The famous economist Ben Grahm said, “In the short run, the stock market is a voting machine. But in the long run, it is a weighing machine.”
Well the markets voted and they do not like the tariffs announced last week.
What we’ve seen over the last 3 day with the S&P 500 falling over 14% is currently the worst 3 day period in the last 100 years. As of the market open on Monday both the S&P and the Nasdaq have entered into a bear market. What we are witnessing is a complete reassessment of prior assumptions on profit margins and inflation. The last time such reassessment needed to take place was March of 2020, before that, it was during the GFC. The magnitude and speed of the Trump administrations tariff assault leaves investors questioning all prior long held view points. One thing that is becoming crystal clear though: the post-WWII global economic order is not guaranteed in the future.
In just days, the outlook shifted from reasonable growth to an expectation of a recession. A great jobs number on Friday morning did absolutely nothing to reassure investors. The March jobs report was the last one taken before global tariffs were put in place.
Over the weekend JPMorgan’s head of economic research, Bruce Kasman, raised the probability of a global recession to 60% The bank expects U.S. gross domestic product to contract 0.3% in the fourth quarter; it previously expected 1.3% growth. They suggest unemployment will reach 5.3% next year – They also point out that a tariff is just another way to say tax-
So the stock market voted on and now comes the weighing part. It’s too early to tell if there will be a quick rebound. Even if they pull back on tariffs (which the Trump admn says will not happen) it may not be enough to bring in real buying, one real issue is that the damage to business sentiment has already been done, “The idea that this is a business friendly administration—that’s broken.” Said Kasman. That could take a long time to fix.
Trade wars are easy to start, but they can be hard to stop once the retaliation gets rolling. All eyes will be on a response from the European Union in the coming days. If they band together and put on (their own) reciprocal tariffs, there will be more downside.
Right now we are in a day by day and maybe even hour by hour wait and see mode, there definably will be buying opportunities but identifying them will be significantly harder than in the past.
The Baker Hughes rig count fell by 2 last week. There are 590 oil and gas rigs operating in the US –Down 30 from last year.
Metals Complex
Employment Picture –
March Jobs Report – BLS Summary–Released 4/4/2025 – The US Economyadded 228k nonfarm jobs in March and the Unemployment rate edged up to 4.2%. Average hourly earnings increased 9 cents to $36.00. Hiring highlights include +54k Healthcare, +24k Social Assistance, +24k Retail Trade, and +23k Transportation and Warehousing.
Average hourly earnings increased 9 cents/0.3% to $36.00.
U3 unemployment rate increased 0.1% to 4.2%. U6 unemployment rate decreased 0.1% to 7.9%.
The labor force participation rate was little changed at 62.5%.
Average work week was unchanged at 34.2 hours.
Weekly Unemployment Claims– Released Thursday 4/3/2025 – In the week ending March 29, the advance figure for seasonally adjusted initial claims was 219,000, a decrease of 6,000 from the previous week’s revised level. The 4-week moving average was 223,000 a decrease of 1,250 from the previous week’s revised average.
Job Openings & Labor Turnover SurveyJOLTS – Released 4/1/2025 – The number of job openings was little changed at 7.6 million on the last business day of February, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.4 million and 5.3 million, respectively. Within separations, quits (3.2 million) and discharges (1.8 million) changed little.
Employment Cost Index– Released 1/31/2025 – Compensation costs for civilian workers increased 0.9% for the 3-month period ending in December 2024. Wages and salaries increased 0.9% and benefit costs increased 0.8% from September 2024. The 12-month period ending in December 2024 saw compensation costs increase by 3.8%. The 12-month period ending December 2023 increased 4.2%. Wages and salaries increased 3.8 percent over the 12-month period ending in December 2024 and increased 4.3 percent for the 12-month period ending in December 2023. Benefit costs increased 3.6 percent over the 12-month period and increased 3.8 percent for the 12-month period ending in December 2023. This report is published quarterly.
This Week’s Economic Data- Blue links take you to data source
U.S. Trade Balance– Released 4/3/2025 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $122.7 billion in February, down $8.0 billion from $130.7 billion in January. February exports were $278.5 billion, $8.0 billion more than January exports. February imports were $401.1 billion, $0.1 billion less than January imports. The February decrease in the goods and services deficit reflected a decrease in the goods deficit of $8.8 billion to $147.0 billion and a decrease in the services surplus of $0.8 billion to $24.3 billion.
