Market Musings 4/30/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Markets recover from early April #Tariffs losses, but is everything really ok now?
The S&P 500 ends April down less than -1% as markets almost fully recover from the #Tariffs correction.
It was a very turbulent month opening down over -11% on massive “reciprocal” #Tariffs. However, the White House began backtracking with delays and hinting for deals－resulting in a 12% rally through the end of the month. The S&P ends April down just -0.8% despite massive volatility from #Tariffs drama.
😳 Aprils Tariffs
We’re entering May with a lot of questions on the economic reality. While the market recovered on investors betting on a quick resolution with #Tariffs deals, it feels almost priced for perfection now.
However, there hasn’t been much positive leaked on the negotiations front so far. Our largest trade partners seem frustrated while China isn’t even engaging yet. A global 10% #Tariffs is already in effect and the so-called “reciprocal” #Tariffs, while delayed, are still a threatening overhang.
On the macro front, #ConsumerConfidence and sentiment metrics fell -8% in April despite a little rebound from lows mid-month. Meanwhile, new private employment data is already showing a bigger slowdown than expected in #LaborMarkets.
Finally, the Q1 GDP initial estimate was surprising already negative－and this was before the massive tariffs were announced. This will likely boost #Recession odds.
While markets are betting on a quick recovery, the economic data currently isn’t pointing that way.
⏱️ May Deadline
Looking forward into May, we see the #Tariffs deal timer steadily ticking down. Rampant reports of empty ships and trucks lends credibility to chatter that we may start seeing empty shelves in the next few weeks. The White House keeps promoting progress with #Tariffs deals, but the most impactful negotiation with China appears to not have even started.
Again, a China #Tariffs deal is what markets are betting on. Investors are expecting someone to cave. However, the longer it drags out, we could also see markets reverse as investors jump ship.
Given its backwards looking nature, economic data will be important in May as it’ll be a first glimpse into how the economy is reacting to the #Tariffs. Friday’s jobs report will likely be an important one to gauge how #LaborMarkets are reacting. We’ll also be focused on the mid month consumer sentiment data for a peak into the #ConsumerConfidence mindset.
With markets in April almost fully recovered, we see a lot of that risk now just shifted to May. We see the #Tariffs deescalation talk as a positive, but has a long way to go still to not trigger a #Recession.
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The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.
Original Photo by fauxels.