Nick Hodge,
Publisher
June 17, 2025
We are going to get buying opportunities over the next two months that will allow us to position successfully for the balance of the year.
The first half of the year saw falling US economic growth — from above 2% GDP in Q4 2024 to -0.3% in Q1 2025.
The stock market did not like that slowdown as clearly evidenced by an S&P 500 that was down more than 17.5% year-to-date through the first week of April as many investors were liberated from their gains.
But despite tariff fears and talk of recession, we’re going to be back in positive territory for the remainder of 2025. Stocks have already begun pricing this in, now up 2.23% for the year as of the second week of June.
You can expect inflation to tick back up as well. The CRB Commodity Index bottom-ticked in April — commensurate with stock market lows for the year — at 280. It has since reversed to bullish by making higher highs and higher lows to break 300 this month.
Right on time, the inflation rate has started to tick back up as well with the May print coming in at 2.4%. Given rising commodity prices, we can expect it to be higher again in June.
Stocks generally like when the rate of change of growth and inflation are moving higher together. And that’s what we’re seeing now.
As I expressed in multiple issues earlier this year, the real threat to the economy and stock market was Trump doing what he said in terms of austerity, spending cuts, and dogged efficiency.
Instead, and as predicted, the DOGE has been sent to live on a farm in the country while the kids in Congress pass big, beautiful bills that will add billions more to our debts and deficits. The irony is it’s that very spending that will keep GDP positive and the US out of recession.
In the May issue we lightened up a bit on precious metals and related equities that had grown extremely overweight in our portfolio by locking in +30% gains on the iShares MSCI Global Silver and Metals Miners.
At the same time, I told you that “Silver exposure can now be had via the Sprott Silver Miners & Physical Silver ETF (NASDAQ: SLVR), which remains a buy under $23.50.” I added to that position in mid-May ahead of silver’s run to 13-year-high prices north of $36 per ounce that we’ve seen in recent weeks. And now that position is up more than 30% in the open portfolio.
My current positioning looks like this:
I am making other moves in preparation for a better second half of the year for stocks…
You just read the intro to the June issue of Foundational Profits. I went on to recommend selling two positions, including a Consumer Staple name for over 100% gains that we’ve held for the past year.
I also recommended four new equities for purchase that I expect to outperform the market in the second half of the year. To get them you need to be subscribed to Foundational Profits. You can see info on how to do that here.
Call it like you see it,
Nick Hodge
Publisher, Daily Profit Cycle