PMI Non-Manufacturing Index– Released 4/3/2025 – Economic activity in the services sector expanded in March for the ninth consecutive month. The Services PMI® registered 50.8 percent 2.7 percent lower than February’s reading of 53.5 percent.
PMI Manufacturing Index – Released 4/1/2025 – The March Manufacturing PMI registered 49.0 percent, 1.3 percent lower compared to February. The overall economy continued in expansion for the 59th month after one month of contraction in April 2020. The New Orders Index continued in contraction territory, registering 45.2 percent, 3.4 percentage points lower than the 48.6 percent recorded in February. The March reading of the Production Index (48.3 percent) is 2.4 percentage points lower than February’s figure of 50.7 percent.
U.S. Construction Spending– Released 4/1/2025 – Construction spending during February 2025 was estimated at a seasonally adjusted annual rate of $2,195.8 billion, up 0.7 percent from the January estimate of $2,179.9 billion. The February figure is 2.9 percent above the February 2024 estimate of $2,133.8 billion.
Chicago PMI– Released 3/31/2025 – Chicago PMI remained in contraction territory in March but rose to 47.6 from 45.5 points in February. The latest reading indicated that Chicago’s economic activity contracted for the 16th successive month in March.
Recent Economic Data – Blue Links bring you to data source
US Light Vehicle Sales– Released 3/28/2025 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 16.000 million units in February.
Personal Income – Released 3/28/2025 – Personal income increased $194.7 billion (0.8 percent at a monthly rate) in February. Disposable personal income (DPI)—personal income less personal current taxes—increased $191.6 billion (0.9 percent). Personal consumption expenditures (PCE) increased $87.8 billion (0.4 percent).
Third Estimate of 4th Quarter 2024 GDP – Released 3/27/2025 – Real gross domestic product (GDP) increased at an annual rate of 2.4 percent in the fourth quarter of 2024, according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent. The increase in real GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased. Real GDP was revised up 0.1 percentage point from the second estimate, primarily reflecting a downward revision to imports.
Durable Goods – Released 3/26/2025 – New orders for manufactured durable goods in February, up two consecutive months, increased $2.7 billion or 0.9% to $289.3 billion, the U.S. Census Bureau announced today. This followed a 3.3% January increase. Excluding transportation, new orders increased 0.7%. Excluding defense, new orders increased 0.8%. Transportation equipment, also up two consecutive months, led the increase, $1.4 billion or 1.5% to $98.3 billion.
New Residential Sales – Released 3/25/2025 – Sales of new single‐family houses in February 2025 were at a seasonally adjusted annual rate of 676,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.8 percent above the revised January rate of 664,000 and is 5.1 percent above the February 2024 estimate of 643,000. The median sales price of new houses sold in February 2025 was $414,500. The average sales price was $487,100.
Consumer Confidence– Released 3/25/2025 – Consumer Confidence decreased from 98.3 to 92.9 in March. The Present Situation Index which is based on consumers’ assessment of current business and labor market conditions, decreased 3.6 points to 134.5. The Expectations Index which is based on consumers’ short-term outlook for income, business, and labor market conditions, dropped 9.6 points to 65.2, the lowest level in 12 years and well below the threshold of 80 that usually signals a recession ahead.
Existing Home Sales –Released 3/20/2025 –Existing home sales in February increased 4.2% from January but decreased 1.2% year over year. Existing home sales increased to 4.26 million in February seasonally adjusted. The median price of existing homes for sale increased to $398,400, up 3.8% from one year ago.
Housing Starts– Released 3/18/2025 – February housing starts came in at 1,501,000, 11.2% above the January estimate but is 2.9% below the February 2024 rate. Building permits were 1.2% below the January rate at $1,473,000 and is 6.8% below the February 2024 rate.
Industrial Production and Capacity Utilization – Released 3/18/2025 – Industrial production increased 0.7% in February after rising 0.3% in January. Manufacturing increased 0.9%. Utilities output decreased 2.5%. Mining increased 2.8%. Total industrial production in February was 1.4% above its year-earlier level. Capacity utilization increased to 78.2% in February, a rate that is 1.4% below its long-run average.
Retail Sales– Released 3/17/2025– Headline retail sales were up 0.2% in February and are up 3.1% above February 2024.
Producer Price Index– Released 3/13/2025 – The Producer Price Index for final demand was unchanged in February, seasonally adjusted. Final demand increased 0.6 percent in January and 0.5 percent in December. On an unadjusted basis, the index for final demand moved up 3.2 percent for the 12 months ended in February.
