US STOCK MARKET

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MARKET RECAP

• US stocks fell by 2.24%, while international stocks dropped by just 0.53%. Bonds were about flat, down by 0.07%.
• Economists have been lowering their growth estimates for the year. Goldman Sachs dropped their 2025 outlook to 1.7% growth from 2.4%.
• Trump doubled tariffs to 50% on Canadian steel and oil but then decided not to follow through, a pattern that has become typical over the last few weeks.
• There was some good inflation news, as CPI and core CPI increased by 0.2% month over month compared to a consensus estimate of 0.3%. Year over year, CPI was up by 2.8%, down from 3.0% in January.
• On Thursday, the SP500 fell into correction territory as Trump imposed 200% tariffs on alcohol imports from the EU. The index now trades below its 200-day moving average (see chart below).
• Gold hit a record with all of the craziness.
• Consumer sentiment is taking a big hit due to tariffs and the administration’s haphazard approach. The University of Michigan survey fell by 11% from last month and is not at the lowest level since November of 2022.
• In another warning sign of a slowing economy, airlines have been warning of lower demand.

SP500

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MARKET RECAP

• Trump’s “America First” policy is doing a good job of putting America second or worse. US stocks were down by 3.28% for the week, while international stocks were up by 2.95%. The tariff policy doesn’t make sense, he puts on a tariff only to take it off the next day and then delay it for another 30-days. Trump is singlehandedly pushing the economy into a recession. GDPNow forecasts Q1 growth at -2.4%.
• 25% tariffs took effect on Tuesday on goods from Mexico and Canada. Canada responded in kind on $100 billion of US imports. Mexico will shortly announce its moves.
• On Wednesday, Trump gave automakers a one month exemption from the 25% tariffs.
• ADP payrolls came in at 77k, less than the 162k forecast. On the regular jobs report on Friday, there were 151k new jobs, less than forecast. There are warning signs that the economy is beginning to slow.

SCOREBOARD

MARKET RECAP

• SPX -0.98%, NASDAQ -3.47%
• Inflation did not exceed expectations, coming in at 2.5% year over year.
• Interest rates have been dropping fast. The White House would say it reflects DOGE efforts to cut spending, others say it reflects a slowing economy. The 2-year is at 3.99% and the 10-year at 4.24%.
• Trump continues to threaten tariffs. There seems to be no cogent policy on tariffs, and the uncertainty is beginning to impact markets. It is like he wants a trade war. The only problem is that it will bring down everyone.
• The Atlanta Fed’s GDPNow has fallen to an estimated growth rate of 1.5% in the first quarter.
• Jobless claims increased.
• In a national embarrassment of historic proportions, Trump and Vance railroaded and embarrassed Ukrainian President Zelensky at a press conference. It is pretty clear that Trump is actually siding with Putin and Russia.

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