My Stock/Market Alert is an event driven brief about a stock OR the market when noteworthy action occurs. Today’s alert is about the market sell-off on recession fears.
Expect the frequency of my Stock/Market Alert notes to be consistent with meaningful moves in a specific stock held by BAM Portfolios or the stock market in general.
Today I heard a stock market analyst say, “There is no place to hide.” That was the first time I had heard that in years. Also, for the first time in years, the Nasdaq index fell 4% today. Neither of those has happened since 2022.
Today’s market sell-off piled on to weakness that began with a dramatic shift in market action just a little over 2-weeks ago. I wrote a client Stock/Market Alert about the market’s weakness last Monday, noting the toll Trump’s tariff talks were taking on investor sentiment. The severe drop in the Nasdaq and other highly-valued growth stocks today began over the weekend. In a Fox News interview that aired Sunday, President Trump declined to rule out a recession this year, saying “There is a period of transition” that will eventually pay off for the economy. So, last night’s futures market flashed a down opening across the board for today’s opening. Selling pressures compounded as the session ensued with leading growth stocks suffering sharp losses. Besides the seemingly hopeless quote on no place to hide, today also delivered a sense of capitulation and a level of uncertainty that is feeding the “growth scare”. Fueling fears of a slowing economy, today Goldman Sachs downgraded its economic outlook and cut its GDP outlook for 2025 to 1.7% from 2.4% and noted that “trade policy assumptions have become considerably more adverse” since the start of the year. See the graph below reflecting today’s close for the major indices.
The market’s major indices don’t express the damage done to many individual stocks. Most, especially in the growth sector, have fallen much more. Tesla stock, for example, plunged over 15% today and has crashed nearly 45% year-to-date.
Investor sentiment has rapidly flipped from FOMO to FOBE (fear of missing out to fear of being in). FOBE is what inevitably sparks bull markets. So, keeping an eye on increasing pessimism and investor fear which leads to investor sentiment is helpful for a reliable contrarian market indicator. Notice the Market Volatility index in the image above. It soared today. The “Fear Gauge” indicates negative investor sentiment and implies heightened market volatility. Now is the time to pay attention not just to what the economic data is and what companies say there earnings and outlook are, but to how the market reacts to the news. This week’s calendar is full of both. This could send markets on a wild ride. Calm investors can rely on their rational thinking and investment strategy to optimally guide them. Only one of the two things that happed today for the first time since 2022 is true: the Nasdaq was down 4%. The “There is no place to hide” statement is not true.
Blackhawk Wealth Advisors is the parent corporation of Equity Research & Portfolio Evaluation and Blackhawk Asset Management. It’s Chief Investment Officer is John J. Gardner. John is a Certified Financial Planner (CFP®) and Certified Portfolio Manager (CPM®)
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Blackhawk Asset Management
At BAM, we take the research we obtain from ERPE and utilize it to manage our clients’ assets. Our founder, John Gardner, CFP®, CPM®, offers high net worth investors experienced investment portfolio management based on a disciplined methodology. John is one of the nation's approximately 400 Certified Portfolio Managers and has managed billions of dollars in equity portfolios over his professional career since 1984. He has created four effective, proprietary portfolios: Thematic Growth, Strategic Income, Diversified Value, and Global Opportunity, which have helped clients prosper.
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Equity Research & Portfolio Evaluation
Equity Research & Portfolio Evaluation (ERPE) utilizes its propietary approach in analyzing investments. Its proven success researching equities is based on a blend of fundamental and technical analysis. ERPE's time-tested Top 10 Tenets guide the investment process to achieve Portfolio Optimization: This is through minimizing risk without sacrificing return.
