Back to where the market started... Hard advice in times of turmoil... The rebound slowed today... Watching the bond market again... A potential 'surprise'... Don't forget about AI... Enter the pitch room...
The S&P 500 is now flat for the year...
As we touched on yesterday, the S&P 500 Index is up around 18% since President Donald Trump's 90-day tariff pause began. This softening stance has helped the S&P 500 recover from Trump's April 2 "Liberation Day" tariff announcement.
Our Stansberry's Investment Advisory lead editor Whitney Tilson added more context on the market in his free daily newsletter today, while pointing out his (correct) advice last month for "staying the course" amid market volatility...
[T]he below post on social platform X earlier this week made me laugh. It's from Ben Carlson – the author of the popular financial blog A Wealth of Common Sense.
If you had not only not looked at your portfolio this year, but didn't read the news at all, you'd think we'd had a boring start to the year!
Here's Carlson's post:
I (Corey McLaughlin) wouldn't say it has been a "boring year" given the market and world events over the past four months. But the point about the roundabout nature of things is a good one.
The S&P 500 fell 20% on an intraday basis from February 19 to April 8 but has now rallied back after Trump's tariff "pause." Trump acknowledged that falling stocks and a "queasy" bond market, with yields falling quick due to growth concerns, played a role in his decision.
Hindsight is always 20/20, of course, but if you need some evidence for not panicking during market volatility – as we urged back in early April when "Liberation Day" roiled the markets – this is it.
The end result is that if you fell asleep on New Year's Eve and didn't wake up until recently (maybe your New Year's party was really wild), you wouldn't think much had happened to your portfolio while you were out.
This is an important reminder if you're a long-term investor...
As Whitney wrote earlier today, "It can be hard to do nothing during times of turmoil, so it often helps not to look at your portfolio."
It's also worth remembering that great buying opportunities – in high-quality, cash-efficient businesses – often present themselves during times of widespread market panic.
Now, on the other hand, the S&P 500 has gained 18% in short order. So it would be wise to temper short-term expectations moving ahead, even with the historic odds favoring good returns for U.S. stocks over the longer run following periods of extreme volatility (like we've seen recently).
In April, our friend and colleague Jeff Havenstein pointed out that in the two days after Liberation Day, we saw the third-worst two-day stretch for the S&P 500 – down about 10% – since the turn of the century. But historically, there were still reasons to be optimistic. Jeff wrote on April 9 in the free Health & Wealth Bulletin newsletter...
This isn't the first time we've seen markets fall steeply over a two-day period. It has happened quite a few times. And the good news is that, according to history, markets are usually significantly higher both a year later and two years later.
The following table comes from banking company Truist Financial. It looked at the 10 worst two-day stretches for the market since 1950 (not including the recent tariff drawdown).
There was Black Monday, a number of instances during the great financial crisis, and two more during the COVID-19 bear market. Take a look...
In the months after these sudden drops, results vary. But on average, stocks were up 2% three months later and nearly 6% six months later.
When you look further out, it gets more encouraging. In all of these situations, the S&P 500 was higher one and two years later. The average gains were 27% and 40%, respectively.
For long-term investors, there are still reasons to be optimistic. You'll just have to stomach the short-term volatility.
Jeff wrote this before the world knew about Trump's tariff pause. So kudos to Jeff for the wise words.
The rebound slowed today...
The major U.S. stock indexes were "mixed" for the first time in a while.
The benchmark S&P 500 was little changed, and the tech-heavy Nasdaq Composite Index was up 0.7%, while the Dow Jones Industrial Average was down 0.2%, and the small-cap Russell 2000 Index was down 0.8%.
Beneath the surface, there was also some relative weakness to be found. The equal-weight S&P 500 was down about 0.6% for the day and most (361) of the S&P 500 stocks were down.
But mega-cap stocks like Alphabet (GOOGL), Nvidia (NVDA), and Tesla (TSLA) were up around 4%, boosting the market-cap-weighted S&P 500.
We're also keeping an eye on the bond market, as longer-term bond yields are moving higher once more. The 10-year yield is now around 4.5% for the first time since February. The 30-year yield is near 5%, its highest level since January.
Bond yields reflect a combination of growth and inflation expectations. So bets on "what's next" have been driving this trend higher since mid-April.
You see, tax and spending policies are taking center stage in Washington, D.C. soon... We'll also soon see another debt-ceiling "debate" cycle (assuredly to result in a higher debt limit)... and there's still tariff uncertainty, despite announced "deals." These can all contribute to inflationary forces.
All this plays into the interest-rate environment moving ahead and the parlor game of "what will the Federal Reserve do next?" when it comes to cutting its benchmark bank lending rate and juicing the economy – or not.
Federal-funds futures traders, even with a "better than expected" inflation reading in April's consumer price index (published yesterday), don't think the Fed will lower interest rates again until its September meeting.
Meanwhile, one 'surprise' to watch for...
While tariffs and potential trade deals have gotten most of the market attention as of late, there's another story brewing this week that could be a catalyst for the market in the near term.
