Market Musings 3/31/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
March tumbles as escalating #Tariffs concerns wipe out YTD gains with Q1 ending down almost -5%
Markets tumbled in March as escalating #Tariffs concern wiped out all YTD gains with Q1 ending down almost -5%.
January started the year up on optimism for a more favorable business environment. However, that optimism has completely reversed. February gave up most of YTD gains with investors still hoping the #Tariffs talk was just for bargaining. Then, trade war threats escalated further in March down -5.8% with the S&P 500 taking its biggest monthly dive since 2022.
😖 March Tariffs (again)
Tariffs were once again the focus in March, but how was it different that last month?
First, the some of the initial #Tariffs were actually imposed and expanded on. China was bumped to 20% while the global steel & aluminum #Tariffs also went into effect. Canada & Mexico #Tariffs were briefly imposed, but essentially walked back quickly. Basically, the #Tariffs and its potential impact became real vs. just chatter.
Second, other countries are retaliating. In the first round, China retaliated with their own, but Canada and Mexico folded quickly－making deals for delays. However, in the second round, Canada and Mexico were not so accommodating and nor was the EU－all threatening a trade war in return. In the upcoming third round, we expect even less inclination to negotiate and more aggressive retaliation.
Finally, #ConsumerConfidence is starting to freak out. Consumer spending drives our economy and, while incredibly resilient the last few years, #Tariffs seems to be the last straw.
😫 April Tariffs (yet again)
On Wednesday, the White House will announce a barrage of additional #Tariffs. We expect fairly quick retaliation from impacted countries in the coming days after. Negotiations will likely be harder this time as other countries are already partnering up for better leverage on retaliation.
Markets are bracing for the volatility. The best case scenario is the White House says “never mind”, but that’s unlikely. A good scenario at this point would be lower impact targeted #Tariffs which likely triggers less retaliation. We’re definitely hoping it won’t be the universal global #Tariffs that’s been rumored…
As previously mentioned, markets are near correction territory and the next couple of week will likely determine the next step in either direction. We continue to need to see the #Tariffs talk go away and the macro stabilize to get more positive near-term.
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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.