trump about Fed Chair Powell.
Another confusing time to contemplate what happens next.
But we will try our best in this week’s edition of the Reitmeister Total Return.
(Plus be sure to see 2 new trades added in the Portfolio Update section further below.)
Market Outlook
The only good thing that can be said about the market at this moment is that we are above the recent lows and still not in bear territory for the S&P 500 (SPY) which is below 4,918.
Not much else is resolved. Starting with the #1 thing on everyone’s minds which is tariffs.
The 90 day hiatus gives us some more time to see how things turn out. But also gives us another extended period of uncertainty that keeps the odds of recession too high for anyone’s liking.
That provides a good segue to the recent Retail Sales report from last Wednesday. It showed the healthiest monthly increase since January 2023.
The best way to read this info is that consumers could only sit on their hands for so long before spending. Thus, the built up savings from the last couple months were released into the economy.
The worst way to view this is that consumers are afraid of what tariffs mean for certain products and thus are rushing out to buy them now before the price goes up. If that is true, then we are pulling demand forward which often creates a cliff for the economy that we fall into.
In other interesting news, Trump continues to berate Powell in the media. This is truly one for the ages and only adds to uncertainty.
Most experts agree that Fed should be independent of the Executive branch...but few would expect that to be the case with whomever Trump would select to replace Powell.
FedWatch odds of future rate movement seem little changed on this news. Meaning that Powell is unlikely to cower to Trumps demands to lower rates now.
This shows up in 94% certainty of odds remaining the same at the upcoming May 7th meeting. However, that flips to 70% likelihood of a rate cut at the June 18th meeting. That view has remained pretty solid going back a few months. Yet doesn’t jive very well with recent Fed statements saying they still see tariffs as inflationary and thus are cautious as to making their next move.
Honestly at this moment the Fed is not a real player in the movement of the stock market. What matters is tariffs and that continues to be a puzzle wrapped in an enigma inside a riddle... very difficult to solve.
This keeps our investment plan on the cautious side at just 50% long the stock market. Beyond a large inverse ETF position, we will longer be holding any cash as I have a better place to put that money with the 2 new trades being shared below.
What To Do Next?
The 2 new trades are reserved for Reitmeister Total Return members. That also includes other hand picked recommendations for the current market environment:
- 8 stocks to buy
- 1 stock to short
- 1 inverse ETF to buy
- 2 bond ETFs to buy
All the stocks have been selected using the proven outperformance that comes from our POWR Ratings stock selection model which has done 4X better than the S&P 500 since 1999.
Now add in my 44 years of investing experience seeing bull markets...bear markets...and everything between. This helps me pick the right stocks and ETFs for the current environment.
If you are curious to learn more, and want to see my current 12 recommendations, then please click the link below to get started now.
Steve Reitmeister’s Trading Plan & Top 12 Recommendations >
Wishing you a world of investment success!
SPY shares were trading at $524.66 per share on Tuesday morning, up $10.78 (+2.10%). Year-to-date, SPY has declined -10.21%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
Stock Market Held Hostage StockNews.com
