What is the market outlook and what is our corresponding trading plan? Expect continued volatility until there is more transparency and consistency in markets. That’s why I continue to only be 50% invested at this time. Casey’s General Stores Inc. (CASY) is one winning trade here, highlights Steve Reitmeister, editor of Zen Investor.
The current 50% odds of recession are fairly high. Academics note the average recession has started when only 40% of prognosticators predict that outcome. That is kind of a red mark on the report card for Economists and Market Strategists as that is a highly inaccurate track record. Not helping matters is that we were pretty much at this level of certainty of a recession in 2022, which did not end up being the case after all.
Knowing this weak track record...and the ever evolving “Art of the Deal” negotiations from the Trump Administration...I have to straddle the “50% odds of recession/bear market” camp as well. That means I could easily see trade talks going on for too long. That continued uncertainty would further hurt consumer/business confidence, leading to lower spending > recession > bear market.
Casey's General Stores Inc. (CASY)
On the other hand, if this current 90-day hiatus proves to be fertile soil for growing beneficial trade deals with major partners, especially China, then I think the economy rebounds soon. This makes way for continuation of the bull market with new highs on the way later this year.
Yet our trading plan has nothing to do with what I expect tomorrow or the week ahead. It is more about the next few months until we have clarity on tariff plans and what that means for the US economy and stock market.
As for CASY, this has been our best stock the past month, posting an impressive 16% rise. That’s because this is the perfect kind of stock blending conservative elements like consumer staples along with impressive growth prospects.
That means it is something that can do well in Risk On and Risk Off environments. I wouldn’t expect too much upside on shares until the next earnings report. But if we head lower for a while, it likely will not buckle much under that pressure.
Recommended Action: Buy CASY.
