PPI Inflation Decline and Trump’s Tariff Threats Impact Market Outlook

This week, a second inflation measure delivered surprising results. Following a weaker-than-expected Consumer Price Index (CPI) report yesterday, today’s Producer Price Index (PPI) data revealed that wholesale prices remained unchanged in February.

The PPI report showed no increase after a significant rise of 0.6% in January. Economists from Dow Jones had predicted a 0.3% gain.

Additionally, Core PPI decreased by 0.1%, which also fell short of expectations for a 0.3% increase. This marked the first negative reading since July.

This news could have provided positive momentum for stocks; however, it was overshadowed by President Trump’s latest threats in the ongoing trade conflict.

This morning on Truth Social, President Trump announced a potential 200% tariff on French alcohol, stating:

The European Union, one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States, has just put a nasty 50% Tariff on Whisky.

If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.

It’s important to note that Trump plans to announce more “reciprocal” tariffs in April that could affect the EU.

As this unfolds, Wall Street responded negatively. Trump’s previous remarks downplaying volatility in the Stock market come to mind. Treasury Secretary Scott Bessent echoed this sentiment this morning:

We’re focused on the real economy… I’m not concerned about a little bit of volatility over three weeks.

This trade conflict continues, as discussed in yesterday’s Digest, highlighting the ongoing challenges investors face.

Amid Market Declines, Luke Lango Identifies New Buying Opportunities

In light of the market’s recent performance, our hypergrowth expert Luke Lango has suggested new “buys.” Understanding his rationale will aid us in managing our portfolios through this volatility.

Let’s begin with insights from Luke’s Innovation Investor Daily Notes earlier this week:

Hold and wait. Buy the dip and pile into growth stocks on signs of a technical bottom and rebound.

Reach for protection and play defense on signs of a technical breakdown.

When Luke shared this guidance, the market had just lost two crucial support levels: the S&P 500’s 250-day moving average (MA) and the Nasdaq-100’s level of 19,440.

The significance of the “19,440” mark lies in its proximity to the Nasdaq-100’s 200-day MA. Luke explained:

[The Nasdaq-100] has crossed below its 200-day moving average precisely 11 times before since 1990.

In every instance, the market was on the cusp of a significant rebound or downturn, depending on subsequent market behavior within the following two weeks.

Additionally, if the Nasdaq-100 remains within 4% of its 200-day MA, stocks typically rebound over the next 12 months with average gains exceeding 25%. Conversely, falling more than 4% below that threshold often signals a bear market.

Luke’s strategy was to closely monitor whether the S&P and Nasdaq-100 could recover these vital levels.

Yesterday’s Market Bounce Signals Opportunity for Investors

Turning to yesterday’s market activity, both the S&P 500 and Nasdaq-100 experienced gains:

The Nasdaq 100 has reclaimed the critical 19,440 level (or about 4% below its 200-day moving average), a historically significant threshold for the index.

The S&P 500 has also risen above its 250-day moving average, marking another important recovery point.

Moreover, the S&P’s Relative Strength Index (RSI) has rebounded from oversold conditions in just two days—a setup that historically precedes substantial 12-month rallies.

Due to this strength, Luke made four new “buy” recommendations in his Innovation Investor service yesterday afternoon, after five previous recommendations on Monday.

While Luke acknowledged the risk of further market declines, he posited:

History shows that significant market volatility often presents excellent buying opportunities or leads to major crashes.

Currently, technical indicators suggest that the former is more likely. We may be mistaken, but we see it as a calculated risk.

As I write on Thursday, both the S&P and Nasdaq-100 remain just below Luke’s critical thresholds.

We will provide additional updates as needed.

Investors Skeptical Amid Tariff Concerns—Focus on Fundamentals

Some investors are choosing to exit the market due to fears related to Trump’s unpredictable tariff policies. However, it’s crucial to maintain perspective about the broader implications of his strategies.

To gain insight, let’s look at renowned investor Louis Navellier. In his Flash Alert podcast yesterday on Breakthrough Stocks, he noted:

If we implement tit-for-tat tariffs, ultimately, trade will become freer as the U.S. has more leverage than other countries. The goal is to achieve free trade while ensuring fair competition.

Clearly, many in the media are critical of President Trump and his approach. While he can be unpredictable, the ultimate objective remains free trade, and that responsibility falls on Howard Lutnick.

I know Howard Lutnick personally—a respectable individual who aligns with America’s interests, aiming to encourage businesses to relocate here.

As President Trump continues to navigate these challenges, the media’s frustration might cloud the potential long-term outcomes.

For Investor Peace of Mind, Emphasize Stocks with Strong Fundamentals

If concerns persist, consider adopting Louis’ market approach: concentrate on stocks with robust fundamentals.

This fundamentals-driven strategy has fostered one of the industry’s best long-term performances for Louis.