The Week in Charts (6/5/25)

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The most important charts and themes in markets and investing…

1) Buy in May and Stay?

“Sell in May and Go Away”

This catchy saying resurfaces as clickbait every single year, with the media stoking fear in the minds of investors.

But has this actually been a good rule of thumb to follow?

Not at all.

While lower than the November-April 6-month period, the S&P 500’s total returns from May-October are still positive on average (+6.6% annualized) with stocks higher 72% of the time.

Not exactly something you would want to “go away” from.

Those who followed the adage this year would have missed a 6.3% gain for the S&P 500 last month. That was the best May return for the index since 1990.

Which is why you should always ignore headlines telling you to sell based on the calendar. If you’re a long-term investor, every month is a good month to start investing…

2) The “TACO Trade” Rally

After a 24% rally from the April lows, the S&P 500 is now up 5% since the “Liberation Day” tariff announcement.

Why have investors been so eager to embrace risk and “buy the dip” despite the continued negative headlines and uncertainty over tariffs?

Pattern recognition.

A Financial Times writer has coined this the “TACO trade,” whereby “Trump Always Chickens Out” after announcing aggressive tariff policies, only to later delay, reduce, or cancel these policies. And when that shift occurs, the market explodes higher.

3) The Fastest Growing Company in History

When it comes to earnings growth and shareholder returns over the last decade, Nvidia is in a league of its own. No one else is even close.

And we received more evidence of this in their latest earnings report, with revenues surging 69% year-over-year to a record $44 billion.

But growth is slowing, and after 10 straight quarters of rising profits, Nvidia’s Net Income moved down to $18.8 billion in Q1 from $22.1 billion in the prior quarter due. NVIDIA’s net profit margin also fell to 43% in Q1, negatively impacted by a $4.5 billion charge from export restrictions on the H20 chip to China. This marks the lowest margin since Q1 2023, down from a high of 57% a year ago.

Investors appear to be looking past these concerns, however, with Nvidia surpassing Microsoft to become the largest company in the world. Its market cap of $3.46 trillion is 290x higher than a decade ago ($12 billion). We’ve never seen anything like this before. This is the fastest growing company in history.

4) A Tax Cut For the Wealthiest Generation?

Included in the “Big, Beautiful” bill passed by the house was a special $4,000 increase in the standard deduction only for taxpayers age 65 and older.

In doing so, they would be giving a tax break to the the wealthiest generation.

The median household net worth of $410,000 for 65 to 74 year-olds is over 10x higher than the median household net worth of those under 35.

And a record 31% of household wealth is now held by Americans that are 70 years of age and older, up from 19% back in 1989. This age group makes up 11% of the US population.

5) Rising Delinquencies

Over 12% of US credit card balances are now 90+ days delinquent, the highest percentage since 2011. Student loan delinquencies spiked to 7.7% after the pause on reporting delinquent federal student loans ended. Auto loan delinquencies rose to 5%, a 5-year high.

6) Musk Leaves DOGE and Is Pulling No Punches

Elon Musk’s time at DOGE has come to an end and he doesn’t appear happy about the house spending bill that could increase the deficit by $3 trillion over the next decade.

If signed into law, this would negate much of the work he has done over the past few months in trying to bring down the deficit and reduce wasteful/fraudulent spending.

To make the DOGE cuts permanent, congress must approve a rescissions package which would cancel previously appropriated funds.

But thus far, only $9.4 billion in DOGE cuts have been sent to congress to be made permanent (they have 45 days to approve), a small fraction of the purported DOGE cuts.

(Note: the DOGE website claims $180 billion in total savings, though that number is likely much higher than the actual annual savings, and only 43% of that savings total has been accounted for on the doge.gov website’s “wall of receipts,” so it is currently impossible to verify).

7) A Few Interesting Stats…

a) Self-driving taxi company Waymo is now doing over 700,000 rides per month in California, up from fewer than 100,000 a year ago.

b) Home Price changes since 2000…

• Australia: +393%
• Canada: +334%
• UK: +252%
• US: +218%
• Japan: -23%

c) The top 30 stocks in the S&P 500 over the past 30 years…

d) “You have to be wildly optimistic to believe that corporate profits as a percent of GDP can, for any sustained period, hold much above 6%.” – Warren Buffett, 1999

e) In July 2022, the average price of a used Tesla was over $36k higher than the average price of all used cars. Today, the average price of a used Tesla is less than $1k higher than the average price of all used cars.

Every week I do a video breaking down the most important charts and themes in markets and investing. Subscribe to our YouTube channel HERE for the latest content.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosures here.

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