September 5, 2025

 

(SKEPTICAL INVESTORS MAY SEE THE MARKETS TREND HIGHER)

 

September 5, 2025

 

Hello everyone

What’s next for the markets?

More upside ahead?

One hundred days have passed since the S&P500 reached its post “liberation day” closing low. 

So, how would you describe the gains since then: incredible, astounding, amazing, eye-watering, irrational, annoying.    I could go on, but you get the picture.

The index is up 29% inside that time frame.  Since 1950, there have been just four instances in which the S&P500 has seen a larger return over a 100-day rolling period, according to several investment bank analysts. 

It is no surprise to anyone to find the tech sector in the lead during this time.  Over the past 100 days, the S&P500 tech sector has rallied more than 48% as investors have bought into the AI trade.  Communication services and consumer discretionary stocks are also up more than 30% during the same period.

Spurring this recovery along is the expectation of Federal Reserve rate cuts, and some progress – albeit turbulent – on the global trade front.

Challenges are staring at the markets, but thus far, the market has overcome or bypassed every obstacle in its way.

Carson Group’s Ryan Detrick, as well as Tom Lee, from Fundstrat, investment banks, UBS, & Goldman Sachs (GS) and Jeremy Seigal all argue the market can move higher.

Detrick notes that the S&P500 averages 8.1% gain six months after a strong 100-day performance.  One year out, that average increase expands to 12.9%.

 

AMAZON (AMZN)

The stock surged strongly on Thursday – around 3% - making it one of the S&P 500’s best-performing stocks of the day.

Over the past month, the stock has rebounded around 10%.  Several catalysts are responsible for this:

# Its relationship with the rapidly growing Anthropic – an artificial intelligence startup backed by the e-commerce giant.

# expansion of its same-day grocery delivery offerings.

# newly minted deal for its satellite internet business.

Barclays sees a deep gold mine in Amazon’s deep-rooted relationship with Anthropic.  The start-up trains its flagship generative AI Claude models primarily on Amazon Web Services, using Amazon’s Trainium and Inferentia chips for training and inference, respectively.

Some analysts believe Amazon could see significant upside in the fourth quarter.  Anthropic could be pre-training its Claude 5 model by then, which would contribute to AWS growth.

I expect many of you made some good money (or are making good profits, if you are still holding these) on the AMZN options I recommended in early June, when the stock was sitting at $205.71. 

AMZN 2015/225 with Oct. 17 expiry

and

AMZN 210/220 with Oct 17 expiry

I was even more aggressive in my personal account and took out a 220/230 option spread trade.

Took profits.  On to the next trade.

THE TRAJECTORY OF GOLD

Gold at $4,000/ounce could be a reality by 2026.

Uncertainty and macro events are driving gold prices:

Trump’s actions are threatening Fed independence, and as Goldman analysts note, this could result in higher inflation, lower stock and long-dated bond prices, not to mention an erosion of the U.S. dollar’s status as the global reserve currency.

Gold futures gained 4.9% from Trump’s nomination of Stephen Miran on August 7 to fill a vacancy on the Federal Reserve Board.  And the shiny metal gained 5.8% after Trump threatened to fire Fed Governor Lisa Cook on August 22 through to Tuesday.

Trump has made it clear that he wants to consolidate a majority on the Fed board so he can lower interest rates.

 

MY CORNER

Wallaby with joey in my front yard.

And a lone kookaburra sitting on a fence post.

 

 

 

 

Cheers

Jacquie