Weekly Newsletter 04/25/25
Good afternoon and thank you for checking in.
Stock markets today were down a bit as of this writing following Thursday’s positive action…saying we have any action just being “a bit” has been highly unusual this year. After Monday’s headline worry of Trump possibly firing Fed Chair Jerome Powel, which caused markets to sell off sharply, we had three straight days of the S&P 500 gaining +1% and the tech heavy Nasdaq posting three straight days of +2% gains.
It feels like we start each day with 3 wheels of destiny. The first wheel is the “excuse of the day”: Trump/tariffs/trade/, Fed speak, recession opinion, employment stats, consumer sentiment, interest rates, geopolitical conflict, and my favorite, the wild card. The second wheel is the “wheel of frustration”: up in the morning, down in the afternoon; down in morning, up in the afternoon; down at the start and going lower; and everyone’s favorite, up at the start and going higher. The third is the “wheel of WOW!” …how much are we going to move: 1%, 2%, 3%, 4% and a small slice of 5%+. Prior to March 9th of this year, the last time we had a down day in excess of 2% in the S&P 500 was February 21, 2023. I believe this unusual calm created extraordinary complacency. To go over 2 years without a 2% move followed by 11 such events in less than 2 months will shake one up. We’ve experience this phenomena 8 times in April alone (we’ve only had 16 trading days). Stay balanced my friends.
The earnings calendar remains a tailwind for risk sentiment with a leading tech company the latest high-profile reporter out with well-received results. Bigger story this week has revolved around the White House's trade and Fed off-ramps. When it comes to trade, more hints that US-China tensions may have peaked with report China to exempt some US products from its 125% tariff. In addition, Treasury Secretary and apparent leading tariff negotiator, Bessent signaled progress in trade talks with South Korea. He said the two sides could reach an "agreement of understanding" as early as next week. Also, speculation about a near-term agreement between the US and India. Nothing really new on the Fed front after Trump said earlier this week he has no plans to fire Powell, though latest report discussed how the damage may already be done given the risks for the next Fed chair's credibility.
April University of Michigan consumer sentiment came in better than expected and March's final of 57.0, leaving it down for fourth straight month and lowest since June 2022. April 1-year inflation expectations surged to 6.7% from 5.0% in March, the highest since 1981. Looking ahead to next week, first look at Q1 GDP comes on Wednesday, followed by ISM manufacturing on Thursday and the employment report on Friday. Street currently looking for nonfarm payrolls to have increased ~150K in April following a 228K gain in March. Unemployment rate seen unchanged at 4.2% and average hourly earnings expected to increase 0.3% m/m. Average rate on a US 30-year mortgage eases to 6.81%, hovering near highest level in over two months with March new home sales ahead of expectations.
A personal finance note for a small group of you and another piece for my CPA friends to add to their already byzantine list of retirement caveats. There is now a “super catch-up” retirement savings contribution option. Starting this year, workers aged 60 to 63 can augment their retirement savings with an expanded “super catch-up” contribution under new rules created by the IRS last year as part of a package of inflation adjustments to retirement account contributions. This applies to 401(k), 403(b), governmental 457(b) and SIMPLE IRA plans that already offer catch-up contributions. If you meet certain criteria, this is an opportunity to boost your retirement contributions as you near retirement age. Those eligible can add $11,250 per year to their 401(k) accounts (up from the regular catch-up contribution of $7,500), increasing their overall annual contribution limit to $34,750.
The latest look back at “this day in history.” (Replace a few names and this story from 41 years ago could be from today)
President Ronald Reagan arrived in China for a diplomatic meeting with Chinese President Li Xiannian. Reagan’s trip highlighted his administration’s desire to improve diplomacy with China in light of the growing economic relationship between the two nations. Other topics of discussion between the two leaders over the course of the six-day trip included the development of commercial nuclear power in China and China’s displeasure with continuing U.S. support for nationalists in Taiwan.
The link below contains additional personal finance articles.
https://www.raymondjames.com/evangelista/resources
“The empty vessel makes the loudest sound.”--Plato
Thank you,
Kyle
KYLE CHRISTIANSON, CFP®
Financial Advisor
Raymond James & Associates, Inc.
1421 Pine Ridge Rd, Ste 300
Naples, FL 34109
Toll Free (800) 843-2025 | Direct (239) 513-6525 | Main (239) 513-6500 | Fax (239) 596-5474
Kyle.Christianson@RaymondJames.com
Any opinions are those of Kyle Christianson and not necessarily those of RJA or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. This is not a recommendation to purchase or sell the stocks of the companies mentioned. Leading Economic Indicators are selected economic statistics that have proven valuable as a group in estimating the direction and magnitude of economic change. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Bond prices and yields are subject to change based upon market conditions and availability. Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.
