Welcome to the deep dive. You know, when you
want to get a handle on what's really moving
the financial markets, but without getting totally
bogged down in endless articles and jargon. Yeah,
it's a lot to sift through. Exactly. So that's
what we do here. This week, we've been digging
through a whole pile of recent financial news,
you know, reports from places like CNBC, Forbes,
Fox Business, The Independent, Investopedia,
The Guardian, NPR, RIA. A whole bunch. Fisheracuse
.com, ABC News, New York Post, AP, PBS, WRAL.
Right, all focusing on the market action around
late April 2025. And our mission, really, is
to pull out the key bits, understand what fueled
the market's ups and downs. And maybe get a clearer
sense of what's coming next, or at least what
the signals are pointing towards. Precisely.
Think of it as your shortcut to understanding
a week that saw some, well, pretty significant
swings. OK, so let's dive right in then, because
early April, it really felt like concerns were
mounting, especially around trade. That's definitely
where it started. The early part of the month
was heavily colored by President Trump's announcement
of new tariffs. And these weren't small tweaks,
were they? No, not at all. We're talking tariffs
on goods from quite a few countries, and then
this really huge hike specifically for China
hitting 145%. Wow, 145%. That's a big number.
And the market noticed, I assume? Oh, it definitely
reacted. The immediate response was negative.
The S &P 500, which is a key gauge of the US
market, took a noticeable dip. Which sectors
got hit hardest? Well, you saw it particularly
in areas like tech and manufacturing, companies
heavily reliant on global supply chains and international
trade. And it wasn't just the tariff announcement
itself causing the jitters, right? There was
more going on. True. Trump also went on Truth
Social, suggesting the economy needed the Fed
to cut interest rates to avoid a slowdown. Plus,
he was openly critical of Fed Chair Jerome Powell
again. That kind of public commentary has to
add to the unease. Absolutely. I mean, whenever
the independence of the Fed chair is questioned
publicly like that, it just introduces another
layer of uncertainty for investors. Is monetary
policy going to be politically influenced? That's
the worry. And this is all happening against
a backdrop of sort of weakening global economic
forecasts anyway. Exactly. Around the same time,
the IMF revised its global economic growth forecast
for 2025 downwards, took it down half a percentage
point to 2 .8 percent. And the U .S. forecast?
They trimmed that too, down to 1 .8 percent.
So you had these existing worries about growth
and then boom, significant tariffs and these
comments about the Fed piled on top. It felt
almost inevitable that China would hit back.
And they did. Beijing announced retaliatory tariffs,
125 percent on American goods. So tit for tat.
Pretty much. And beyond that, there were reports
about China warning South Korea about exports
using Chinese rare earth that were heading to
U .S. defense firms. Which just highlights how
tangled these supply chains are. Exactly. And
how trade spats can quickly spill over into,
you know, wider geopolitical issues. It really
felt like everyone was bracing for this to drag
on. I remember seeing predictions of more market
falls. Yeah, some analysts were definitely sounding
cautious. Strategists at UBS, for instance, suggested
that depending on how the tariff situation played
out, we could see equities fall further. Did
they have a time frame? They floated the idea
of maybe a market bottom around the start of
Q3 2025. They were likely modeling the impact
on corporate profits, overall economic activity
if things didn't cool down. But wasn't there
a counter view? Someone suggesting maybe this
was the peak of the tension. Yes, that's right
Alpine macro offered a slightly more optimistic
take they suggested the tariff standoff is peaking
meaning the worst might be over or at least that
the most aggressive moves might be behind us
perhaps anticipating some Negotiation or you
know de -escalation it just shows how hard it
is to predict these things Different experts
weigh the factors differently. Okay, and while
all this was swirling in the stock market Something
kind of weird happened with crypto, right? Yeah
Bitcoin and gold. Yeah, that was interesting.
For a brief period amidst the stock market wobbles
and a falling US dollar, Bitcoin's monthly average
price actually edged above gold. That's unusual.
Very. It sparked some chatter about Bitcoin maybe
acting like a safe haven. But, you know, gold
still holds that traditional status for most
investors due to its long history. OK, so that
sets the scene. Rising trade fears, jittery markets.
But then. Fast forward to around April 22nd,
23rd. The mood seemed to change quite dramatically.
What happened? Yeah, the narrative took a real
turn. We saw President Trump's public statements
soften quite a bit. How so? Well, the big one
was him stating he had no intention of firing
Fed Chair Jerome Powell. Ah, okay. Given his
previous criticism, that's significant. Hugely
significant for the markets. They were hanging
on every word about the Fed. So hearing that
was a clear departure from his earlier tone.