Consumer Price Index–Released 3/12/2025– The Consumer Price Index for All Urban Consumers increased 0.2% in February on a seasonally adjusted basis, after increasing 0.5% in January. Over the last 12 months, the all items index increased 2.8 percent before seasonal adjustment.
Consumer Credit–Released 3/7/2025 – Consumer credit increased at a seasonally adjusted annual rate of 4.3 percent in January. Revolving credit increased at an annual rate of 8.2 percent, while nonrevolving credit increased at an annual rate of 3.0 percent.
This week we get data on Consumer Credit, CPI, and PPI.
This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any stock, bond, currency or CFD contract.
Some information contained herein has been obtained from third party sources believed to be reliable, but has not been independently verified by us; its accuracy or completeness is not guaranteed. Our commentary is based on information considered to be reliable, but no representation is made that it is accurate or complete, and should not be relied upon as such.
The views expressed represent the opinions and beliefs at the time of this commentary and are not meant as a market forecast. These views are subject to change at any time based on market or other conditions and Good Life Advisors disclaims any responsibility to update such views. This information may not be relied on as advice or as an indication of trading intent on behalf of any portfolio. Portfolio investments may change at any time.
Economic and performance information referenced is historical and past performance does not guarantee future results. References to future returns are not promises or estimates of actual returns we may achieve, and should not be relied upon.
No investment strategy or risk management process can guarantee returns or eliminate risk in any market environment. Investing in securities involves risk of loss. Stock and Bond prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future.
While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Weekly Market Update | Week 14, 2025
The Market is a Weighing Machine
The famous economist Ben Grahm said, “In the short run, the stock market is a voting machine. But in the long run, it is a weighing machine.”
Well the markets voted and they do not like the tariffs announced last week.
What we’ve seen over the last 3 day with the S&P 500 falling over 14% is currently the worst 3 day period in the last 100 years. As of the market open on Monday both the S&P and the Nasdaq have entered into a bear market. What we are witnessing is a complete reassessment of prior assumptions on profit margins and inflation. The last time such reassessment needed to take place was March of 2020, before that, it was during the GFC. The magnitude and speed of the Trump administrations tariff assault leaves investors questioning all prior long held view points. One thing that is becoming crystal clear though: the post-WWII global economic order is not guaranteed in the future.
In just days, the outlook shifted from reasonable growth to an expectation of a recession. A great jobs number on Friday morning did absolutely nothing to reassure investors. The March jobs report was the last one taken before global tariffs were put in place.
Over the weekend JPMorgan’s head of economic research, Bruce Kasman, raised the probability of a global recession to 60% The bank expects U.S. gross domestic product to contract 0.3% in the fourth quarter; it previously expected 1.3% growth. They suggest unemployment will reach 5.3% next year – They also point out that a tariff is just another way to say tax-
So the stock market voted on and now comes the weighing part. It’s too early to tell if there will be a quick rebound. Even if they pull back on tariffs (which the Trump admn says will not happen) it may not be enough to bring in real buying, one real issue is that the damage to business sentiment has already been done, “The idea that this is a business friendly administration—that’s broken.” Said Kasman. That could take a long time to fix.
Trade wars are easy to start, but they can be hard to stop once the retaliation gets rolling. All eyes will be on a response from the European Union in the coming days. If they band together and put on (their own) reciprocal tariffs, there will be more downside.
Right now we are in a day by day and maybe even hour by hour wait and see mode, there definably will be buying opportunities but identifying them will be significantly harder than in the past.
Fixed Income
Yield Curve
March FOMC Statement January Minutes Credit, Liquidity and Balance Sheet Federal Reserve Dot Plots
Treasury.gov yields FOMC Policy Normalization Statement Longer- Run Goals Jan 2024
Foreign Exchange Market
Energy Complex
The Baker Hughes rig count fell by 2 last week. There are 590 oil and gas rigs operating in the US –Down 30 from last year.
Metals Complex
Employment Picture –
March Jobs Report – BLS Summary – Released 4/4/2025 – The US Economyadded 228k nonfarm jobs in March and the Unemployment rate edged up to 4.2%. Average hourly earnings increased 9 cents to $36.00. Hiring highlights include +54k Healthcare, +24k Social Assistance, +24k Retail Trade, and +23k Transportation and Warehousing.
