Trading was less volatile this week but fell lower. Are markets becoming more patient or are they just taking a breather?
Monday
S&P 500 0.79% | NASDAQ 0.64%
Trading continued to ride the wave from last week to start a holiday shortened week. Technology stocks traded higher after tariff exemptions were announced for smartphones and computers.
Tuesday
S&P 500 0.17% | NASDAQ 0.05%
Markets were abnormally quiet with trading falling relatively flat compared to recent weeks. Bond markets stabilized on the day as the tax filing deadline came and went.
Wednesday
S&P 500 2.24% | NASDAQ 3.07%
Markets fell through the close as traders digested comments made my Chairman of the Federal Reserve, Jerome Powell, at an economic forum. Outlook has been mired by the uncertainty of tariffs which was detailed by Powell’s opening statements on Wednesday. There were no indications of a change of policy moving forward, which markets took as humdrum. Retail sales, however, came in better than expected.
Thursday
S&P 500 0.13% | NASDAQ 0.13%
Another flat day ahead of the Easter Weekend. Housing starts fell in March and labor markets showed signs of resiliency. Wednesday’s projection for a negative GDP for the 1st quarter contributed to the market melancholy on the day.
Friday
S&P 500 0.00% | NASDAQ 0.00%
Good Friday – Markets Closed
Conclusion
S&P 500 1.50% | NASDAQ 2.62%
Markets gave up some ground for the week. Although negative in terms of performance, it was considered a success given the high volatility measures from the past couple of weeks. Technology stocks continue swinging more aggressively as earnings are released while the threats of squeezed revenue discourage sentiment towards the Magnificent 7. We will likely see a pop in the short term as earnings roll in as the impact of tariffs will hit more in the 2nd quarter than in the 1st quarter. Right now, Gross Domestic Product (GDP) is projected to fall for the first quarter of 2025 which would indicate the economy is slowing for the first time since Q2 2022. A longer-term decline would occur if there were 2 consecutive quarters of negative growth which, at this time, is too early to tell. The Federal Reserve will continue to play it safe as they also believe the best way to approach the next quarter is to be patient.
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