That must have calmed a lot of nerves. Definitely.
And it wasn't just Powell. Treasury Secretary
Scott Besson also came out expecting a de -escalation
in the China trade war. De -escalation, do you
have specifics? He even suggested Trump was willing
to substantially cut tariffs. So taken together,
these comments signaled a potential shift. Maybe
a more conciliatory approach on trade and monetary
policy. And the market reaction must have been
positive. Oh, very positive. We saw big rallies.
The Dow, the S &P 500, the NASDAQ all up significantly.
Really shows how sensitive the market was to
those specific issues. Absolutely. It just underlined
how closely everyone was tracking those high
level statements on trade and the Fed. And was
this just a U .S. phenomenon or did it spread?
It went global. Overnight, Asian markets rallied
the Nikkei in Japan, Hang Seng in Hong Kong,
KOSPI in South Korea. Europe, too. Yep. European
markets followed suit. The FTSE 100, the DAX,
the CAC 40 all saw gains. It was like a synchronized
global sigh of relief. So this rebound basically
clawed back some of the losses from the previous
uncertainty. Pretty much. It was a much needed
lift after that period dominated by the tariff
years. And there was other... Potentially positive
news filtering through, too. Likewise. White
House Press Secretary Caroline Levitt announced
the U .S. had received 18 trade deal proposals,
which suggests, you know, active engagement behind
the scenes. Any hints of new partnerships? Well,
Vice President J .D. Vance was in India making
positive noises about boosting U .S.-India trade
cooperation. Diversification, maybe. potentially
hinting at broadening trade relationships, perhaps
lessening the reliance on or impact of the China
situation. OK, let's pivot a bit. A company that
always seems to be in the news. Tesla and Elon
Musk. What was their story during all this market
shot? Well, Tesla's Q1 earnings actually came
in below expectations. Revenue was down about
9 percent and net income took a big hit down
71 percent. Ouch. And wasn't there something
about public perception, too? Yes, some surveys
around that time indicated a bit of a negative
trend in public perception for both the company
and Musk himself. Okay, so weaker earnings, maybe
some image issues. Normally, you wouldn't expect
the stock to rally on that news, but it did,
right? It did. And this is where it gets kind
of fascinating, showing how unconventional stock
drivers can be sometimes. What was the trigger?
Despite the earnings miss and those surveys,
Tesla's stock jumped pretty sharply after Musk
announced he'd be spending significantly less
time at DOGE, the Department of Government Efficiency.
Wait, less time at his government role made Tesla's
stock go up? That's how the market seemed to
read it. The interpretation was, okay, he's refocusing
on Tesla. And investors apparently loved that
idea. Wow. Show us how much weight the market
puts on its perceived focus. Sometimes even more
than the bottom line numbers. It certainly seems
that way sometimes. And the good news for Tesla
stock didn't stop there. Oh, what else? It got
another boost later in the week on news. The
White House was planning to loosen rules around
autonomous vehicles. Oh, OK. That's obviously
seen as a big potential plus for Tesla's future
plans. Exactly. A potential regulatory tailwind
for their autonomous driving ambitions. So summing
up Tesla's week. Despite a rough earnings report,
Musk's shifting focus plus potential regulatory
help equals. Equals their best week in the market
since November 2024. The stock gained something
like 18 percent. It just highlights the complex
mix of factors driving individual stocks. Definitely.
OK, moving beyond the big headlines of trade
and Tesla, what else was moving the markets?
Any other interesting currents or company news?
We did see some action in currencies as the U
.S. dollar weakened a bit during the volatility.
One particular safe haven currency strengthened
and the ETF track in it went up to suggest some
investors were definitely seeking shelter and
perceived lower risk assets during that uncertainty.
What about different market sectors? Any standouts?
Good or bad? Well, it's interesting. Even with
the recent tech rally, Barclays pointed out that
year to date, the tech sector was still actually
lagging the broader market. So catching up, but
still behind overall for the year. Sort of. Yeah.
Still making up lost ground. On the flip side,
material stocks kind of underperformed towards
the end of the week. Any reason why? Partly dragged
down by Eastman Chemical. They specifically mentioned
tariff uncertainty and messing with their ability
to give future financial guidance. Right, so
even with the main indexes up, specific sectors
still felt the pimp. What about other individual
earnings calls? Heard Alphabet did well. Yes,
Alphabet Google's parent had strong earnings,
mostly driven by their ad business, especially
the AI -powered search stuff. Stock reacted well.