Weekly Unemployment Claims – Released Thursday 4/3/2025 – In the week ending March 29, the advance figure for seasonally adjusted initial claims was 219,000, a decrease of 6,000 from the previous week’s revised level. The 4-week moving average was 223,000 a decrease of 1,250 from the previous week’s revised average.
Job Openings & Labor Turnover Survey JOLTS – Released 4/1/2025 – The number of job openings was little changed at 7.6 million on the last business day of February, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.4 million and 5.3 million, respectively. Within separations, quits (3.2 million) and discharges (1.8 million) changed little.
Employment Cost Index – Released 1/31/2025 – Compensation costs for civilian workers increased 0.9% for the 3-month period ending in December 2024. Wages and salaries increased 0.9% and benefit costs increased 0.8% from September 2024. The 12-month period ending in December 2024 saw compensation costs increase by 3.8%. The 12-month period ending December 2023 increased 4.2%. Wages and salaries increased 3.8 percent over the 12-month period ending in December 2024 and increased 4.3 percent for the 12-month period ending in December 2023. Benefit costs increased 3.6 percent over the 12-month period and increased 3.8 percent for the 12-month period ending in December 2023. This report is published quarterly.
This Week’s Economic Data- Blue links take you to data source
U.S. Trade Balance – Released 4/3/2025 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $122.7 billion in February, down $8.0 billion from $130.7 billion in January. February exports were $278.5 billion, $8.0 billion more than January exports. February imports were $401.1 billion, $0.1 billion less than January imports. The February decrease in the goods and services deficit reflected a decrease in the goods deficit of $8.8 billion to $147.0 billion and a decrease in the services surplus of $0.8 billion to $24.3 billion.
PMI Non-Manufacturing Index – Released 4/3/2025 – Economic activity in the services sector expanded in March for the ninth consecutive month. The Services PMI® registered 50.8 percent 2.7 percent lower than February’s reading of 53.5 percent.
PMI Manufacturing Index – Released 4/1/2025 – The March Manufacturing PMI registered 49.0 percent, 1.3 percent lower compared to February. The overall economy continued in expansion for the 59th month after one month of contraction in April 2020. The New Orders Index continued in contraction territory, registering 45.2 percent, 3.4 percentage points lower than the 48.6 percent recorded in February. The March reading of the Production Index (48.3 percent) is 2.4 percentage points lower than February’s figure of 50.7 percent.
U.S. Construction Spending– Released 4/1/2025 – Construction spending during February 2025 was estimated at a seasonally adjusted annual rate of $2,195.8 billion, up 0.7 percent from the January estimate of $2,179.9 billion. The February figure is 2.9 percent above the February 2024 estimate of $2,133.8 billion.
Chicago PMI – Released 3/31/2025 – Chicago PMI remained in contraction territory in March but rose to 47.6 from 45.5 points in February. The latest reading indicated that Chicago’s economic activity contracted for the 16th successive month in March.
Recent Economic Data – Blue Links bring you to data source
US Light Vehicle Sales– Released 3/28/2025 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 16.000 million units in February.
Personal Income – Released 3/28/2025 – Personal income increased $194.7 billion (0.8 percent at a monthly rate) in February. Disposable personal income (DPI)—personal income less personal current taxes—increased $191.6 billion (0.9 percent). Personal consumption expenditures (PCE) increased $87.8 billion (0.4 percent).
Third Estimate of 4th Quarter 2024 GDP – Released 3/27/2025 – Real gross domestic product (GDP) increased at an annual rate of 2.4 percent in the fourth quarter of 2024, according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent. The increase in real GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased. Real GDP was revised up 0.1 percentage point from the second estimate, primarily reflecting a downward revision to imports.
Durable Goods – Released 3/26/2025 – New orders for manufactured durable goods in February, up two consecutive months, increased $2.7 billion or 0.9% to $289.3 billion, the U.S. Census Bureau announced today. This followed a 3.3% January increase. Excluding transportation, new orders increased 0.7%. Excluding defense, new orders increased 0.8%. Transportation equipment, also up two consecutive months, led the increase, $1.4 billion or 1.5% to $98.3 billion.
New Residential Sales – Released 3/25/2025 – Sales of new single‐family houses in February 2025 were at a seasonally adjusted annual rate of 676,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.8 percent above the revised January rate of 664,000 and is 5.1 percent above the February 2024 estimate of 643,000. The median sales price of new houses sold in February 2025 was $414,500. The average sales price was $487,100.
