March 12, 2025
At the end of January I wrote that I believed earnings forecasts were THE primary factor to focus on in the stock markets and not tariffs. (Please see my January Update about tariffs topic.)
So far the pain during this sell-off is primarily being felt in tech stocks, especially those related to AI that had massive share price increases last year. The tech sell-off percentage thus far has been similar to what we experienced in June-August last year. Right now, there is little news except for the tariffs adding to the market turbulence with the vacuum of corp. earnings news. The focus on the next earnings season starts back up again in roughly two weeks. Currently I see the tail winds that have been driving stock gains in general remain: interest rates, earnings results & forecasts and cash flow. Do not think that means that I am just comfortable and fully invested. On the contrary, I am closely watching and assessing economic data amongst various reports and levels. So far, I can honestly say market action since November has not been outside what I was expecting. We have not seen anything yet beyond a normal profit taking correction though that does not mean the situation could not change to the negative. If so, I will surely make changes in the portfolios. From my focus on actual economic and financial data, not headlines, there remains the crossroads of data between the economy falling or growing that I’ve been seeing since 2022.
Unless you have been in a news vacuum during February, you heard a lot of fanfare about the Deep Seek AI bombshell, many wondered if Nvidia was old news. As my grandfather would say in response to something that seemed exaggerated while waving his hand dismissively, “Bahk!” Yeah, there isn’t a definition for that. When the news first hit, I went to my go to source for all things AI: Ben Thompson’s ‘Stratchery’ newsletter.
Suffice it to say, Nvidia is not old news in my opinion, though my disbelief in OpenAI and Anthropic has been vindicated by the creativity of Deep Seek. To me THE BIGGEST news from Deep Seek is that Chinese engineers actually invented technology, unlike prior tech improvements via theft or take-over, this was invented/developed. It shows how horribly lazy, and myopic many in the US tech sector became relying on the expanding cycle that more money was the only way. Many companies reported similar or increased levels of planned spending on the very chips and software for which Nvidia is known. Once the dust settles over the next quarter, I expect Nvidia to remain a, if not the, leader in AI along with a broadening group of leaders. There are many companies that offer attractive opportunities, are little or not at all impacted by tariffs and have good visibility of future revenue growth. Cyber security, digitization, AI Inferencing, and basic services (i.e. trash, water, pest control) remain my preferred themes in which to invest.
So I’ll repeat what I wrote in my January Update ‘Damn the Torpedoes’: “So, for the next two quarters do NOT get caught in daily ups and downs, as I believe the markets will overreact to good and bad news in the 2025 H1 as people attempt to glean any hint at future trends. With attractive rates on cash and volatility potential, I encourage keeping some extra cash available in portfolios to buy long-term potential amidst short-term panics.”
Thanks for the gumball IRS.
I want to make sure you are aware of the recent “gift” from the IRS: according to their site, www.IRS.gov tax filing deadline is May 1st instead of the traditional April 15th deadline for all Florida residents as well as residents in AK, AL, GA, NC, NM, SC, TN, VA, and WV, because of the various disasters and the extension for CA is October 15th and KY is Nov 3rd. If your address on file with the IRS was in one of the listed states to start 2024, the deadline is automatically extended by the IRS. Please check www.IRS.gov and/or with your tax professional to verify your actual situation.
Please Note: Opinions expressed are that of the author and are not endorsed by the named broker/dealer or its affiliates. All information herein has been prepared solely for informational purposes, and it is not an offer to buy, sell, or a solicitation of an offer to buy or sell any security or instrument to participate in any particular trading strategy. Past performance does not guarantee future results. Certain statements contained within are forward-looking statements including, but not limited to, statements that are predictions of future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Oxford Retirement Advisors is an independent firm with Securities and Advisory services offered through Madison Avenue Securities, LLC (“MAS”), member FINRA/SIPC and a Registered Investment Advisor. Oxford Retirement Advisors and MAS are not affiliated entities.
Opinions expressed are that of the author and are not endorsed by the named broker/dealer or its affiliates. All information herein has been prepared solely for informational purposes, and it is not an offer to buy, sell, or a solicitation of an to buy or sell any security or instrument to participate in any particular trading strategy. The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to see tax or legal advice from an independent professional advisor.
Certain statements contained within are forward-looking statements including, but not limited to, statements that are predictions of future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties.
The S&P 500 Index is a widely recognized index including a representative sample of 500 leading companies in leading sectors of the U.S. economy. Indexes are unmanaged and investors cannot invest directly into an index. Past performance does not guarantee future results.
Oxford Retirement Advisors is an independent firm. Securities and advisory services offered through Madison Avenue Securities, LLC (“MAS”), member FINRA/SIPC and a Registered Investment Advisor. Oxford Retirement Advisors and MAS are not affiliated entities.