Stock Talk - V-Bottom Fireworks: The Rally Most Everyone Missed (And What’s Next)

Episode Date: July 4, 2025

I said April lows were likely the bottom for stocks in 2025, and that call has played out as markets have surged to new all-time highs in record time, without the help of Fed rate cuts. I'm going to talk about what made this rally different from past rebounds, why history pointed to a V-bottom recovery, and what comes next as we head into the back half of the year. Learn key technical signals, bond market data, and historical analogies such as the 1998 Dot-Com setup, that have helped guide our thinking, and what sectors we expect to lead (or pause) in the coming months.   About Chris Perras, CFA®, CLU®, ChFC®, Chief Investment Officer: As CIO, Chris is the lead investment strategist and director of research at Oak Harvest Financial Group. Chris develops the firm's core market outlook, putting his decades of experience and expertise to work for our clients. He hosts Oak Harvest's podcast, "Stock Talk," available on the website with new episodes each week. He completed his undergraduate studies at Georgia Tech, and went on to obtain an MBA from the Harvard Business School. Driven by a desire to maximize his knowledge and skill set, he acquired financial planning and investment management qualifications, becoming a Chartered Life Underwriter (CLU®), a Chartered Financial Consultant (ChFC®), and a Chartered Financial Analyst (CFA®).   Stock Talk is a weekly vlog/podcast dedicated to discussing the Oak Harvest Financial Group Investment Team's perspective on what's happening in the market. Hosted by Chief Investment Officer Chris Perras, each episode brings you our views on stocks, the market, and the economy — with a little education thrown in for good measure. Listen each week and help stay connected to your money!   Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free consultation: https://click2retire.com/Connect   Important disclosures: Content of Oak Harvest podcasts expresses the views of the speaker and is for informational purposes only. Oak Harvest believes that any data, articles, or information cited are reliable at the time of creation, but does not warrant any information contained herein to be correct, complete, accurate, or timely. References to third-party analysts should not be seen as an endorsement of their views or recommendations, and you should do your own research before investing. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast constitutes personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Any specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss, and past performance is not indicative of future results.

The investment team here at Oak Harvest has been discussing the likely V-bottom in stock since mid to late April, while many others, including numerous retired hedge fund billionaires were touting lower lows, crashes, or retests. We discussed this for weeks in our videos. Looking back, April 7th was what we thought was the low for the overall S&P 500 index and for U.S. stocks, most likely for the rest of 2025 X the unforecastable Black Swan event. The minus 20% bare market correction was largely event-induced by President Trump's unforeseen tariff policies. X the great financial crisis in 2007-8 and the popping of the speculative dot-com bubble frenzy

in 2001, which did proceed longer and deeper recessions. History said, enough damage had been done, and we would likely V-bottom in a similar fashion as the V-bottoms in the last 20 to 30 years. And investors, they're really good news here. this V-bottom happened without the Federal Reserve intervention and interest rates being cut. More Fed rate cuts are in front of us. Think of that, investors. We're at marginal new all-time highs in stocks, and the Fed is paused. This is why I brought thrust on April 24th created the first of what many charters call a bullish island reversal. I read at least 10 articles pooh-pooing this

data set at the time. This is why one of our follow-on videos titled was V-bottoms, No one gets in. One can rationalize why markets have V-bottom since early April on walking back of tariff extremism, better jobs, and wage inflation data, but viewers who know me know I like real-time market data. The bond market data since early April was saying real growth was okay, and inflation peaked in early April, not the stagflationary doom-bias calls that many others were suggesting. For months, we've discussed how the charts and the economy looked very similar to the period

that was mid.com, not peak.com. The period into October 1998 fair market sell-off was caused by the event of hedge fund long-term capital blowing up. I haven't been able to find many who believe this analogy or will spend any time researching it. I'll update a few of the chart overlays like the S&P 500 and the SOX SAC semiconductor index and a couple of others later in this video. But look at this data set before you dismiss my thoughts. According to Tyler Lovinggood of Potomac Research on average, it's taken 512 trading days for stocks to reach new all-time highs following a minus 20% decline when using closing prices. Look at this data set. Look closely. It took us only 57 days to regain new all-time highs during this V-bottom. Next shortest time period, yes,

investors, late third quarter, early fourth quarter, 1998, mid.com infrastructure buildout. Back then, it took 59 days, only two more. No other V-Bot. bottoms come close, not the COVID-induced government stimulus windfall in 2020, not the earnings recession bear market in 2022. Here's an update of the S&P 500 overlaid back then and now. The pattern remains bullish, and yes, historically, July is one of the better returning months for the S&P 500 with earnings and buybacks around the corner. Up and to the right is good. New all-time highs are not bearish historically. That said, after rallying for almost three months off the April lows, do not expect the pace and percentage gains of stocks to continue at this rate.

Expect the pace to slow. What groups might slow? Well, technology names that have led the rally usually slow their gains in the third quarter. I would expect the same this year, with semis likely stalling and maybe software and healthcare taking up the lead. Here's the overlay of the SOX SACS semiconductor index in 1998, and now, updated. We called for a semiconductor rally while many others were hunkered down in April and May calling for lower stocks and risk off. We got our rally. We don't expect a broad semi-sell off in the second quarter but do expect a two to four-month sideways consolidation after second quarter earnings per share are reported in August. This would be the

AI pause that refreshes. We got this similar dynamic playing out in late 1998-99. Maybe the next stage higher on semis requires a China-US trade agreement or maybe it's just to digest inventory. History says we are likely only about one-third done with an 18 to 24-month semiconductor rally. Investors, we would expect a normal late-summer pullback in the markets, but investors, you most likely won't see those low levels of April again for quite some time, if at all, this year. Many institutions got too bearish near the April lows and de-risks, and they're already way behind performance curve in the second quarter. If this continues to play out as we expect. Our team has stuck with our 2,025 year-end target of about 6,600, even as

stocks sold off into April and most strategists slash their targets from over this number to the low 5,000s, and are now raising them once again. Does this mean that you shouldn't add to stocks, particularly if you're younger and in saving and accumulation mode? No. Why? Because rarely can you pick the absolute level in both price and time on both the buy side, the sell side, and the buy side once again, particularly in gross stocks, as we've covered in prior videos. New all-time highs are not bearish. Investors, regardless on the path for the economy and the financial markets in the next few months, the investment team at Oak Carvis will be here, crewing the ship and adjusting our models where we can. Until next week, have a blessed weekend and a great and safe Fourth of July, and know

if the Oak Carvis team is doing what we can to plan for you and your family's future, regardless of what stage you're at, into, or out of your retirement. All content contained with an Oak Harvest podcast expresses the views of the speaker and is for informational purposes only. It is based on information believed to be reliable when created, but any cited data, indicators, statistics, or other sources are not guaranteed. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you,

and nothing in this podcast should be considered as personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment, and your investment results may differ when compared to an index. Specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss, and past performance is not indicative of future results.