Consumer Confidence– Released 3/25/2025 – Consumer Confidence decreased from 98.3 to 92.9 in March. The Present Situation Index which is based on consumers’ assessment of current business and labor market conditions, decreased 3.6 points to 134.5. The Expectations Index which is based on consumers’ short-term outlook for income, business, and labor market conditions, dropped 9.6 points to 65.2, the lowest level in 12 years and well below the threshold of 80 that usually signals a recession ahead.
Existing Home Sales – Released 3/20/2025 – Existing home sales in February increased 4.2% from January but decreased 1.2% year over year. Existing home sales increased to 4.26 million in February seasonally adjusted. The median price of existing homes for sale increased to $398,400, up 3.8% from one year ago.
Housing Starts– Released 3/18/2025 – February housing starts came in at 1,501,000, 11.2% above the January estimate but is 2.9% below the February 2024 rate. Building permits were 1.2% below the January rate at $1,473,000 and is 6.8% below the February 2024 rate.
Industrial Production and Capacity Utilization – Released 3/18/2025 – Industrial production increased 0.7% in February after rising 0.3% in January. Manufacturing increased 0.9%. Utilities output decreased 2.5%. Mining increased 2.8%. Total industrial production in February was 1.4% above its year-earlier level. Capacity utilization increased to 78.2% in February, a rate that is 1.4% below its long-run average.
Retail Sales– Released 3/17/2025 – Headline retail sales were up 0.2% in February and are up 3.1% above February 2024.
Producer Price Index – Released 3/13/2025 – The Producer Price Index for final demand was unchanged in February, seasonally adjusted. Final demand increased 0.6 percent in January and 0.5 percent in December. On an unadjusted basis, the index for final demand moved up 3.2 percent for the 12 months ended in February.
Consumer Price Index – Released 3/12/2025 – The Consumer Price Index for All Urban Consumers increased 0.2% in February on a seasonally adjusted basis, after increasing 0.5% in January. Over the last 12 months, the all items index increased 2.8 percent before seasonal adjustment.
Consumer Credit – Released 3/7/2025 – Consumer credit increased at a seasonally adjusted annual rate of 4.3 percent in January. Revolving credit increased at an annual rate of 8.2 percent, while nonrevolving credit increased at an annual rate of 3.0 percent.
This week we get data on Consumer Credit, CPI, and PPI.
This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any stock, bond, currency or CFD contract.
Some information contained herein has been obtained from third party sources believed to be reliable, but has not been independently verified by us; its accuracy or completeness is not guaranteed. Our commentary is based on information considered to be reliable, but no representation is made that it is accurate or complete, and should not be relied upon as such.
The views expressed represent the opinions and beliefs at the time of this commentary and are not meant as a market forecast. These views are subject to change at any time based on market or other conditions and Good Life Advisors disclaims any responsibility to update such views. This information may not be relied on as advice or as an indication of trading intent on behalf of any portfolio. Portfolio investments may change at any time.
Economic and performance information referenced is historical and past performance does not guarantee future results. References to future returns are not promises or estimates of actual returns we may achieve, and should not be relied upon.
No investment strategy or risk management process can guarantee returns or eliminate risk in any market environment. Investing in securities involves risk of loss. Stock and Bond prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future.
While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Data Sources:
Conference Board Economic Indicators Bureau of Economic Analysis (BEA) Congressional Budget Office (CBO) U.S. Bureau of Labor Statistics (BLS) Federal Reserve Economic Data (FRED Charts)
CME Fed Watch U.S. Treasury – Yields U.S. Census Bureau Institute for Supply Management (ISM) Weekly DOL Employment Data BLS Monthly Jobs Report JOLTS All capital in one visualization 2020
US Energy Admn (EIA) BLS Consumer Price Index CPI BLS Producer Price Index PPIAtlanta Fed GDPNOW NY Fed Nowcast GDP US Census Bureau Housing Starts U.S. Energy Admn
Consumer Credit USCB Retail Sales Construction Spending Federal Reserve Dot Plots 2017 NY Empire Index Philadelphia Federal Reserve P/E Ratio Data -Yardeni Research
Technical Analysis Info: Koyfin.com StockCharts.com – Financial Charts Exponential vs Simple Moving Average
Other links: 1973 Arab Oil Embargo Hunt Brothers Silver Asian Contagion Long-Term Capital bailout
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