Outlook Currently, the CNN Fear & Greed index sits at a lowly 13 on a scale of 0-to-100.1 Very low levels like today are often associated with market lows and, therefore, often more opportunistic in nature. However, the tariff tantrum is turning into a saga, and it feels like we haven't quite reached the story's climax. As stock investors, we look at a company's safety, long-term growth pathway, and valuation. For some companies, specifically those that rely on a healthy relationship with China, the tariff saga focuses our efforts on safety and growth potential. That said, while a majority of our investments have limited (if any) direct exposure to China, for some, we will continue to err on the side of caution. . . . The U.S. equity market recouped some of its recent losses following the postponement of the tariffs announced on April 2nd. All major indexes finished solidly higher for the week, with the S&P 500 posting its best weekly advance since early November 2023.2 Tariff developments between the U.S. and the rest of the world continued to dominate headlines, further driving market volatility. The world's two largest economies, the U.S. and China, raised tariff rates against each other further contributing to trade war worries.3 However, the markets exhibited an explosive rally following President Trump’s announcement of a 90-day pause on reciprocal tariffs for all countries except China. The pivot signals a willingness to work towards a solution, opening the door to negotiations. Following the move, the S&P 500 spiked more than 9% marking its best intraday performance since 2008. While the tech-heavy Nasdaq Composite had an even heftier rebound posting up more than 12% marking its second-best day ever. The spike in market turbulence, reset of valuations, and rising optimism regarding the de-escalation of a trade war could suggest that stocks may find support. However, a mix of positive and negative headlines could prompt a bumpy path ahead. On the economic front, investors received key inflation data from the Consumer Price Index (CPI) and Producer Price Index (PPI). Both headline inflation measures slid unexpectedly for March. The CPI year-over-year rate eased to 2.4%, down from 2.8% in February. Excluding food and energy, the annual core rate fell to 2.8%, the lowest rate since March 2021. On the corporate earnings front, big banks kicked off the start of the first-quarter earnings season on Friday led by JPMorgan, Wells Fargo, Morgan Stanley, and BlackRock. Additional notable names reporting this week include Goldman Sachs, J&J, Bank of America, Citigroup, United Airlines, Abbott Labs, and Taiwan Semiconductors, among others. For the week, the S&P 500 and Dow Jones rose 5.7% and 5.0%, while the Nasdaq Composite jumped 7.3%. |
Upcoming Reports Monday: FOMC Member Harker and Bostic Speaks, Fed Waller Speaks Tuesday: NY Empire State Manufacturing Index Wednesday: Retail Sales, Fed Chair Powell Speaks Thursday: Philadelphia Fed Manufacturing Index, Housing Starts, Building Permits Friday: (Holiday - Markets closed) FOMC Member Daly Speaks |
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