Things you need to know
- S&P pushes toward the next millennium.
- Policy NOT profits drove the action in healthcare.
- Dollar Down, Gold UP ‘exponentially’
- Tech names are ‘exploding higher’….Oh boy….
- Try the Champagne Chicken
Wake up… it’s Wednesday — and there is a lot to discuss.
First — stocks advanced again on Tuesday, with the S&P 500 continuing to build momentum as it charges toward a new millennium. If futures are any indication, that milestone likely gets tagged shortly after the open. S&P futures are up about 22 points this morning, which means not only do we kiss 7,000, but there’s a very real chance we blast right through it before the opening bell even stops ringing. It’s exciting stuff — but let’s take a step back and review what drove the action yesterday.
The overall tone of earnings so far has been mostly constructive. 80% of the firms that have reported have beaten on the top and bottom lines. Yesterday – a majority of companies that reported – across a range of sectors – beat expectations and, more importantly, delivered guidance suggesting demand is holding up better than expected…. particularly across tech, industrials, and defense. That strength helped support both the S&P 500 and the Nasdaq.
A high-profile disappointment (policy related) from UnitedHealth left that stock down 19%, and it created outsized headline noise in the healthcare sector and dragged on the Dow. And to be clear, the disappointment was not the earnings report itself — it was the policy overlay. UnitedHealth’s actual results were largely in line with expectations. What shocked the market was the forward-looking policy risk tied to Medicare Advantage reimbursement rates and regulatory uncertainty, which forced investors to reprice future margins and growth — not reassess current operating performance.
That repricing spilled across the entire sector: healthcare was down roughly 1.7%, CVS fell about 14%, Humana dropped more than 20%, Elevance slid 14%, and Molina was down roughly 7½%.
I can’t say it enough…. the “disappointments” were policy-driven not earnings driven.
At the end of the day – the Dow lost 408 pts, but the S&P added 28, and the Nasdaq rose 215, while the Russell added 7, the Transports gained 25, and the Equal-Weight S&P lost 12 while The Mag 7 added 304 pts.
Economic data was mostly in line yesterday, with one notable exception: Consumer Confidence, which plunged nearly 10 points to 84.5, well below expectations of 91 and sharply lower than last month’s upwardly revised 94.2. At first glance, which may feel confusing after Friday’s University of Michigan sentiment survey, which rose more than expected. So, which is it — is the consumer feeling better or worse?
Let me sort that out, because these two surveys don’t measure the same thing, even though it sounds like they do. They’re telling different parts of the same story. Inflation expectations are easing and consumers feel better about where things are headed (think future) — that’s what sentiment is telling us…. But day-to-day costs, job uncertainty, and ongoing policy noise are still weighing on confidence right now (think present). In short, consumers are more hopeful about the future than they are comfortable in the present — and that actually fits perfectly with where we are in the cycle. Capisce?
The dollar — which has been a hot topic of late — continued its decline yesterday, falling about 1.3% to 95.77, before stabilizing overnight and trading modestly higher this morning around 96.18. The move has fueled speculation that the U.S. dollar may be at the start of a longer-term decline, after Trump told the press he did not believe the currency’s weakness was “excessive.” That comment was interpreted as a policy signal, triggering another policy-driven move known as the debasement trade.
When policymakers signal they’re comfortable with a weaker dollar — often to support exports and economic growth — investors take that as a green light to reduce exposure to cash and rotate toward assets that can’t be printed. That’s why money flows into gold, commodities, real assets, and companies with real pricing power.
As I noted yesterday – the dollar is down 12.6% since last February…. going from 110 to 96.11 this morning. A look at the long-term dollar chart suggests that we should find support at 95…. Should that fail to hold – then the real next support of the dollar is down at 90 or another 6% from here.
