by Jason Bodner
May 13, 2025
My bold take: Donald Trump is the world’s greatest entertainer.
Love him or loathe him, the Commander in Chief takes up as much media oxygen as he can.
Every. Single. Day.
Case in point: There is a new Pope: Robert Prevost, Pope Leo XIV.
Even after that stunning announcement for the Catholic world (estimated 1.4-billion people) was made public, Trump (leading 340-million Americans, one-fourth as many people) still stole some spotlight.
A satire publication, The Onion, took a seeming shot at Trump in their depiction of the event:
All across the Internet, the new Pope’s spotlight was constantly being overshadowed by the President.
Trump gives the world something to talk, argue, and debate about – and many things to agonize over. But that’s his M.O.: He uses confusion and conflict as a vehicle for the world to focus on the issues he wants them to focus on. Often his comments are a distraction, and he is a master at it. He drags everyone into his fight. I’m not here to take sides. What I am here to do is analyze markets. And markets are speaking:
To me, markets are saying, “We will come out fine on the other side. The trade war will all be resolved.”
Here’s why:
As one of the lone bulls during the recent meltdown, I fore-casted a market low on April 1st. I apologize for being so off the bottom, which occurred a week later, on April 8th. Since then, the SPY (the S&P 500 tracking ETF) showed a peak rally of 14.2% on May 2nd. Not too shabby, considering the market reaction to Trump’s Rose Garden Liberation Day announcement was so chaotic. I went back to look at all the times since 1993 (when SPY began trading) that the same thing happened: up 14%+ trough to peak within 18-trading days. It occurred 27-times in 32-years. The resulting numbers speak for themselves:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
I find it fascinating that the same level of swift recovery mostly took place during the most fragile of markets and in times of gloomiest global sentiment, like in 2002, the Great Financial Crisis, and COVID-19, which accounted for most of the occurrences. Markets were higher within one month and rose 36.4% on average after a year and were up 26 of 27-times. And this is after a rally of 14% already took place!
Naturally, this is great news looking forward. But I also noticed something else in the other market data:
- First off, the Big Money Index (BMI) is rising. This is largely due to immense early April outflows rolling-off. Any inflows will lift the ratio as heavy-outflows are behind us:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
- We can see below that inflows haven’t hit sizeable levels yet. What I see is encouraging, though. The “green-shoots” are akin to sprouts after a forest-fire. Markets are similar, in that they need to reset for new growth. We just witnessed a massive burn. This may not be a popular take, but the small-inflow signals for stocks and ETFs indicate the beginning of a bullish-trend:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
- Next, we see elevated trading-volumes returning to normal levels after the huge spike during those heavy-outflows. This is yet another early indication of money moving into risk assets:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
- As we dig deeper, we start to see the earliest indication of a shifting tide. Looking at sector ranks, we see the same old discouraging picture: Defensive-sectors are at the top of the charts. Utilities and Staples still seem to be safe havens. But if we compare the April 8th lows to a month later, I see something exciting. Technology and Discretionary are two growth-heavy sectors that supercharge bull markets. They rose substantially in the rankings, while Staples, a defensive sector, fell:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
While it’s no raging bull-market just yet, this is a potential kick-start to what I believe is about to come. And when you take the data I showed you above – after the 14% rally – the case grows even stronger.
Looking at individual sectors, we can see that all 11-sectors staged a recovery from their lows. Only Health Care has reversed lower. The other sectors are holding their rebounds. We also see an echo of the rotation I discussed above: Staples see outflows while Technology and Discretionary see some modest inflows:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Since the beginning of May, there are inflows in Technology, Health Care (also outflows), Industrials, Materials, and even some Discretionary stocks:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
This is positive, and I can also tell by looking at the type of stocks seeing inflows (without naming them all) that investors are starting to accumulate high-quality stocks.
Trump told the world to buy stocks. Whether or not it’s right for him to be an investment advisor, it’s safe to say he knows a thing or two about business. A trade deal was announced with the UK. Markets liked the news. Tariffs of 25% are now 10%. I lost count, but I thought there were over 70-countries named on Liberation Day, and I think that’s how this will go for almost every country… yes, including China.
Trump asks for 100 and settles on 50. That’s his M.O.
All the while, it’s certainly entertaining, but some people can’t stand the horror and anxiety that it brings.
I am confident that markets are headed higher. If you wish to concentrate on the negative, that’s up to you. I see the positive. Ed Seykota famously said: “Everybody gets what they want from the market.”
All content above represents the opinion of Jason Bodner of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Imports “Dumped” in America Cause Price Cuts, Not Inflation
Income Mail by Bryan Perry
It’s Time to Invest in the U.S. Power Grid’s Inevitable Growth
Growth Mail by Gary Alexander
Inflation is up 10-Fold Since LBJ Debased Our Coinage in 1965
Global Mail by Ivan Martchev
My Take on the Best-Case Market Scenario
Sector Spotlight by Jason Bodner
Don’t Let the World’s Greatest Entertainer Derail You
View Full Archive
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Jason Bodner
MARKETMAIL EDITOR FOR SECTOR SPOTLIGHT
Jason Bodner writes Sector Spotlight in the weekly Marketmail publication and has authored several white papers for the company. He is also Co-Founder of Macro Analytics for Professionals which produces proprietary equity accumulation and distribution research for its clients. Previously, Mr. Bodner served as Director of European Equity Derivatives for Cantor Fitzgerald Europe in London, then moved to the role of Head of Equity Derivatives North America for the same company in New York. He also served as S.V.P. Equity Derivatives for Jefferies, LLC. He received a B.S. in business administration in 1996, with honors, from Skidmore College as a member of the Periclean Honors Society. All content of “Sector Spotlight” represents the opinion of Jason Bodner
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