It did, yeah. Stock went up. Lots of analysts
raised their price targets. But it wasn't all
sunshine. Who else reported? Intel. They put
out weaker than expected guidance for the next
quarter their stock dropped. Okay, and T -Mobile
also saw its stock dip They reported slower subscriber
growth than hoped for and also flagged concerns
about tariffs potentially hitting mobile phone
costs So really a mixed bag at the company level
not just macro driving everything exactly. We
also saw charter communications big cable internet
provider, their stock jumped after good earnings.
But then others were pulling back. Yeah. Skechers,
the shoe company, actually withdrew its financial
guidance for 2025 entirely, cited the global
trade policy uncertainty. Shows how widespread
those macro worries are. Absolutely. And Southwest
Airlines also pulled some financial forecasts
pointing to an uncertain economic outlook in
general. Any interesting technical signals from
the market itself? Indicators flashing. Well,
we saw something called the strongest breath
thrust since November 2023. Breath thrust meaning
market breath is basically how many stocks are
participating in a move. A thrust means a whole
lot of stocks moved up together strongly suggests
strong momentum. Is that usually a good sign
for the future? Historically, the short term
results after one of these are kind of mixed,
so it's interesting, but maybe not a slam dunk
predictor. Anything else? Dollar. Gold. Yeah,
the US dollar index firmed up a little towards
the week's end after being weaker earlier. And
gold, after hitting a high point, actually fell
back. Suggesting maybe less demand for safe havens
as the week closed? Potentially a shift in that
safe haven demand, maybe. Seems like so many
competing signals. What about the average person?
Consumer sentiment? Did all this volatility have
an impact? It appears so. A survey out during
this period showed a pretty significant drop
in consumer sentiment. That's worrying, right?
Could affect spending down the line. It's definitely
something to watch. Weaker consumer confidence
isn't usually a great sign for future economic
activity. And one last thing I saw mentioned
foreign investors selling U .S. assets. That's
right. Goldman Sachs noted that foreign investors
actually offloaded a pretty sizable chunk of
their US asset holdings during this period. Is
that a major risk? Well, given how much foreign
investors hold, if that trend were to pick up
steam, it could potentially put pressure on equity
prices. Something to keep an eye on. OK, so let's
try and wrap this all up. Bringing everything
together, what's the overall takeaway mood from
this period? Where might things be heading? Well,
look, the week definitely ended on a more positive
footing. Major indexes were up, clawing back
those earlier losses. That's the headline. But
there's always a but, isn't there? But yeah,
the underlying volatility, the uncertainty around
trade, around the economy that hasn't just vanished,
it's still very much there. So the rebound doesn't
necessarily mean clear skies ahead. That's a
really key point. Deutsche Bank even put out
a note suggesting the damage done to the idea
of U .S. exceptionalism in the global economy
might be kind of long lasting, even with this
recovery bounce. And analysts are still cautious
about earnings. On average, yeah, we saw analysts
trimming their earnings expectations for the
rest of 2025. Still a fair bit of caution out
there. Though some were more upbeat. Didn't Citi
think stocks would keep climbing? Yes, you definitely
have differing views. Citi felt that now the
tariff news had stabilized somewhat, equities
should manage to sort of grind higher. So what's
next? What are people watching now? Big focus
is shifting to upcoming earnings, especially
from the big tech hyperscalers like Microsoft
and Amazon. Their results carry a lot of weight
and could give more clues about the broader economic
health. Makes sense. Sounds like navigating this
still requires care. Absolutely. As one financial
planner put it, patience and a disciplined approach
are pretty crucial for investors in times like
these. OK, so summing up our deep dive for late
April 2025, the market showed itself incredibly
sensitive to words, especially on trade and Fed
policy. Sentiment flipped fast. Very reactive.
Individual company stories, particularly Tesla,
also clearly mattered a lot. But we're still
getting these mixed signals from the broader
economy. Yeah, the week ended strong on the surface.
Major indexes recovered. But those fundamental
clones about trade, inflation, growth, they're
still hanging in the air. Exactly. Which leads
me to a final thought for you, our listener,
to maybe chew on. Go on. Considering how quickly
and dramatically market sentiment shifted based
mostly on, well, pronouncements and perceived
policy changes. How much do you think actual
hard economic data is driving things right now
versus the market's interpretation of what policymakers
might do next? That's a fascinating question.
How much is perception versus reality in the
current market? Something to definitely keep
in mind as you follow what happens next. Thanks
for taking this deep dive with us. See you next
time.