Wealth Watch Archives

December 4, 2025

Trump Accounts: How Your Newborn Just Became an Investor

First, what a magnanimous, generous gift from Michael and Susan Dell. A donation of 6.25 billion dollars through the vehicle of the new Trump accounts created in this year’s tax bill. It is one of the largest donations ever to go straight to Americans. Many of the details are still being hammered out, but your child may be eligible. You, your employer, and others can deposit money (within certain limits), and it grows tax-free as it would in an individual retirement account.

In this program, the U.S. Department of the Treasury will deposit $1,000 into investment accounts it sets up for American children born between Jan. 1, 2025, and Dec. 31, 2028. The Dells’ gift will use the “Trump Accounts” infrastructure to give $250 to each qualified child under 11.

Under the new law, “Trump Accounts” are available to any American child under 18 with a Social Security number. Account contributions must be invested in an index fund that tracks the overall stock market. When the children turn 18, they can withdraw the funds to put toward their education, to buy a home, or to start a business.

This is one of the best donations I have ever seen, and the Trump Accounts get a newborn invested from day one. They become invested in our markets and our country. Hurray for the Trump Accounts, and a big hurray and THANK YOU to Micheal and Susen Dell. This will change lives.

The markets are performing as expected after a pullback of about 5%. As we have said before, this period of consolidation was expected and warranted. Where will we close at year-end? I strongly believe above 7000 on the S&P 500. The S&P 500 broke above a short-term area of resistance and looks like it could be setting up a cup and handle pattern, which would be very positive if it breaks out.

The major indexes surged above their 50-day moving averages, rebounding on Fed rate-cut hopes and more. Leading stocks across a number of sectors showed strength. Google-parent Alphabet (GOOGL) and AI chip partner Broadcom (AVGO) were large-cap winners. The 10-year Treasury yield briefly undercut the 4% level. Bitcoin rebounded above $90,000, though it backed off Friday’s highs.

Several high-profile technology names are on the post-Thanksgiving earnings calendar for the coming week, including Snowflake (SNOW), which hasn’t pulled back much as it wages battle near its 10-week moving average. Snowflake is in major growth mode, along with fast-growing artificial intelligence player Credo Technology (CRDO), which reports Monday after the close.

November 17, 2025

Year-End Market Outlook: Navigating the Chop on the Road to S&P 7000

The HCM-BuyLine^® is positive, and all pullbacks should be considered buyable. Look for a little bit more chop over the next few weeks. There are only about 6 weeks left in the trading year, and we still see the S&P 500 closing above 7000.

The Invesco KBW Bank ETF (KBWB) is also forming a shallow base with a buy point of 80.04 for now. A sharp pullback earlier this year undercut the lows of a prior base, which served to reset the base count. The fund has risen by just over 18% so far this year, which means it is slightly outperforming the S&P 500. The fund aims to match the performance of the KBW Bank Index. This is a benchmark stock index for the banking sector. It is made up of large U.S. national money center banks, regional banks, and thrifts.

Vertiv (VRT) provides equipment and services for data centers; it manufactures power and thermal management devices, as well as hardware and software. On October 23rd the company announced a 46% jump in third-quarter profit, to 76 cents a share, thanks to the strong AI data center business. Revenue accelerated for a second straight quarter, up 19% to $2.07 billion. Gross margin hit 38%, the highest in at least four quarters. On July 30 the firm reported a 42% increase in EPS to 95 cents as revenue climbed 35% to $2.64 billion. It also guided full-year earnings of $3.80 a share on sales of $10 billion, which was better than analysts expected at the time.

(HWM) Howmet Aerospace provides advanced engineering solutions for the aerospace and transportation industries. It operates in four segments: Engine Products, Fastening Systems, Engineered Structures and Forged Wheels. The company shows a consistent record of earnings and revenue growth. Boeing is a big customer. Annual earnings estimates look solid, with full-year profit expected to rise 35% this year to $3.63 a share and by a further 19% next year.

November 7, 2025

Dust Off Your Shopping List, BuyLine Still Says ‘Go’

The markets have been pulling back over the last week or so, which looks to be no more than a normal period of consolidation. The S&P 500 and the Nasdaq are both sitting firmly on the 50-day moving average. Pullbacks should be considered buyable as long as the HCM-BuyLine® is positive, so get out your buy list. The markets have now pulled back to the point that they are oversold. Expect the market to continue to consolidate, find its footing, and move higher into year-end.

Investors are trying to process several big factors. The government shutdown, crypto deleveraging, lack of employment and inflation data, and the newly elected mayor of New York City all have people scratching their head.

An area to look for opportunities is airlines that are under pressure with the government shutdown. Flights are delayed and cancelled, but this will fix itself soon enough. Another area that looks attractive at current levels is Bitcoin. The Bitcoin ETF (IBIT) has recently sold off and has a lot of liquidity, which makes it easy to make quick moves. Also look at the Technology sector ETF (XLK), as it could be a good way to play the recent pullback.

