Week ending April 4th, 2025
From Wall Street to Main Street
Highlights from the past week
Market / Macro Economic Summary Before I begin, I would ask that as you read the below, you keep one word in mind…PATIENCE. The entirety of the markets are trying to solve how long we will be in a trade war with the world, therefore until we can resolve the tariffs we will have angst in the markets. I am an eternal optimist, and I do believe that at some point, we will find a resolution to a more equitable treatment of our trade with other counties. Until such time, it will be mandate that the we stay the course of a long term strategy. In a year, we will look back and remember these troubling times but with a degree of relief to have remained patient and invested. Markets sold off this week on the news of the tariff announcement by President Trump on April 2nd and the concurrent proclamation by China also enacting 34% reciprocal tariffs on American imports. I expect this uncertainty likely to remain in the coming weeks, I recommend investors resist the urge to make emotionally charged decisions, and instead remain resilient to the long-term investment strategy. It's important to remember that on average, the S&P 500 experiences three to four pullbacks of 5% per calendar year and one pullback of 10% per year. Additionally, pullbacks of 15% occur on average once every two years, while pullbacks of 20% or more occur about once every three years. I do believe that President Trump has not changed in mindset that the stock market is the main barometer of his success. Upon completion of the trade negotiations, I strongly believe Trump will come back to focusing on the markets and doing everything in his power to see them go higher. The Federal Reserve will not stand idle should we see signs of the economy faltering. Chair Powell said they would look to decrease interest rates should inflation (due to tariffs) start going higher. Finally, as we hope the tariffs are resolved…we start Q1 earnings reports in the coming weeks. I think this will be welcome news and we can begin to hear how the underlying economy is still doing well. Parting Thoughts Let’s keep our hope that we find some balance in trade talks and the markets should rise rather quickly to the levels we have been to recently. Regards, Erick J. Palacios, MBA Wealth/Fiduciary Advisor Plan to Prosper Wealth Management’s clients & employees will from time-to-time hold securities mentioned above. Commentary is not endorsements or recommendations of any securities.