Caruso Weekend Report: May 11, 2025
Weekend Summary
With markets ending both Friday and the week about unchanged, this past week was much more about individual stocks than the market as a whole. Institutional investors often spend more time rotating money than allocating new funds. Behind the quiet indexes, we saw broad strength in higher-growth and more speculative stocks, which indicates growing confidence by institutions, while most retail investors remain fearful and fixated on tariff talk.
Perhaps the best representation of the increasing preference for riskier assets is IBIT (Bitcoin) climbing over 6% for the week.
Though many growth stocks had a great week amidst quiet indexes, most stocks have hit a short-term pause despite an announced US–UK trade deal. This can be seen in our short-term FOMO reading (63%) and intermediate-term breadth reading (57%). While the UK deal was a positive step, the market’s muted reaction shows that a US–China deal is what markets are primarily focused on. Talks are being held this weekend, and at the time of this writing, there appears to be some good progress.
With so many investors negative about the market’s future, yet persistent strength in high-quality growth stocks, a positive development on US–China trade could trigger massive breakouts in names already under heavy accumulation. If stocks can climb amidst weak indexes and widespread fear, they’re likely to rocket higher if general conditions improve.
At Caruso Insights, we’ve been steadily increasing exposure for weeks as our view has been that climax selling occurred in early April. Of the positions we entered (many mentioned here in past weeks), it appears leadership is shining through in PLTR, GEV, SPOT, IBIT, HOOD, and TTAN, though we also have positions in TSLA, BSX, SFM, and TKO.
Identifying leadership early in a new uptrend is critical as these stocks tend to outperform for the entire bull market.
Given the continued headline risk, recent gains have allowed us to raise stops, mitigating much of the risk we took on when entering these positions. We can continue to bend with the market, and so far, price action has been very positive. If talks break down, we will quickly move back to higher cash levels—but our view remains that trade deals will happen (it’s in everyone’s interest), inflation will stay moderate, and this will culminate with the Fed cutting rates and investors playing catch-up in the coming months.
As we plan for maximizing performance in a new uptrend, Caruso Insights is having a flash sale — for a limited time only. Join now with an annual membership and get 2 bonus months free — that’s nearly 50% off the regular monthly rate.
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P.S. If the market uptrend doesn’t materialize right now, our tools will keep us in sync with whatever the market gives us. We sidestepped the recent tariff-related drops, navigated the 2022 inflation bear market, and more. We're not just hoping for better times — we're prepared for reality, wherever it goes.