April 30, 2025
What You Need to Know Today:
Is the Powell Put back?
The S&P 500 gained more than 4% for this week. Some of that was the result of talk from the White House about possible tariff negotiations with China.As the week wore on, though, attention shifted from tariff talk to comments from Federal Reserve officials that seemed to suggest that the central bank might consider cutting interest rates as early as its June meeting if economic growth slowed. Yep, the Powell Put is back. In this scenario, bad earnings and bad economic news become good news because they push the Federal Reserve closer to cutting interest rates.
Saturday Night Quarterback says (on a Sunday), For the week ahead expect …
I expect more opinions and some additional data on when the Trump tariffs will hit U.S. and global economic growth. And how big the hit will be.
UnitedHealth badly misses revenue and earnings projections–drops 23%
UnitedHealth (UNH) fell 23.04% on Thursday after missing Wall Street estimates on both revenue and earnings. The company also revised downward its 2025 earnings per share guidance to a range of $26-$26.50 from an earlier projection of between $29.50-$30. The problem is the fast and extreme growth in Medicare Advantage, the version of Medicare run by private insurers that contract with Medicare. The federal government pays these insurers a fixed amount per enrollee to provide Medicare-covered benefits. More than half of eligible Medicare enrollees are now on an Advantage plan. In 2024, UnitedHealthcare boasted 9.4 million enrollees, or 29% of the total eligible population. By comparison, Humana (HUM) came in a distant second with 6 million, or about 18% of the population. CVS (CVS) reported 4.1 million, or 12%.
Last year was a bad one for the Medicare Advantage business.
Another sign of stress in the financial system
Now we’ve got other data showing the leveraged buyout market is under stress. The U.S. leveraged-loan market is on the cusp of its longest run without a deal launch since at least 2013, Bloomberg reports.
Trump: Powell’s “termination cannot come fast enough”
One day after Fed Chair Jerome Powell warned that the administration’s trade war was “highly likely” to spur a temporary rise in inflation with the potential for longer-lasting effects President Donald Trump blasted the Federal Reserve for not lowering interest rates and said its chair’s “termination cannot come fast enough.” “Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’” Trump wrote on Truth Social. Referring to interest rates, he added: “He should certainly lower them now. Powell’s termination cannot come fast enough!”
Please watch my new YouTube video: Quick Pick Amazon
Today’s Quick Pick is Amazon.com (AMZN)–despite the current tariff panic. While the stock is down due to the broad market sell-off and concerns over tariffs impacting its supply chain, I believe Amazon’s size and logistical power will help it mitigate these challenges. The company can pressure suppliers, adjust pricing algorithms, and shift sourcing to keep costs lower than competitors, potentially gaining an edge as inflation rises. Though these advantages may not be evident in the upcoming April earnings report, I expect Amazon to emerge stronger in the long term, making it a compelling buy once the market shifts from indiscriminate selling to evaluating winners and losers.
Special Report: “3 Strategies and 10 Picks for Juicy Returns in a Yield Drought”–first 6 picks
If you’re an investor looking for income, you’re facing what I’d call a Yield Drought. And this is no temporary dry spell. Things on the income investing front look they’ll get worse before they get better. Unless a financial crisis intervenes in 2025 to make everything else much worse and the yield story much better. Because, you see, there are two parts to the current Yield Drought.
Live Market Report (20 minute delay)
Moody’s warns on U.S. finances
Credit rating company, Moody’s Investors Service, one of the three big debt ratio companies, warned on Tuesday that President Donald Trump’s trade tariffs could hamper the country’s ability to cope with a growing debt pile and higher interest rates. The rating agency said that America’s “fiscal strength is on course for a continued multiyear decline”, having already “deteriorated further” since it assigned a negative outlook to America’s Aaa credit rating in November 2023.
Consumer confidence continues to fall–now at a 4 year low
U.S. consumer confidence fell in March to the lowest level in four years, according to the Conference Board’s survey.
