Folks, last week I told readers that... The next few months will see a tug-of-war between a strong economy and the shifting sands of U.S. monetary, fiscal, and tariff policies.
The next few months will see a tug-of-war between a strong economy and the shifting sands of U.S. monetary, fiscal, and tariff policies. That will challenge the resolve of this bull market.
We're seeing that play out in real time.
The broad market turned down at the end of 2024. And it struggled to make new highs for weeks.
But now, that's changing...
As measured by the SPDR S&P 500 Fund (SPY), the broad market moved into "bullish" territory in the Power Gauge toward the end of last week. And it finally hit new highs recently.
A similar story is playing out in the tech-heavy Nasdaq 100 Index. In the Power Gauge, we measure it with the Invesco QQQ Trust (QQQ). And QQQ earns a "bullish" rating right now.
This is a major change. It means that more of the biggest companies in the market are "bullish"... and that stocks look poised to move higher.
Wall Street titan Marc Chaikin predicted last year's bull run when everybody was expecting a recession. He also warned folks about the Magnificent Seven – six months before they lost $1 trillion in a global sell-off. Now he's sounding the alarm on what's coming NEXT for the stock market, based on a signal with 100% historical accuracy across more than 80 years of historical data. Click here for details (includes a free recommendation).
Starting with the S&P 500 Index, we see considerable renewed strength.
I'm particularly focused on the strong stock performance from companies like Amazon (AMZN), Costco Wholesale (COST), and Walmart (WMT).
Both Costco and Walmart have outperformed the broad market since the start of the year. Meanwhile, Amazon has underperformed the S&P 500 only by a couple percentage points.
But taken as a whole, it's obvious that the economy hasn't broken the power of the American consumer.
Despite that, there's still a lot of dark spots in the broad market. And the Power Gauge reveals that...
After the slight dip yesterday, SPY currently earns a "neutral+" rating in our system. And right now, the fund holds 110 stocks with "bearish" and "very bearish" ratings. And it holds 84 stocks rated "bullish" or "very bullish."
So more of the fund's holdings are in "bearish" territory than in "bullish" territory.
Premium consumer conglomerates are suffering. Specifically, I'm looking at companies like Procter & Gamble (PG) and Mondelez (MDLZ).
Both hold "very bearish" ratings from the Power Gauge. This tells us what we already know.
Consumers haven't stopped spending. But we're seeing some belt tightening.
We saw that play out recently in another consumer giant's fourth-quarter earnings report...
Year over year, McDonald's (MCD) saw same-store sales in the U.S. fall 1.4% in the quarter. That's the company's worst performance since the COVID-19 pandemic collapse.
Meanwhile, in-store traffic increased.
This makes sense. McDonald's aggressively raised prices over the past few years.
Now, it has gone back to its core principle – value. And consumers are taking advantage of that.
It means that more people are going to the fast-food chain... but they're spending less.
If McDonald's is a microcosm of the economy, I believe we'll see this story play out repeatedly.
Consumers are still spending. But after years of high inflation, they're now looking for deals. And they're forcing companies to offer them.
That means we'll likely see dips in growth across the market. But as prices and buying patterns reset, we'll return to growth.
Put simply, Wall Street took full advantage of inflation. Companies took 10 steps forward on pricing.
Now, they're walking one or two steps back. But that doesn't mean we're done seeing growth...
There are still plenty of "bullish" opportunities in the market. The strong ratings for the S&P 500 and Nasdaq 100 in the Power Gauge prove that.
Good investing,
Marc Chaikin
P.S. When it comes to opportunities in the market, I have my eye on a specific group of stocks in particular...
These are some of the biggest potential winners of the next several years... by far. And without them in your arsenal, I think you'll be sorely unprepared for what comes next in the markets.
In a special presentation, I share all the details on how to position yourself. Check it out here.
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
-0.96%
7
18
5
S&P 500
-0.42%
84
304
110
Nasdaq
-0.42%
29
60
11
Small Caps
-0.96%
390
1059
454
Bonds
+0.37%
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bearish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Energy
+3.51%
Utilities
+1.03%
Information Technology
+0.94%
Real Estate
+0.83%
Health Care
+0.57%
Industrials
-0.02%
Communication
-0.21%
Staples
-0.23%
Materials
-0.5%
Financial
-0.6%
Discretionary
-1.24%
* * * *
Industry Focus
Regional Banking Services
40
90
11
Over the past 6 months, the Regional Banking subsector (KRE) has outperformed the S&P 500 by +6.18%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #5 of 21 subsectors and has moved up 1 slot over the past week.
Top Stocks
BRKL
Brookline Bancorp, I
BPOP
Popular, Inc.
ASB
Associated Banc-Corp
* * * *
Top Movers
Gainers
HAS
+12.95%
BAX
+8.5%
LKQ
+5.96%
SJM
+4.15%
TXN
+3.89%
Losers
EPAM
-12.8%
AXON
-8.7%
RCL
-7.62%
WMT
-6.53%
MRNA
-6.04%
* * * *
Earnings Report
Earnings Surprises
LYV Live Nation Entertainment, Inc.
Q4
$1.39
Beat by $2.42
NEM Newmont Corporation
Q4
$1.40
Beat by $0.37
XYZ Block, Inc.
Q4
$0.71
Missed by $-0.16
BKNG Booking Holdings Inc.
Q4
$41.55
Beat by $5.46
PODD Insulet Corporation
Q4
$1.15
Beat by $0.13
* * * *
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