Investment Update April 1, 2025

Last Week on Wall Street

Economic data included a slight upgrade to U.S. GDP for Q4, and positive news for durable goods orders and a variety of real estate sales and price data. However, consumer sentiment took another dip downward, likely due to uncertainty about global economic policy.

Equities fell around the world, with concerns raised about potential economic policy changes globally and weakening consumer sentiment. Bonds were flattish with sticky inflation offsetting a usual risk-off response. Commodities were mixed, with energy prices a bit higher.

U.S. stocks began Monday positively, up nearly 2% upon hints that the U.S. may back off some planned tariff measures on April 2, now only days away. However, by Wednesday, potential new tariffs on non-U.S. autos and auto parts seemed to sour the mood again, as did weakened consumer confidence readings. Last week proved to be just another example of how closely financial markets are reacting to trade news above all else at this point. By sector, stocks saw gains in more defensive consumer staples as well as energy, while technology and communications saw the sharpest declines. Real estate earned a small gain for the week.

Foreign stocks fell to a similar degree as U.S. stocks, with only the U.K. showing a minor gain, while Japan fared a bit worse than Europe. Concerns were largely the same as in the U.S.—the potential impact of the upcoming tariff deadline this coming week and still-unclear implications on foreign trade changes in a variety of industries, including autos. However, as seen in the foreign stock performance year-to-date, there have been rising signs of a more positive shift in sentiment for international stocks. This has come with moves toward more deficit spending that could act as a catalyst for economic growth, which has been sorely lacking globally in recent years, and which explained foreign stock sub-par valuations to some degree.

Bonds were mixed for the week, with U.S. government bonds outperforming corporate bonds as spreads widened slightly. High yield lost a bit of ground, while floating rate gained. Foreign developed market bonds earned small gains, while emerging markets lost ground as investors inched away from risk.

Commodities were mixed, with gains in precious metals and energy, offset by declines in industrial metals and agriculture. Crude oil rose over a percent last week to $69/barrel, with prices remaining within a trading range and a balance of supply and demand factors generally.
(Source LSAConnect)

Fact of the Week
On 3/14 and 3/17, more than 400 S&P500 stocks were up on the day on a net basis. That was the 11th time since 1990 that net daily breadth readings were above 400 on back-to-back days. After the ten prior occurrences, the S&P 500 was higher six and twelve months later 90% of the time.
(Source: Bespoke)