Maley Market Strategy Podcast

The momentum in the stock market is strong, so it could make a new all-time high.  However, investors seem to be equating the fact that we're not going to get the worst-case scenario on the tariff issue...with the thought that the economy is going to see the best-case scenario.....Instead, the upside potential is smaller than the downside risk after the recent strong bounce off the April lows.

The agreement between the US and China on tariffs does lower the odds of recession.  However, there are still other reasons to be concerns about today's very expensive market.  That said, we do have some good picks in some names that should do well no matter which way the broad stock market goes over the coming weeks and months.

The reaction to the foundation for a trade agreement between the US and China is certainly positive.  However, there are still several very important headwinds from outside the tariff issue that remain intact...including higher long-term interest rates.  Given that the stock market has become extremely expensive again, this could/should mean that we'll still see plenty of volatility in the weeks a...

The fundamental outlook for the stock market is not strong enough to justify a further rally from current levels.  That said, the major averages are all testing key technical levels, so the negotiations with China this weekend should be very important for the stock market's next big move.

The economy is weakening and earnings are falling.  This is not good a tall for a stock market that is still very expensive.....The stock market cannot trade at 20x forward earnings (or even close to that) without major liquidity injections...and the Fed is signaling that they won't be providing those injections.

Even if Trump keeps "blinking" on the trade issue, a further decline in earnings estimates is unavoidable.  The trade issue will merely turn an inevitable deep correction...into a bear market. 

The stock market needed to go through a "reset process" even if the tariff issue never developed.  However, since it has developed, this "process" will be a more painful one.  Investors need to embrace this thought...instead of fighting it.

Our call for a deep correction in January has been spot on.  The market is now ripe for a sharp bounce, but the the longer-term outlook is complicated.  The tariff issue is not the only one creating headwinds for stocks.

Will we get a "buy the news rection" to the tariff announcement this week?  (What does "buy the news" mean?  We answer that question this week.)....No matter what happens with the tariff issue, earnings growth is not strong enough to create a return to a sustainable rally.

There is so much more going on with the recent stock market correction than just the tariff issue.  Therefore, the odds of further weakness before we the real bottom are quite high. 

The Fed just acknowledged that growth is going to be slower in 2025 and in 2026.  That is not good for a stock market that is still quite expensive...despite the initial positive reaction.

The tariff issue may have been a key catalyst for the recent stock market decline, but there are many other issues involved as well.  This is the beginning of a reset process that will pull stock prices down to a level that is more in-line with today's real fundamental outlook.  This process will be painful, but those who embrace it will profit quite nicely.

The recent swoon in the stock market is not just due to the tariff issue.  There are several headwinds, so there is more weakness to come.  The strategy should now be to sell the rallies, instead of buy the dips.  

Several new very important developments have put today's expensive stock market at a risk of a meaningful decline.  We'll see bounces along the way...maybe even sharp ones...but they will merely provide opportunities to raise some cash.  (Corrections are NORMAL, so do not fight them!)

In this week's episode, we discuss how the warning signals for the consumer are becoming much larger...and how this could have an important impact on the markets.  We also discuss why several key stocks that could benefit in this environment...AND whether Europe's outperforming stock market is worth chasing at these levels.

Trump's tariff threats are not empty threats.  They're coming and they'll impact the markets.  Also, our short-term trades are working exceptionally well.

The recent tariffs on Canada & Mexico were easy victories for the President.  The tariffs on China and the upcoming tariffs on Europe will be much tougher to navigate.  So, this issue is not going away.....When you combine this with decline of earnings estimates for 2025, the stock market could/should face some surprising and meaningful headwinds very soon.

In December, we had the Fed's change in tactics.  In January, DeepSeek changed the outlook for earnings.  Now, we have aggressive tariffs.  These changes creates significant risks for the stock market.

After another great year, the stock market's outlook is much less clear for 2025.  The new President's proposals seem positive for the economy, but today's expensive market needs much better earnings and lower interest rate or it will see a deep correction.