Now, Gold is up 93% since last February, while the dollar is down 12.6% and if the dollar continues to weaken, precious metals should remain well bid. But remember – gold is about confidence in the dollar. The dollar’s decline matters far less than why it’s declining. If the dollar weakens due to slower economic growth, gold tends to respond in a more measured, linear fashion. If it weakens on policy signals — where markets sense tolerance for a weaker dollar – then gold moves exponentially. And that exponential move is exactly what we’ve witnessed over the past year, suggesting the market is interpreting recent dollar weakness as policy driven. And if that is the case -then the dollar would be expected to decline further and that only means Gold is not stopping yet.
This morning – Gold is up $78 at $5,259, but that is down from its high of $5,311. Continues to feel ‘exponential’ to me.
Ok – let’s discuss the tech earnings last night…STX and TXN – because this is important. Seagate (STX) delivered a textbook beat-and-raise quarter, with results and guidance confirming that AI-driven data-center storage demand is very real and accelerating — pushing the stock to fresh highs in the after-hours session. This morning it is quoted up $41 or 11% at $412.
Texas Instruments (TXN), on the other hand, slightly missed the headline numbers, but the tone of the call and forward guidance pointed to stabilization across industrial and automotive demand, reinforcing the idea that parts of the semiconductor cycle are bottoming even if the recovery isn’t uniform. TXN is quoted up $18 or 9.5% in the pre-mkt. Bottom line: not all beats look the same, not all misses matter — and the market is rewarding visibility and forward momentum.
This morning – we heard from ASML and they crushed it….and the headline says it all…. ‘Record Orders SMASH Estimates as AI Spurs Demand’. The stock is quoted up $100 at $1,550.
And this sets the tone for today…. MSFT, META & TSLA all report after the bell…. For Meta, investors are focused on ad revenue growth, user engagement, and whether AI is materially improving monetization. For Tesla, while the long-term narrative is about AI, autonomy, energy, and robotics, this quarter still trades on autos — specifically vehicle margins, pricing, and free cash flow — which ultimately determine the earnings floor. And for Microsoft, it’s all about Azure growth, AI monetization, and margin discipline, as investors look for proof that massive AI investment is translating into profitable, scalable revenue.
In addition – we will hear from GD, EAT, ADP, T, APH, VFC, GLW, ELV, DHR….
Bonds sold off yesterday… TLT down 0.6% and TLH down 0.4%, The 10-year sits at 4.24% and the 30-year at 4.86%.
Oil is trading at $62.30.
U.S. futures are UP…. — Dow +15, S&P up 22, Nasdaq up 216, Russell up 12. The VIX remains complacent at 16.26. Below all 3 trendlines.
The S&P closed at 6,978 up 28 pts – after trading as high as 6,988. If nothing changes – the S&P will slice thru 7000 like a ‘hot knife thru butta’…..And we are off into a new millennium.
Buckle up.
Call me at 561-931-0190 for a no-obligation portfolio review. Let me assess whether the risk in your portfolio actually matches your tolerance — because this works both ways: you may be taking too much risk, or you may not be taking enough to meet your goals.
Take good care,
Sources: Bloomberg, CNBC, Reuters, Wall Street Journal
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The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.
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Breakout the Champagne! 7000 here come!
Chicken Breasts in Champagne Cream
This is a classic dish, easy to prepare, presents beautifully on the plate on a bed of sautéed spinach will leave your guests wondering – How you did it.
Start with skinless pounded chicken breasts – dredge in seasoned flour – (S&P). After you have dusted all the breasts – set aside.
On medium heat melt 3/4 stick of butter and splash of olive oil in a large sauté pan. When almost sizzling – yet not burning…. add the breasts and sauté for about 4 / 5 mins. At this point – turn the breasts over – add about 1 1/2 cups of champagne and sauté for about 10 mins more.
Next add 3/4 cup of heavy cream (or lite cream if you must), chopped Italian parsley and a bit of rosemary powder and continue cooking until it thickens up.
While this is cooking – sauté some fresh spinach in garlic and oil and then make a bed on each plate. When the chicken is done – transfer the breasts to individual plates and top with the champagne cream sauce.
A nice mixed green salad garnished with cherry tomatoes; red onion & cucumber dressed with a champagne vinaigrette finishes off this meal. Choose a lighter bodied red or even a chilled white to complete the presentation.
Buon Appetito.