Welcome to the Breakfast Club, your weekly dose of market insights and trading strategies! Join us live every Monday and Wednesday at 8:30 AM ET on Traders Reserve Live, where our experts break down the latest market movements, share actionable trade ideas, and answer your most pressing questions.
Tariffs Are Coming. Here’s Your Move.
Your portfolio is about to get hit by a one-two punch. New tariffs are on the way, targeting two major industries. If you’re not ready, you’ll get caught in the chaos.
Here’s the problem, and here’s your move.
Problem #1: Semiconductors
Tariffs on chips are coming, and they’re not a good thing. The sector is reliant on global supply chains. These tariffs are a tax on that reliance, not a fix. Expect increased costs and a potential shock to the system. This is a downside risk you need to hedge against.
Problem #2: The Hidden Opportunity
While everyone’s focused on tech, a different sector is about to get a massive boost. Tariffs on foreign pharmaceuticals are a huge win for American drug companies. They create a protective barrier, giving U.S. firms an instant competitive advantage. The market sees “tariffs” and sells. The smart money sees this and buys.
The Stagflation Threat
Beyond the tariff news, a deeper problem is brewing: stagflation. The latest ISM Services and Manufacturing reports show a dangerous combination of slowing growth and rising prices. This is a much harder problem for the Fed to solve than simple inflation. Don’t be fooled by the headlines; this trend could signal a shift in the market that demands a more cautious approach.
Our Watchlist
With this in mind, here are the stocks and strategies we’re watching:
- Arista Networks ($ANET): A fundamentally strong company with great earnings, but with the semiconductor tariff news on the horizon, we’re waiting for a potential pullback before jumping in.
- Netflix ($NFLX): The recent sell-off has created a significant discount. For investors with a longer time horizon, this could be a great entry point on an undervalued stock.
- SMH ETF: To hedge against the potential semiconductor tariff fallout, we’re looking at a put debit spread on the SMH ETF. This is a tactical move to protect against a sharp drop in the sector.
The rules are simple. One sector loses. One sector wins. Don’t get caught in the crossfire. Get ahead of it. Protect your downside in one sector, and look for a contrarian opportunity in the other.
We’ll be back Monday morning at 8:30 AM EST on “Breakfast Club Live” with more market insights. But don’t wait.
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