The Conference Board’s gauge of confidence fell 7.2 points to 92.9. The median estimate in a Bloomberg survey of economists called for a reading of 94. A measure of expectations for the next six months dropped nearly 10 points to 65.2, the lowest in 12 years
More news likely to keep AI rally going in China–adding Alibaba to my portfolios
Today I added shares of Tencent (TCEHY) and the iShares China Large-Cap ETF (FXI) to my portfolios at least partly on the strength of China’s AI rally. Tomorrow, March 25, I’d adding shares of Alibaba (BABA) to my Jubak Picks and Volatility portfolios.
A new Trump tariff “plan”–every country that buys oil from Venezuela will pay a 25% tariff
President Donald Trump said on Monday that any country that buys oil or gas from Venezuela will pay a 25% tariff on exports to the United States.
This “secondary tariff” will take effect on April 2, the president announced in a Truth Social post.
Buying more Tencent ADRs for my portfolios
On Monday, March 24, I’m adding these Tencent ADRs (TCEHY) TO my Jubak Picks and Volatility Portfolios.
China stocks rallying on government stimulus plans–I’m buying iShares China FXI
Just because we’ve seen this page from the play book before and just because I’m skeptical about the long-term effects of this policy doesn’t mean I don’t want to own the China rally now. On Monday March 24, I’m adding the iShares China Large-Cap ETF (FXI) to my Perfect Five ETF Portfolio and to my Jubak Picks and Volatility portfolios. (In the Perfect Five ETF portfolio I’m replacing my India ETF with this China ETF.)
Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…
This week I expect the March lull before the April storm.
Huge volume today but not much movement
Just five minutes before Wall Street’s close, the Standard & Poor’s 500 erased a slide that earlier in the session exceeded 1%. The index closed up 0.08% on the day. The NASDAQ Composite added 0.52%. The CBOE S&P 500 Volatility Index (VIX) dropped 2.63% to 19.28. These relatively minor directional moves came despite huge volume.
Trump criticizes the Fed’s decision to hold interest rates steady
That didn’t take long. Wednesday afternoon the Federal Reserve decided to keep its benchmark interest rate steady–no rate cut. Wednesday night President Donald Trump renewed his call for the Federal Reserve to lower interest rates as he criticized the central bank’s decision. “The Fed would be MUCH better off CUTTING RATES as U.S.Tariffs start to transition (ease!) their way into the economy,” Trump wrote on Truth Social. “Do the right thing.” Trump added: “April 2nd is Liberation Day in America!!!” President Trump’s criticism of the Fed’s decision certainly isn’t a surprise.
Good news from the Fed today–central bank still sees two interest rate cuts in 2025
The Federal Reserve’s Open Market Committee surprised no one with today’s vote to keep the benchmark federal funds rate in a range of 4.25%-4.5%. The mild surprise came in the revisions to the Dot Plot projections. The Fed continued to pencil in two interest rate cuts for 2025. Some investors had feared that the Fed would show it has moved to projecting just one cut in 2025.
More tariffs, lots more tariffs, still on schedule forApril 2
The Washington Post is reporting today that White House aides are preparing new tariffs on most imports to be announced on April 2, laying the groundwork for an escalation in global tariffs that President Donald Trump has called “Liberation Day.”
Getting ahead of selling in this market is like playing Whac-a-mole–2 more sells
I’m selling Danaher (DHR) and RTX (RTX) out of my Jubak Picks and Dividend portfolios, respectively, in an attempt to get ahead of some of the likely fallout from policy moves by the Trump Administration. And in order to sit out as much of current market volatility as is possible.