October 30, 2025

Is Walmart Sexy Now? How AI Is Turning ‘Boring’ Stocks Into Blockbusters

I know most, if not everyone who reads this is an investor in equities as they should be. But everyone needs to add as much as possible to equities over the coming years. Even with market volatility, and even if we have another bear market. Every advisor should be telling their clients to add on every pullback. And please tell your kids, relatives, friends and anyone who will listen that if they do not invest in equities, the odds of them falling way behind in their retirement and standard of living is going to be devastating. Why? Because AI is here. Unemployment is starting to go up organically, even as the economy is steaming ahead, and corporate profits are racing higher.

If you have not read the news, Amazon just laid off 14,000 employees because AI has made it more efficient and cost effective. Basically, AI is doing the same job as 14,000 employees were at a fraction of the cost. As we all know, an employee is the largest cost to a company, so the fewer you have, the better. This is great for corporate earnings and great for stockholders, but not so great for the unemployed. UPS lad off 34,000 and Salesforce did 4,000. Goldman Sachs laid off 1,300 employees, which is about 4% of their employees. And the list of companies announcing layoffs is growing every day.

One could do a case study on Walmart. Over the years I have found Walmart to be a bit boring, but not anymore. They’re using AI in a very efficient manner, reducing overhead – meaning employees – and producing outstanding earnings. Look at that chart of (WMT) – that’s as pretty as it gets.

What if over 2-5 years from now unemployment is much higher, but companies are throwing off a 6, 8, 10, or even a 12% dividend due to massive profits? If you have not been heavily investing, start today. For those who are not invested, let’s hope they haven’t missed the boat.

September 26, 2025

The Bears Were Wrong: Earnings Season’s Triumphant Return

As seasonality is set to exit its most bearish month of the year, we see September as a win. The market has pulled back, which should not be unexpected with how many days the index moved higher. Fortunately, Chairman Powell’s comments did not totally shock the market, except when he gave investment advice about the value of stocks. Can his tenure end fast enough? The HCM-BuyLine® is positive, and we think any pullback should be seen as a buying opportunity until the trend changes. We are bullish going into the last quarter of the year, and we think 6700 or higher is within reason.

Hims & Hers Health (HIMS) has pulled back and looks to be buyable, along with TD Synnex Corp (SNX), which is breaking out and looks to be gaining momentum. Bitcoin has also pulled back, and we think investors should be looking to buy or add to their position. iShares has a nice Bitcoin ETF (IBIT). If you do not want to buy the coins themselves, the IBIT ETF is highly liquid, and we think it has a lot of bang for its buck.

Stocks have so far not followed the historically weak seasonal trends often seen in September. Instead, the S&P 500 has risen almost 3% month-to-date, with renewed leadership from the growth sectors.

Earnings season has also been strong enough to ease some tariff concerns. Analysts, which slashed estimates following the Liberation Day tariff announcements, were proven to be too bearish. With 98% of companies reporting, the S&P 500’s beat rate has jumped to 81%. Assuming the result is maintained, it will mark the index’s best reading since Q1 2024. Analysts responded by turning more positive and raising 3^rd and 4^th quarter estimates.

September 15, 2025

Don’t Fear the Dip: Our Case for Buying Any Pullback

Historically, September and October have not been very good months for the market, but so far in September it is holding up very well. We might expect some volatility over the next 6 weeks, but any pullback should be seen as buyable. I think the last quarter of 2025 could be very strong for the S&P 500, which has already passed 6500, and should reach our prediction of going over 6700 and possibly as high as 7000 by year-end. The markets could have an incredible 5–10-year run. If you’re not heavily invested, we think you should start buying ASAP.

AMD and Lam Research look ready to move higher.

An underwhelming employment report secures a September Fed rate cut. Non-farm payrolls increased by 22,000 in August, below expectations of 75,000 and our forecast of 66,000. There was a modest downward revision of 21,000 to the prior two months, in line with our expectations. June now shows a loss of 13,000 jobs, instead of an initial print of 147,000, the first monthly job loss since December 2020. Additionally, the average workweek was unchanged from a downwardly revised 34.2 hours. Average hourly earnings rose 0.3%, matching expectations, but the y/y change eased to 3.7%, below expectations of 3.8%. The unemployment rate ticked up to 4.3%, matching the consensus and our expectation.

This all but secures a 25 bp rate cut at the September FOMC meeting and makes a series of cuts more likely. We have long since argued that a 4.3% unemployment rate would trigger Fed action. We now have that. We have also argued for three rate cuts for most of this year. One 25 bp reduction at each of the next three Fed meetings would fulfill that expectation.

In the establishment survey, private payrolls increased by 38,000 and have averaged just 29,000 in the past three months, the fewest in this expansion. It compares very unfavorably to triple-digit monthly job growth earlier this year, highlighting the dramatic slowdown in job creation amid DOGE, tariffs, deportations, and other policy changes. The trend is consistent with slower overall economic growth, although not a recession at this time.

