Don’t look now, but the fear-mongers are in a world of hurt. All those memes and negative articles have run into a brick wall called corporate earnings.

Each day this week, high-profile names have posted results and offered guidance that belie the end-of-the-world scenario.

Growth is staging a rally for the ages while safe havens are stumbling. When studying sectors and stocks, remember to measure valuations not against the market but rather against historical ranges. Many stocks touted as safe zones were exposed because they were too expensive.

Chips & Data Centers

I know the experts keep saying the Artificial Intelligence (AI) trade has peaked and data centers have stalled, but the industry isn’t letting up on its financial commitments and projects.

Chips roar back because they are the center of the universe and will be for some time to come.

Hard data will undoubtedly get weaker, which explains the continued pressure on the first-quarter Gross Domestic Product (GDP) using the Atlanta Fed GDPNow estimate.

Yesterday, we learned that existing home sales declined 5.9% month-to-month (the highest monthly decline since November 2022) and 2.4% from a year ago. As a result, residential investment decreased to -0.1% from 0.5% in the Atlanta Fed GDP.

I know the tariffs will have a limited impact, but the media will play it up as worse than the global shutdown associated with COVID-19. It won’t close, so the real question is how much damage is built into the market and is it too much, especially for individual names?

I think so.

Less Fear

The Volatility Index (VIX) has gone from above 50 to below 30 in the blink of an eye, which is a very positive development.

A Zweig Breadth Thrust (ZBT) has been triggered, and while I’m not an expert, it has a pretty good track record.

Wall Street has become bearish, hedge funds have huge, short positions, and the curmudgeon set has been enjoying the spotlight. They will lay it on thick, hoping for a selloff over the weekend.

Ignore the noise.

Today’s Session

Major indices opened relatively flat this morning, as investors weigh the latest earnings and await the final April Michigan Consumer Sentiment Report, which will be released at 10 AM.

The Ten Year Treasury Yield (TNX) is down 2.9 basis points and breaking the 4.3% level.

Comments

The Fed is 1 of about 137 “independent “ agencies created by Congress. They are all part of the executive branch of government. The constitution gives all executive power to the president. He can fire anyone in the executive branch. I wish he would fire Powell and have the Supreme Court back Trump so this charade of independence is broken. Tom Woodall on 4/25/2025 9:16:21 AM

Tweet

 

Home | Products & Services | Education | In The Media | Help | About Us | Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.