The Maley Report Podcast

Lower tariffs with China Don't Solve All the Problems

The agreement between the US and China on tariffs does lower the odds of recession.  However, there are still other reasons to be concerns about today's very expensive market.  That said, we do have some good picks in some names that should do well no matter which way the broad stock market goes over the coming weeks and months.

Has the China Trade Agreement Really Removed ALL of the Headwinds?

The reaction to the foundation for a trade agreement between the US and China is certainly positive.  However, there are still several very important headwinds from outside the tariff issue that remain intact...including higher long-term interest rates.  Given that the stock market has become extremely expensive again, this could/should mean that we'll still see plenty of volatility in the weeks and months ahead.

The Stock Market Stands at a KEY Technical Juncture

The fundamental outlook for the stock market is not strong enough to justify a further rally from current levels.  That said, the major averages are all testing key technical levels, so the negotiations with China this weekend should be very important for the stock market's next big move.

Slower economic growth is bearish for a (still) expensive stock market. (Duh)

The economy is weakening and earnings are falling.  This is not good a tall for a stock market that is still very expensive.....The stock market cannot trade at 20x forward earnings (or even close to that) without major liquidity injections...and the Fed is signaling that they won't be providing those injections.

A significant decline in the earnings outlook is unavoidable

Even if Trump keeps "blinking" on the trade issue, a further decline in earnings estimates is unavoidable.  The trade issue will merely turn an inevitable deep correction...into a bear market. 

The Market's "Rest Process" is Far From Over

The stock market needed to go through a "reset process" even if the tariff issue never developed.  However, since it has developed, this "process" will be a more painful one.  Investors need to embrace this thought...instead of fighting it.

It's Not 1987, But Investor Still Need To Be VERY Nimble.

Our call for a deep correction in January has been spot on.  The market is now ripe for a sharp bounce, but the the longer-term outlook is complicated.  The tariff issue is not the only one creating headwinds for stocks.

Tariffs? Lower earnings growth is the real problem for stocks.

Will we get a "buy the news rection" to the tariff announcement this week?  (What does "buy the news" mean?  We answer that question this week.)....No matter what happens with the tariff issue, earnings growth is not strong enough to create a return to a sustainable rally.

Expensive Markets Never Bottom After Just a 10% Correction

There is so much more going on with the recent stock market correction than just the tariff issue.  Therefore, the odds of further weakness before we the real bottom are quite high. 

The Initial Reactions To Fed Announcements are Frequently Wrong

The Fed just acknowledged that growth is going to be slower in 2025 and in 2026.  That is not good for a stock market that is still quite expensive...despite the initial positive reaction.