Please watch my new YouTube video: Hot Money Moves Now Vix Call Options
Today’s Hot Money Moves NOW: Buy VIX Volatility Call Options. Toward the end of January, I bought VIX Call Options, hoping to make money as volatility increased in the market. I bought a VIX call with a strike of 20, and a VIX call with a strike of 26–both with May 21, 2025 expirations. Both of these buys were up about 40% before Friday’s snap-back rally. And looking at probable “events” I think volatility is going to increase in the second half of March. But this week we may see some optimism bring the VIX down and you may be able to buy more options on that future volatility at a temporarily depressed price. I would look to buy these options this week and hold for the next three weeks or so, through more tariff uncertainty in April and sell before the May 21 expiration. For more detail om my VIX options buys see the Volatility Portfolio on my subscription JubakAM.com site.
Luminar soars 27% today on YouTube video rave
Luminar Technologies (LAZR) surged on Monday after former NASA scientist Mark Rober test-drove a car equipped with the company’s lidar technology in a YouTube video and said it outperformed Tesla Inc.’s Autopilot feature.
Monday adding more VIX options on volatility after snap-back rally
Friday’s snap-back rally took a big bite out of the CBOE S&P 500 Volatility Index (VIX). The VIX dropped 11.72%, or 2.89, to 21.77. But the plunge in Call options on the VIX was even bigger with the VIX Call option with a strike price of 20 and an expiration of May 2025 falling 23.34% and the VIX Call option with a strike price of 26 and an expiration of May 2025 26.000 falling 31.34%. (I’m citing the action on these two options because they are the Calls that I own in my Volatility Portfolio.)
This is exactly the opportunity I flagged last week to add more volatility bets without paying too much after the run upon options prices that came to a screeching halt on Friday.
Saturday Night Quarterback says, For the week ahead expect…
I expect less drama than markets now fear from Wednesday’s meeting of the Federal Reserve’s interest-rate-setting Open Market Committee.
More bad news on consumer confidence and inflation expectations
A new survey released on Friday from the University of Michigan showed consumer sentiment falling 11% in the March survey as consumers in all age and income groups and of all political affiliations have turned more negative about the direction of the economy. Consumer...
Please watch my new YouTube video: Quick Pick Apple
Today’s Quick Pick is Apple (AAPL). This is a short term buy or, if you own it, a “get ready to sell.” Apple’s Worldwide Developers Conference happens in early May, and the stock usually gets a bounce from new product and technology announcements. This year we’re likely to hear more on AI. Apple’s stock hasn’t performed all that well lately, and I don’t want to hold the stock after the expected pop from the conference and new product releases in the fall. I worry about the long term choices the company is making. Apple has decided not to offer a low-price, affordable introductory iPhone as a gateway to their suite of products. They’ve effectively ceded the lower end of the market to other players–especially in China. They’ve also just announced that the AI add-ons to Siri they promised have been delayed and it’s unclear when they’ll be available. Apple is lagging in AI as other companies race ahead. We can expect disappointing sales in December–particularly out of China. I don’t want to hold on to the stock at the end of the year and I’m looking to sell on a bounce after the conference and new product launches in September.
That didn’t take long–snap-back rally arrives
A day after major indexes moved into a correction, stocks bounced back like, well, like a basketball after a Lebron James dunk, like a sling shock at Halloween, like, well, like stocks after hitting over-sold technical levels. The gains in stocks were, how you say, broad-based. The Standard & Poor’s 500 closed up 2.1%. The NADAQ Composite added 2.6% and the NASDAQ 100 rose 2.5%. The Dow Jones Industrial Average gained 1.7%. The MSCI World Index rose 1.8%. Bloomberg Magnificent 7 Total Return Index climbed 2.8%. The Russell 2000 small cap index was up 2.5%.
A 200% tariff on champagne? Here’s my solution to the impending crisis
President Donald Trump has threatened to impose a 200% tariff on wine, champagne and other alcoholic beverages from France and elsewhere in the European Union, if Brussels follows through with a tariff on American whiskey exports, a measure aimed at retaliating against Trump’s steel and aluminum tariffs that went into effect on Wednesday. What to do? This is serious. Life without champagne! Sacre bleu! We need a solution.
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