Market Commentary

April turned in a bumpy market ride. Only the NASDAQ index eked out a small percentage gain for the month. The tariff announcement (Liberation Day) by President Trump on April 2^nd derailed the market. Technology names, already priced lower in March, fell further with the rest of the market. No sector was left unscathed.

By April 8^th, just one week later, the S&P 500 retreated 12.13%, the DOW lost 10.84%, the NASDAQ fell 13.25% and the Russell 2000 decreased 13.91%. The indices remarkably bounced back by the end of April, recouping much of the losses despite daily news on tariffs.

The Energy (-13.8%) sector performed the worst, followed by Healthcare (-3.09%). Consumer Staples (+2.8%), Technology (+1.39%) and Utilities (+1.17%) performed the best.

S&P 500:                             Apr     -0.76%          YTD    -5.31%
DOW:                                   Apr     -3.17%           YTD    -4.41%
NASDAQ:                            Apr     +0.85%         YTD    -9.65%
Russell 2000:                     Apr     -2.61%          YTD    -12.14%

Sector Performance YTD Through April:

Communication Services -5.85%
Consumer Discretionary -14.26%
Consumer Staples +5.70%
Energy -5.71%
Financials +0.83%
Healthcare +2.01%
Industrials -0.38%
Technology -11.41%
Materials +0.02%
Real Estate +1.35%
Utilities +4.17%

Current U.S. Treasury Yields:

6 Month Bill                         4.23%
2 Year Note                         3.86%
5 Year Note                         3.79%
10 Year Note                       4.33%
30 Year Note                       4.82%

The Economy and the Fed:

Weekly jobless claims totaled 241,000, higher than the 225,000 estimate. Continuing claims soared to 1.92 million and the highest level since November 2021. U.S. GDP fell at a 0.3% annualized rate in Q1. This marks the first pullback in three years.

Nonfarm payrolls increased 177,000, above the 133,000 estimate. The unemployment rate stayed at 4.2%. These numbers alleviate imminent recession fears. The tariff impact will be seen further down the road. These numbers will help to create a benchmark.

President Trump would like the Federal Reserve to begin to cut rates. Chair Powell and the FOMC are staying data dependent, and tariffs cloud the picture. Today the Fed left rates unchanged at 4.25%-4.50%. The economy is softening and Chair Powell noted that there is a higher risk of unemployment and inflation.

Looking Ahead:

72% of S&P 500 companies have reported. Earnings growth has been solid at a blended 12.8%. The revenue growth rate printed in the 4%-5% range. 76% of reported earnings and 62% of reported revenues were above estimates. This has been beneficial to the market recouping securities pricing back to April 2^nd.

Treasury yields had wild swings in April but have stabilized. Money Markets continue to yield 4% and remain a source of income and a volatility buffer in portfolios. There is $6.91 trillion in Money Market Funds waiting to invest.

It is important to remain invested during turbulent market moments. We adjust position sizes and take gains or losses on investments as appropriate to protect principal for client portfolios. Keeping core positions is vital to capturing the inevitable swift moves higher when the market decides enough is enough.

We believe the markets will remain range bound and choppy. Daily news alerts will continue to fuel prices swings. Tarriff uncertainty remains for the time being. We will continue to keep cash on hand and “mind the store” on current portfolio positions. We will continue to search for companies with solid fundamentals to add, as appropriate, to client accounts. The market, despite the chop, will move higher into year end.