August 25, 2025

Is the Fed Listening? Powell’s Dovish Shift Says “Yes!”

The markets are in a solid uptrend, and pullbacks should be considered buyable. Some of the skittishness we saw in markets last week could arguably be attributed to anticipation of Powell’s remarks at the end of the week. But, after a few days of mostly selling, Fed Chair Powell came out a little dovish.

Powell said shifting risks may warrant adjusting the Central Bank’s policy stance. Many investors liked that the Chair is paying greater attention to the labor market, which is much needed because of the recent downward revisions to the jobs report.

“Overall, while the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both supply of and demand for workers,” he said. “This unusual situation suggests that downside risks to employment are rising. If those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.”

New home sales dipped 0.6% in July to a better-than-expected 652,000 unit annual rate, as the prior month was revised up. Even so, new home sales have remained stuck in a range since mid-2022, as high mortgage rates and affordability constraints continue to weigh on demand. A potential Fed rate cut in September could be a catalyst for home sales growth, if indeed it leads to lower bond yields and mortgage rates.

The S&P Global flash U.S. composite PMI unexpectedly increased (from an already-high reading) in August to 55.4, its best level this year.

The upside surprise came mostly from the manufacturing sector, which unexpectedly bounced back into expansion mode, jumping to 53.3, a 39-month high. Almost all components and individual indexes jumped, including large gains in new orders (including export orders), output, and employment. Finished goods inventories grew at the fastest pace on record, as businesses expressed worry about future supply conditions amid government policy and tariff risks.

The services sector also grew robustly, albeit slightly less so, as the PM edged down to 55.4. New business (including exports) rose to the highest this year, while employment climbed to a seven-month high.

August 5, 2025

The Job Market is Cooling. The Fed Needs to Drop Rates. It’s That Simple.

The analysts and economists who are out crying wolf that the sky is going to fall are just about always wrong. Will we have pullbacks and volatility? Of course, markets like to correct and then move higher. But there is $7.4 trillion in money market accounts waiting for any drop in rates, and we should see some of that money moving into equities. The HCM-BuyLine^® is positive, and pullbacks should be seen as buying opportunities.

Just as we wrote about last week, the markets like to take what I call “a little Spanish Pause” every now and then. Periods of consolidation are normal and healthy for stocks to move higher.

US equities finished higher in a fairly quiet Monday trading session, with the S&P largely erasing Friday’s selloff (but remaining less than 1% below record highs). Big tech was mostly higher, with NVDA and META among the notable gainers; but market breadth was solidly positive, and the equal-weight S&P only slightly lagged the cap-weighted index.

The Fed is late. They should have dropped rates at the last meeting, and two board members dissented, which is very uncommon. A September rate cut is highly probable in our opinion.

On Friday, we learned that U.S. employers created just 73,000 jobs in July. After May and June’s numbers were revised lower, we learned the three-month moving average was a paltry 35,000. That means the labor market, comprising 159.5 million jobs, is growing by just 0.02% per month.

“Friday’s jobs report, with its below-consensus July reading and very large May and June revisions, reflects a US economy closer to a tipping point than markets or the Fed previously thought,” Nicholas Colas, co-founder of DataTrek Research, wrote on Monday. “Monthly job growth that hovers around zero for a few months in a row is a classic early recession indicator.” Job creation is arguably the most important indicator of economic growth. And it’s not the only metric that’s cooling.

One of the bigger drags to growth has been personal consumption expenditures, which account for 69% of GDP. Real personal consumption peaked in April, and growth has mostly been flat this year. Come on Fed chair Powell, read the data, it is time to drop rates.

August 1, 2025

Resting, Not Retreating – Is the Next Leg Up in Sight?

The market has started off the last three trading days moving higher only to give up the gains. This is a common consolidation process, and we could see a modest pullback. If we do get a pullback, it should be considered buyable. Markets like to take what I call a “Spanish pause” and trade sideways-to-down a bit until it builds up enough steam to break out.

The Fed held rates steady, which was expected, with two fed members voting to drop rates. This is very uncommon. We have started to see a lot of pushback on holding rates steady and not dropping them. We think the Fed has to walk back its inflation views modestly, while the labor market conviction on strength has diminished.

Real GDP rebounded at a solid 3.0% annualized rate in Q2, the most in nearly a year and above the consensus estimate of 2.5%. It followed a 0.5% annualized decline in Q1, as growth in both quarters was distorted by tariffs. Looking through the noise, real GDP growth averaged a 1.25% annualized rate in 2025, which is about half the growth rate in 2024.

ADP private payrolls rose a bigger-than-expected 104,000 in July, rebounding from the prior month’s 23,000 decline. The increase comes amid reduced uncertainty over tariffs and other government policies, keeping labor demand in positive territory. Average payrolls growth so far this year, however, has been 84,000 per month, down from an average of 144,000 per month last year. The trend is consistent with slower economic growth this year, but no recession.

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