Representatives from Ukraine and Russia are supposed to meet in Turkey in what would be the first direct peace talks between the two nations since the early part of the war in Ukraine in 2022.
The big question is if Russian President Vladimir Putin, who proposed these negotiations on Sunday, will be there, and if anything substantial will be accomplished. Talks brokered by the U.S. over for the past several months haven't materialized in an end to the war.
Trump, on a multiday tour of the Middle East, said earlier this week that he would be open to traveling to Turkey tomorrow to join the talks in person "if I thought it would be helpful" in what sounded like a carrot to encourage Putin to attend.
An end to the multiyear war could remove a few layers of overhanging uncertainty (relative to energy supplies in Europe and inflation) for the global economy. A resolution would likely be welcomed in the markets.
Conversely, putting Putin and Ukrainian President Volodymyr Zelenskyy in a room together, even if that happens, doesn't mean an agreement will be reached. So stay tuned.
Another big story that's playing out...
These days, it seems like artificial intelligence ("AI") is everywhere. So you'd be forgiven for having "AI fatigue." But AI is still in its early days as an economic driver and the opportunities for early investments still abound.
Whitney has his eyes on this story, as he wrote in his daily newsletter last week...
I continue to follow developments in the artificial-intelligence ("AI") space closely because I believe it will be as impactful and transformative as the Internet...
And like the Internet, stocks associated with AI will go through booms and busts that I want to help my readers take advantage of.
Next Wednesday, May 21, Whitney is joining his friend Jeff Brown in a free live event to share the details on a development in the AI story that could spawn a "new class" of AI companies.
Whitney says five different investments could "absolutely soar this year" – potentially doubling your money – while the "old world" stocks of the past decade crash even further.
You can register for this free event here.
Enter the 'pitch room'...
As we said, Whitney will be joined by Jeff Brown, a legend in Silicon Valley and a big deal in the newsletter publishing industry. He's the founder and chief investment analyst of our corporate affiliate Brownstone Research. As Whitney wrote today...
Jeff recommended bitcoin and Nvidia (NVDA) before they went on to soar by thousands of percent... He has advised the U.S. government... And he has gotten into 18 tech deals that each returned 1,000%.
So I'm excited to be joining him for an event like this. Regular readers know that I love going on camera with the brightest minds in the business.
Starting next month, Jeff says a new type of "super chip" company is going to go mainstream, and it will usher in a new wave of investment opportunities that you'll want to understand in the next few weeks.
So, next Wednesday, Whitney and Jeff have agreed to hold a "pitch room" where readers of our business – like you – can learn the full details.
Just for signing up for the event, you'll get access to a special report that includes one free recommendation. Then next week when you tune in, you'll hear two more free recommendations and more details about this story. Click here to sign up now.
On this week's Stansberry Investor Hour, Dan Ferris and I were joined by Vitaliy Katsenelson, chief investment officer of Investment Management Associates and author of the acclaimed "The Intellectual Investor" newsletter.
We talked about a wide range of subjects... from his thoughts on Warren Buffett's retirement and being at the most recent Berkshire Hathaway meeting... to investor psychology... the new book he's writing... and how he achieves "work-life balance" while managing money.
Watch the full interview here... To hear the full audio version of this week's Stansberry Investor Hour, visit InvestorHour.com or find the show wherever you listen to your podcasts.
New 52-week highs (as of 5/13/25): Alpha Architect 1-3 Month Box Fund (BOXX), Dimensional International Small Cap Value Fund (DISV), EQT (EQT), iShares MSCI Italy Fund (EWI), SPDR Euro STOXX 50 Fund (FEZ), iShares U.S. Aerospace & Defense Fund (ITA), Construction Partners (ROAD), and Vanguard FTSE Europe Fund (VGK).
In today's mailbag, feedback on yesterday's edition, which discussed "normal" April inflation data and tariffs... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"This statement is largely incorrect:
Those were more "normal" inflation numbers. And importantly, they didn't show notable immediate price increases due to tariffs, which would have shown up in this April data.
"Tariffs (especially from Asian locations) take AT LEAST – 8-12 weeks (shipping time + safety stock depletion) to show up on invoices to distributors, Tier I automotive and integrators in Medical/Aerospace/Consumer goods. Since the announcement and escalation to 145% for China the companies I consult with and supply materials to warehouses are JUST NOW depleting safety stock and passing tariffs into the higher levels of the supply chain. Those companies will revise pricing in late May/June and show up as inflation in July/Aug.
"The costs have not shown up yet, they are still rolling through the supply chain." – Subscriber Greg R.
Corey McLaughlin comment: Thanks for the note, Greg, and for sharing what you're seeing. This is why we wrote that no "immediate" price increases due to tariffs showed up in the April numbers. We're going to keep watch on the impacts of tariffs (on prices, consumer spending, jobs, etc.) moving ahead. Let us know what you hear.
All the best,
Corey McLaughlin
Baltimore, Maryland
May 14, 2025
Join for free. See how over a million people are taking control of their wealth…
