April 13, 2025
Volume 12, Issue 15
Weekly Recap
Domestic stocks closed a crazy, volatile week higher after a slew of trade-related headlines dominated sentiment. Last week opened with equities sharply lower, extending losses from the prior week, as negative sentiment intensified ahead of Wednesday’s announced implementation of the Trump administration’s latest round of tariffs. However, on Wednesday, after sharp stock and bond market declines, President Trump announced that he was authorizing a 90-day pause on the higher tariffs for most countries, effective immediately. The news sent stocks rocketing higher, with the Nasdaq Composite gaining over 12 percent and logging its second-best day on record. The S&P 500 gained over 9 percent.
Notably, however, the Trump administration excluded China from the 90-day pause, announcing several increases to tariffs on Chinese goods throughout the week instead (up to 145 percent), while China responded with several increases to levies on U.S. imports (up to 125 percent). The escalating trade war between the world’s two largest economies – and concerns about the broader impact it could have on global economic growth – appeared to dampen some of Wednesday’s positive sentiment, which led to stocks giving back some gains on Thursday before a Friday rebound. Once the dust settled, the S&P 500 finished up 5.70 percent for the week, while the Nasdaq Composite closed 7.29 percent higher. The small-cap Russell 2000 lagged but still posted 1.82 percent gains.
Meanwhile, the Federal Reserve released minutes from its March policy meeting on Wednesday. According to the minutes, policymakers “generally saw increased downside risks to employment and economic growth and upside risks to inflation while indicating that high uncertainty surrounded their economic outlooks.” Meeting participants also “judged that inflation was likely to be boosted this year by the effects of higher tariffs,” and most members favored a “cautious approach” to monetary policy amid “uncertainty about the net effect of an array of government policies on the economic outlook.”
While Fed policymakers stated their belief that they remain well positioned to respond to incoming data and adjust monetary policy as needed, they also acknowledged that they “may face difficult trade-offs if inflation proved to be more persistent while the outlook for growth and employment weakened.”
Elsewhere, the Bureau of Labor Statistics released its March consumer price index data on Thursday, reporting that core (ex-food and energy) prices rose 0.1 percent from the prior month, the lowest reading in nine months. Year over year, core prices rose 2.8 percent, the smallest 12-month increase since March 2021. The report indicated some welcome relief for consumers prior to the latest round of tariffs. However, on Friday morning, the University of Michigan reported that its Index of Consumer Sentiment’s year-ahead inflation expectations surged to 6.7 percent in April, the highest level since 1981, “amid growing worries about trade war developments that have oscillated over the course of the year.” The overall index reading declined for the fourth straight month to 50.8, down 11 percent from March and the lowest level since June 2022. The volatility and uncertainty around global trade during the week weighed on U.S. Treasury securities, too, which generated negative returns as yields increased across the yield curve. Long-term yields saw the sharpest increase, followed by intermediate- and short-term yields. The yield on the benchmark 10-year U.S. Treasury note rose to well over 4.5 percent by Friday morning before settling at 4.48 percent at the close after ending the prior week under 4 percent.
Market Monitor
A full listing of market performance data is available here.
DQYDJ.com (“Don’t Quit Your Day Job”) offers helpful investment calculators here, including one that shows total returns for individual stocks. Koyfin.com provides reams of data on individual stocks, including the ability to track total return — and just about anything else — over time.
In the News
Consumer prices declined month-over-month in March for the first time in nearly five years, a welcome development for inflation-weary families but one that economists said is likely to be short-lived due to new trade tariffs.
The gloves are off. The next chapter of U.S.-China decoupling has begun. The pain will be felt everywhere. In jacking up his tariffs on China – and pausing steep duties on dozens of other nations – President Trump is pushing the world’s two biggest economic powers into a battle that will leave neither unscathed and risks tanking the global economy.
What’s the deal with tariffs? Where things stand. Tariff Q&A.
President Trump is wielding tariffs to try to close the massive U.S. trade deficit in goods, which he sees as a sign of economic weakness. But it is only part of the trade story. While the U.S. buys more goods from abroad than it sells, the opposite is true for services, which include everything from streaming subscriptions to financial advice. Trump left these service exports out of his tariff math, but they are being pulled into his trade wars nonetheless.
Americans are in the dumps about the economy. Consumers took a gloomier view of the economy in March, according to the University of Michigan’s monthly survey, a slide that economists fear might depress spending and investment. Data Dump: Index of Consumer Sentiment; Mortgage Applications; FOMC Minutes; Philly Fed; Jobless Claims; CPI; PPI;Consumer Sentiment.
Charts of the Week
I found the following articles to be of note. Some may be of interest only to advisors while others are aimed more broadly. You may hit paywalls below; many can be overcome here.
- Four Questions You Should Ask to Combat the Market Chaos (Jason Zweig)
- Nobody Knows (Yet Again) (Howard Marks)
- If You’re Nearing Retirement, Here’s What to Do With Your Money Now (Anne Tergesen)
This is the best thing I’ve read recently. The silliest. Forgery. Warren Buffett thinks tariffs are a bad idea. Industry news. Grave mistake. TV ratings spike for “business news.” Life comes at you fast.
A Boston clarinetist, who died recently at age 85, used a middle-class income to build a fortune in the stock market, and gave away $125 million.
“The problem with the words ‘always’ and ‘never’ in an investing context is that they suggest a certainty that simply does not exist in the complex and chaotic world of financial markets.” ~ Joe Wiggins
Securities and advisory services are offered through Madison Avenue Securities, LLC, a member of FINRA and SIPC, a registered investment advisor. This report provides general information only and is based upon current public information we consider reliable. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment or any options, futures, or derivatives related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, Securities and advisory services are offered through Madison Avenue Securities, LLC, a member of FINRA and SIPC, a registered investment advisor. This report provides general information only and is based upon current public information we consider reliable. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment or any options, futures, or derivatives related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities, other investment, or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that price or value of such securities and investments may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Diversification does not guaranty against loss in declining markets.
