Making Hay Monday - June 9th, 2025
Those Dreaded Words... Again.
Friday’s official non-farm payroll report was better than expected, at least superficially. This pushed the U.S. stock market yet closer to an all-time high. However, job cuts in the ultra-critical service sector are surging at a rate unseen over the last 30 years, including during the Great Recession. Also lost in today’s enthusiasm for the jobs release is that, once again, revisions to prior months were decidedly downward. These adjustments lowered the original totals for March and April by 138,000 versus a supposed increase, subject to future revisions, of 139,000 for May. In other words, even assuming no future reductions to this morning’s report, a mere 1,000 jobs were created over the last three months. It’s not an exaggeration to say this reflects a very flaccid labor market, a reality that most investors are overlooking… for now.
It’s been anyone’s guess how Trump’s tariff wager will play out in the latter half of 2025, but markets as dynamic as those found in most of Europe and Asia’s stronger countries will doubtless adjust and find ways to offset short-term losses en route to an agreeable trade posture with these United States.
In the text accompanying the above chart that, the CNBC author suggested that, “Adding some foreign stocks to your portfolio can help guarantee at least some exposure to whichever side is performing better over the many years you’re likely to invest.” We’d be hard-pressed to challenge the sensibility of that advice, but would also suggest examining market sectors key to American industrial interests and apportioning any investment moves accordingly. Trump is pushing for a massive resurgence of industrial might throughout the next few years; thus, hitching your dollar-drawn wagons to an index vs crucial commodities key to domestic production might be more constraining than profitable. Hell, with every economic ball up in the air at the moment, this could be a good time to make a brave and broad wager on the U.S.’s purported manufacturing renaissance.
“One of the greatest pieces of economic wisdom is to know what you do not know.” -John Kenneth Galbraith
Those Dreaded Words… Again
For some odd reason, nothing seems to rev up a certain cohort of our readers as much as when I write “take profits”. Admittedly, I should make it clear I’m not advising a full sale, certainly not of anyone’s entire stock portfolio. Even when it comes to individual securities or asset classes that we’ve previously highlighted with a positive bias, I almost always advise a trim versus an outright sale.
Accordingly, please note that the following are former Haymaker focus names on which you may want to consider paring back, if you had acquired them at the time of my initial coverage. (As usual, do your own research and also consider your personal tax situation; realizing gains within an IRA is a very tax-efficient way to reduce equity exposure, a tactic that many seem to overlook.)
What’s precipitating this message is the extremely vigorous rally that has happened since “Liberation Day”. You may recall that at the time I suggested a more accurate title was “Obliteration Day”. But that was way back two months ago when panic was driving the markets.
While we did discuss reasons to believe a rally was probable back then – pointing out the Volatility Index (VIX) had spiked to a very bullish level, the Fear/Greed indicator was also at an extreme anxiety level and that the Zweig Super Breadth Thrust metric was triggered – I wasn’t exactly a raging bull. My main tout during the worst of the sell-off, or shortly thereafter, was of energy stocks. Some of those have had big moves, especially Noble (NE), but most of them are still dead in the water.
However, a number of my older focus names have had some great runs that have pushed them up to a level where any of you who did pick them up might want to do some gain harvesting. (Sound better than “profit taking”?)
Here’s a list of names that qualify, with some more detailed comments to follow: