We're only a few weeks into President Donald Trump's second term... And his administration is already playing a high-stakes geopolitical chess game on our northern and southern borders.
We're Watching a High-Stakes Chess Game
By Pete Carmasino, chief market strategist, Chaikin Analytics
We're only a few weeks into President Donald Trump's second term...
And his administration is already playing a high-stakes geopolitical chess game on our northern and southern borders.
The key pieces are the tariffs, of course.
But it's not just about trade. It's about reshaping the whole North American economy.
Trump's administration is taking a three-pronged approach. It's tackling...
1. Immigration control,
2. A fentanyl crackdown, and
3. A trade rebalancing.
Our neighbors are digging in their heels. But it looks like Trump is outmaneuvering them.
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As the chess game plays out, we'll continue to face periods of volatility in the markets.
We're seeing that now. The broad market S&P 500 Index is struggling to truly break above its recent highs. That's also true for the tech-heavy Nasdaq 100 Index.
But ultimately, I still expect investors like us to see a lot of upside.
Put simply, it doesn't matter how you feel about Trump. In the market, the results are what matter. And we're still in the early stages of this chess game.
So we should expect some short-term turbulence.
The markets are still adjusting to the new normal. But they're not falling off a cliff.
Don't sell everything you own and run for the exits. Rather, be ready to capitalize on opportunities...
You see, when the downside moves occur, you'll get chances to buy great stocks at better prices.
I'm keeping my eyes on industries poised to enjoy potential trade adjustments.
For now, software stands out as one of the best spots. Remember, that can mean the traditional software space, AI, and even the cybersecurity industry. We can choose from a lot of stocks.
In the Power Gauge, the SPDR FactSet Innovative Technology Fund (XITK) earns a "very bullish" rating right now. It's how we measure the "innovative tech" subsector.
And despite Trump's economic volatility and the AI drama we've seen in the news, this subsector is still going strong.
In fact, it's among the strongest subsectors by performance so far this year. It's up roughly 9% since the start of the year. And the Power Gauge makes it easy to see why...
Only four stocks in this fund earn a "bearish" or "very bearish" rating from the Power Gauge. But an incredible 52 are "bullish" or "very bullish."
Folks, this is just one example. But I hope it makes it clear that this market is still offering a lot of opportunity.
In the end, Trump's approach boils down to ensuring his vision for the long-term viability of our nation. By fixing these issues now, we can support lasting growth in the North American economy.
Stay tuned and sharp. Always be ready to profit from any changes in the economy.
Again, this isn't just a trade war. It's a strategic realignment of North American economic power.
That's going to create volatility... and opportunity.
Good investing,
Pete Carmasino
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
-0.56%
8
15
7
S&P 500
-0.32%
77
280
141
Nasdaq
+0.06%
30
53
17
Small Caps
-0.92%
397
1025
484
Bonds
-1.36%
— 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
Staples
+1.82%
Utilities
+1.1%
Communication
+0.94%
Information Technology
+0.7%
Industrials
+0.46%
Real Estate
-0.24%
Materials
-0.51%
Financial
-0.62%
Energy
-1.32%
Health Care
-1.77%
Discretionary
-2.37%
* * * *
Industry Focus
Insurance Services
11
34
8
Over the past 6 months, the Insurance subsector (KIE) has underperformed the S&P 500 by -3.82%. However, its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #9 of 21 subsectors and has moved down 1 slot over the past week.
Top Stocks
MKL
Markel Group Inc.
PLMR
Palomar Holdings, In
THG
The Hanover Insuranc
* * * *
Top Movers
Gainers
CVS
+14.95%
GNRC
+7.56%
GILD
+7.46%
INTC
+7.2%
EW
+6.92%
Losers
WAB
-9.06%
ANET
-6.16%
WAT
-5.77%
SW
-5.05%
CF
-4.58%
* * * *
Earnings Report
Earnings Surprises
HOOD Robinhood Markets, Inc.
Q4
$1.04
Beat by $0.52
CVS CVS Health Corporation
Q4
$1.19
Beat by $0.27
SW Smurfit Westrock Plc
Q4
$0.42
Missed by $-0.17
VRT Vertiv Holdings Co
Q4
$0.99
Beat by $0.17
KHC The Kraft Heinz Company
Q4
$0.84
Beat by $0.06
* * * *
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