Weekly Market Bites

end of week markets update

1) Uncertainty is the name of the game right now.

Stocks are stuck below key levels, economic signals are mixed, and everyone’s trying to figure out if we’re in a bull, a bear, or just in for more of a long chop.

Here’s a summary of markets year-to-date:

2) Life below the 200:

For the last couple of weeks both the S&P500 and NASDAQ indexes have been below their 200-day moving averages.

If a stock or index is above that average, the trend is generally positive. If it’s below, it’s at higher risk losing momentum and heading lower.

Investors use the 200 SMA as a quick gut-check: Is this thing heading in the right direction or not.

Common Wall Street wisdom goes: “Nothing good happens below the 200-day moving average”

And that’s exactly where we are at:

Both indexes tried to rally since last week back above. But mid-week both stopped right at the 200-day.

A rejection at the 200-day SMA means the price tried to break above a key level but failed. It signals weakness and often suggests the downtrend isn’t over yet. Traders see it as a warning that buyers are losing steam.

I know a lot of you are thinking about your own portfolio. Wondering what happens if the market continues lower and considering potential changes.

A couple of points: Technical signals like the 200 SMA are pretty important but they are used by traders or active investors.

For long term investors, its good to be informed. But not to act on this.

The time to build a strategy for what to do when your portfolio suffers a drop isn’t when stuffs going down in real time. It’s during peacetime when you draw up a plan.

My experience: Selling when you get nervous = the worst plan you could come up with.

3) Zooming out a bit on what’s happened across multiple assets and what its telling us: (credit: Bob Elliot)

U.S. stocks: Back to pre-election levels.

The 10-year yield: Also around pre-election levels.

The U.S. dollar: Gave back its post-election gains.

BTC: has given up a good amount of the post election rally, but is still higher. Possibly reflecting the expected looser regulatory environment ahead.

U.S. growth expectations: Starting to come down.

In summary: U.S. markets have given back the post-election hype.

But they are still not really pricing a recession or meaningful slowdown from the Trump admins. Which have yet to be fully rolled out.

One of the best takes I have read for where we might be at in 2025:

4) Are we going lower or higher?

Warren Pies (@13F Research) points out that dips to -10% happen fast, but getting from -10% to -15% (if we go there at all)? Could take a while to find out.

So we might be stuck chopping around here for a couple of months.

5) The good news: Portfolio diversification is doing what its supposed to do.

International Equity diversification is working ✅:

Bonds (which crashed with high inflation last time in 2022) are working ✅:

Safe havens like Gold are working ✅ 

charts

Berkshire Hathaway is really kicking ass in 2025. Its beating the S&P500 by 20% YTD - one of the biggest margins in a long time:

The Trump administration announced this week 25% tariffs on imported cars.

Take a look at where major car brands produce their US sold cars:

Although, even if a car is 100% manufactured in the US, any foreign made parts would still be tariffed.

And finally, some parting wisdom