Weekly Market Bites

THE YOUNG INVESTOR

becoming a great investor one mistake a time

Welcome to your weekly market wrap-up.

Grab a cup of coffee, get comfortable, and catch up on financial markets.

I’ve been doing the reading and scrolling, to bring you the most relevant updates.

Before we dive-in, take a look at:

MARKETS YEAR-TO-DATE

bull market or bear market?

The VIX closed above 50 last week for the first time since April 2020.

Looking at data going back to 1990, this has always been followed by positive returns 1 year out.

As we can see by the sea of green:

Last week, the stock market had one of the best returns in history. Thanks to the 90-day tariff pause was announced.

So is the worst behind us?

Big reminder: The biggest up days don’t usually happen during bull markets, but right in the middle of a crisis 🙃 

Just look at the biggest days in S&P 500 history. 1929, 1933, 2008…

So it looks and feels like we are not out of the woods. Yet.

I think this captures the mood of investors right now:

Nobody out there has the answer of what comes next.

And if you think your crazy for thinking one day its all clear and then the next that we are headed lower.

You're not.

The management team over at United Airlines feels you:

THE MAN OF THE HOUR

Every crisis has that guy.

The one who’s been warning about it for years and years. While everyone else rolled their eyes.

Fast forward to today: now he’s everywhere. Bloomberg, CNBC, NBC, YouTube, X… you name it.

In this crisis? RAY DALIO is that guy.

Thanks to his long-running predictions about a major clash between the U.S. and China. And all the financial fallout, implications for US reserve currency status, that would follow:

And as the crisis builds, people start turning wisdom to prophecy:

Cue the dire warnings:

And while Dalio is a billionaire and a genius, he’s no prophet. Because I remember all his missed calls over the years:

So don’t take these things too seriously and make any big portfolio moves based on what anybody says on TV.

I really laughed at this take that nails it perfectly 🤣 🤣 

“Too Late” Jerome Powell

Fed Chairman (Daddy JPow) found himself in Trump’s shit list this week. Getting roasted on social media for not cutting interest rates.

Especially after Powell’s not-so-optimistic take on the economy, the stock market tanked on Wednesday...

Which earned him this reaction from the White House:

😁 😁 

Some juicy points from this weeks meeting:

On bailing out the market:

Translation: Don't expect a Fed "rescue" if stocks crash, markets are on their own. Unless the fall threatens the broader economy or financial system.

On Tariffs and Inflation:

Translation: Trump’s tariffs could push prices higher.

And higher inflation = makes it harder for the Fed to cut rates.

On Inflation vs Employment Challenges:

Translation:
The Fed has two jobs: keep inflation low and keep employment strong. It might become impossible to do both at the same time, forcing tough choices.

On Federal Spending and Debt:

Translation:
Trimming a few government programs isn’t going to solve anything. The real budget monster is Social Security, Medicare, and the big mandatory programs.

Does that mean DOGE is a PR stunt?

GOLD continues to climb

A sign that investors and central banks are still nervous? Gold continues to push higher every week.

So much money has begun to pile into gold, the move YTD might be overextended:

But looking at the long-term the move could persist.

Historically, over the past 80 years there have been only two major gold bull markets.

1) Prices went up 20x from August 1970 through January 1980

2) Prices increased 7x from 2000 to 2011.

So gold might just stay in its one way road up:

It’s even starting to get some jealous vibes from the crypto bros:

INTERESTING CHARTS of the week

Over the past month, a big narrative has been building:

That the Trump Administration wants a slowdown (even a recession?) to help bring down U.S. bond yields. Lower yields = cheaper refinancing US debt.

3D chess ♟️♟️♟️

Except... that plan doesn’t really add up:

Meanwhile, one part of the supposed 3D chess is happening:

The U.S. dollar is having its worst start to a year since 2005.

Lastly, for a brief moment this week Hermès overtook LVMH as the most valuable luxury group in the world:

Also: if you’re still saying "Her-meese" like me. Learn how to pronounce Hermès 🤣🤣

@gstaadguy

Reply to @fatherkels Lesson 2: Hermès #Education #Gstaad #Hermes #Swiss

PARTING WISDOM

from the mind of RICHARD FEYNMAN:

The man behind the QUOTE → Nobel prize winning quantum physicist and curious soul. Richard Feynman made science playful. Bongo drummer, and legendary explainer. He is remembered for turning complex ideas about the universe into something fun to be discovered.

thanks for reading and have a great weekend,

Al Atencio 🦉