CWS Market Review – June 6, 2025
“Lost in a gloom of uninspired research.” – William Wordsworth
Remember how tariffs and a trade war were going to push the U.S. economy into a recession? It was only two months ago that the S&P 500 crashed 10.5% in two days.
How times have changed. The S&P 500 just wrapped up its best May in 35 years. The Volatility Index is at a 10-week low, and it nearly dipped below 17. In April, it hit 60.
On Wednesday, the S&P 500 closed at a three-month high. The index is above its 50- and 200-day moving averages. After a small dip on Thursday, the S&P 500 is now less than 3.5% from a new all-time high.
The odds of a recession have withered. At Polymarket, where investors can bet on real world events, the odds of a recession reached 66% on May 1. Now the odds are down to 27%. In retrospect, the whole tariff panic seems bizarre, but it wasn’t pleasant at the time.
The May jobs report is due out later this morning. In fact, you’ll probably have already seen it by the time you’re reading this. This week, we also had two preliminary employment reports, and the results were somewhat disappointing.
On Wednesday, the ADP report on private payrolls said that only 37,000 private-sector jobs were created last month. That was the lowest total in more than two years. Wall Street had been expecting a gain of 130,000 jobs.
Then on Thursday, the initial-jobless-claims report surged to 247,000. That’s the highest since October. I should caution you that these data tend to bounce around a lot. These are sluggish numbers, but nothing to worry about just yet.
On our Buy List, we had an earnings dud this week with SAIC. The defense contractor missed earnings by 20 cents per share. Despite the drop, I still like SAIC. The good news is that it stood by its full-year guidance. SAIC is a steady grower that’s trading for less than 11 times earnings. I’ll have all the details in a bit.
Overall, our Buy List stocks continue to do well. Rollins, the pest-control people, just made another new high. In less than two months, Amphenol is up close to 60% for us. The fiber-optics stock just hit another new high.
Last week, I told you about Heico’s earnings report. The shares gapped up and have continued to rise. Same with Intuit. Since April 8, the TurboTax stock is up more than 40% for us.
Later on, I’ll preview next week’s earnings report from Adobe. I’m expecting another earnings beat. But first, let’s look SAIC’s earnings report and why Wall Street has it wrong on them.