Market Musings 4/22/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Markets surge on the prospect for a China #Tariff deal
Markets sharply rallied Tuesday on optimism for deescalation of the #Tariffs trade war with China.
So what happened?
The Treasury Secretary hinted at China tariff progress. He noted the #Tariffs were “unsustainable” for both countries and expects deescalation. Later, the Press Secretary added the White House was looking to negotiate a deal with China.
After the recent crash following Fed Chair Powell’s warning last week, markets jumped on the first sign of positive #Tariffs news. Markets popped 2.5%－fully recovering and more from Monday’s drop.
Then, Tuesday aftermarket, more positive news was announced…
First, the White House said it was not planning to attempt to fire Powell before his term’s up next year.
Powell had warned US #Tariffs policy would likely slow growth and increase #Inflation which led the White House threatening his removal. Markets very negatively reacted to the prospect of removing Powell for political reasons with the US dollar continuing to weaken.
Second, the White House also expects China’s 145% #Tariffs to “come down substantially”.
While trade deals are supposedly being worked out with other countries, the White House’s laser-focused #Tariffs trade war with China was still the elephant in the room. This announcement backs up the comments made earlier in the day that negotiations with China may start. After a week with almost daily retaliation announcements, this is another positive step towards macro stability.
And, finally, more on the domestic front, Elon Musk confirmed on Tesla’s earnings call that he’ll be shifting from his government work in May. Markets were also likely bolstered hoping for the prospect of less federal restructuring going forward as well. The market doesn’t generally do well with the uncertainty that it was causing.
Market futures are currently solidly green－hopefully signaling another green day Wednesday (but obviously not guaranteed).
While we’re cautiously optimistic for trade deal progress, both the US and China’s #Tariffs are still in place. We still see near-term pain for companies without the ability to plan and still expect more conservative outlooks this earnings season.
However, the shift in the news cycle tone may stabilize and even lift #ConsumerConfidence－bolstering consumer spending plans.
Overall, #Recession odds are high with forecasts still around 50/50. As always, we’re monitoring for new developments where that could change…
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As of the publish date, Ursa portfolios do not own Tesla with no plans to open any new positions in the next 5 days.
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 Pixabay.