Stock Talk - V-Bottom Recovery-The Beat Goes On-What's Next? Stock Market Update, Friday Sept 19, 2025

Episode Date: September 19, 2025

Are we in the middle of a historic V-bottom recovery that mirrors the Dotcom boom, but this time fueled by AI? In this week’s update, I break down why I believe the Federal Reserve’s recent rate cut, the strength of the S&P 500 since April, and the powerful role of semiconductors all point to a bull market that still has room to run. I compare today’s market action to the late 1990s tech buildout, explain what history tells us about Fed pauses and all-time highs, and share why short-term pullbacks may just be noise on the way to much higher levels ahead. If you’re wondering where stocks might go from here, or how to navigate volatility with a clear plan, I’ll walk you through the data, the history, and the strategy behind staying invested for long-term growth.   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/lets-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.

Hey everyone, Chris here with Oak Harvest with another stock talk with our new format. If the Fed funds futures market proves its generally worthless predictive self, that's being correct no more than five to seven days in front of the Fed meeting. The Federal Reserve just cut interest rates for the first time in almost three quarters a few days ago. That's the first time since December 18th of last year. If you're an investor waiting on the Fed, you missed out on over 13% percent. total gain in the S&P 500 since then, and the same year-to-date gain of about 13% in the S&P, and an impressive, almost 29% gain off the V-bottom low on April 8th.

Our team has discussed since mid-delayed April, our belief that that was a V-bottom recovery, and in general, no one would get in at prices they really wanted to, that a retest of those April lows wasn't coming, and investors' time was better served studying the history of V-bottom recoveries. time better spent than listening to the usual suspects who were bearish and the doomers predicting crashes based on intellectually stimulating but almost always irrelevant theories. Investors, the question now is where do we go from here if the V-bottom path continues to play out as we expect. That and what should an investor do about it? First, here's my trusty overlay

of the S&P 500 during the dot-com internet buildout in 1997 through 2000. First, our current AI buildout, which started in the second half of 2003. As frequent followers know, it's my belief with the October 1998 long-term capital event-driven sell-off minus 21% on the SB 500 lines up almost exactly with our recent April 2025 event-driven tariff tantrum, that Liberation Day sell-off, which was also a near identical minus 21%. Investors, here again is the same overlay

of the Semiconductor Sox Index. And finally, I went out and I found an even more cyclical sub-industry within semiconductors. That's the semiconductor equipment index, which contains companies like ASM lithography, lame research, and KLA instruments. This is really the cyclicals of cyclical growth industries. In fact, history says that the growth cycle and semis doesn't end until this group outperforms for 12 to 18 months in a major way. that the semi-equipment group was one of the worst relative sectors outside of softwares and tech industry the last 18 months.

How come? Well, they ran into three concurrent negative issues. First, the hype over the IRA-Biden semiconductor spending and chipsack hit near the exact same time the China orders peaked in 2024. Then our government sanctioned China orders for semiconductor equipment. And finally, demand from the likes of Intel for equipment. fell off a cliff. These charts say to me that the rally in stocks, specifically, technology stocks, isn't over. I would expect some minor give back the second half of September, but not very much on a percentage basis, meaning I don't believe any calls for minus 10% or worse will happen yet.

In fact, historically, with this kind of setup of a V-bottom, the pullbacks are usually contained to very minor percent downs, those of minus 2 to minus 4%. Historical data from long Fed pauses is bullish. The data on Fed pauses between five and ten months says that stocks were higher a year later, 10 out of 11 times with an average return of 12.9% and a median return of 14.5%. Investors, the 2001.com bust is in this dataset, as is the 9-11 terrorist attack, both cuts trying to change recession momentum, them. Seven out of 11 times the S&P 500 was up more than 10%. Investors, for a number of years,

the O'Carb's team has tried to dispel investors' fears of buying stocks at all-time highs, as historically, returns have been quite positive over future time periods. Historically, all-time highs are not bearish in quite an ongoing feature in bull markets. Investors, data from the Carson Group, showing that when Fed cuts rates with stocks near all-time highs, were higher a year later, 23 under 23 times. These two data sets would triangulate to an S&P 500 target of between 7300 and 7400 using those average gains sometime in 2006. I'm going to go back once again to the dot-com AI cycle overlay we've been mapping out since the V-bottom in April to see if this projection of 7300 to 7400 would make sense based on history. Here's an updated over

relay of the S&P 500, then and now once again. Investors, how remarkable is this chart? We are still mirroring the same pattern back during dot com almost to the day and week in the S&P 500. I think that's pretty crazy. Think about it. The names have changed, the weights have changed, and it was a generation ago, but we continue to mirror that period in investor history. I still think that it's likely that the August 1st print was the low for the second half of 2025. Investors were in a V-bottom pattern since April 8th. Volatility is collapsed, and that's without the Fed cutting interest rates. Cost of forward hedging remains relatively high versus actual volatility.

To me, investors, that spells the wall of worry. Be prepared in advance of the fourth quarter of 2025 to hear about the chase for year-end performance before it takes place. Investors, if this V-bottom pattern continues its historical path, which I expect, expect a little bit of weakness into the end of September on repositioning and institutional tax selling and maybe the first few days of October, which should be bought. Investors V-bottoms historically do not have extended or deep pullbacks on a percentage terms until after the 10th or 11th month closer to when you approach a year-holding period, for investors who are good enough to buy at or near the lows. Why? Probably because their gains

become long-term in nature, and usually that can induce some selling and profit-taking. Should this pattern continue, I can see a target of around 7200 in February or early March of 2006 before an extended period of sideways or a meaningful percentage decline. For those of you who stuck with your financial plan amongst the tariff uncertainty in April, congratulations to you. For those of you who added or initiated new positions a double congratulations. That said, regardless of the path for the economy and financial markets in the next few months, the investment team, and O'Carvis will be here, manning the ship and adjusting our models and our long, short, hedged equity fund where we can. Until next week, have a blessed weekend. Congratulations to Coach

K at Georgia Tech and the Georgia Tech football team on their big win over Clemson on Alexis Second field gold and know that the oak harvest team is doing what we can to plan for you and your family's future regardless of what stage you're at in your career or in 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.