Week Ending 11 April 2025
Last week we noted that For next week 2 April is the effective date of tariffs, so expect more market volatility. And we got that. What was supposed to have been Tarrific, has instead closely resembled Tarrifdemic. On Friday the S&P 500 closed at 5,074, now down in six of the last seven weeks. While Monday marked the end of the first quarter, the real action commenced after Wednesdays close when the tariffs were announced. Reaction was swift and the S&P 500 dropped 4.84% on Thursday. Before Fridays bell the jobs and unemployment numbers came in as expected, but that positive news was quickly overwhelmed by negative market sentiment and push back from China. All told, the S&P 500 closed at session lows, down 596 points and 10.5% from Wednesdays close. The last time the S&P500 had a two-day loss of greater than 10% was during COVID, when it lost 4.89% (similar to Thursdays 4.84% loss) on 11 March 2020, and 12 March 2020 when it lost 9.51%. So where do we go from here? Last week we also mentioned that a key support level for the S&P 500 is the 13 March 2025 closing low of 5,521. Were only about 1% above that now, so a close below will also be a new Year To Date low. The next concern would be a further selloff to 4,915, which is 20% off the 19 February record closing high, i.e. bear market territory. That said, the Russell 2000 and NASDAQ 100 dropped into that bear market territory this week, and the S&P 500 is just about 3% above that. So lets look back to that two day stretch in March 2020. On Friday the 13th 2020 the S&P 500 rebounded with a 9.29% gain, signaling renewed bullishness. But not so fast, as Monday saw a loss of 11.98%. So to answer the Whats next question, expect more volatility. With regard to direction, no one can predict the future, but we came back from COVID and hit a S&P 500 new record high five months later on 18 August 2020. However, from a technical perspective, instead of catching a falling knife, we prefer to see a bottom form and then get back into the market, and we are not there yet. For TSP TIPS, at the beginning of the week we recommended a reduction in the I fund allocation to approximately 50%, and then 100% cash at the end of the week. Lastly, stand by for news of an upcoming First Quarter review zoom meeting.
Week Ending 11 April 2025
Last week we noted that For next week 2 April is the effective date of tariffs, so expect more market volatility. And we got that. What was supposed to have been Tarrific, has instead closely resembled Tarrifdemic. On Friday the S&P 500 closed at 5,074, now down in six of the last seven weeks. While Monday marked the end of the first quarter, the real action commenced after Wednesdays close when the tariffs were announced. Reaction was swift and the S&P 500 dropped 4.84% on Thursday. Before Fridays bell the jobs and unemployment numbers came in as expected, but that positive news was quickly overwhelmed by negative market sentiment and push back from China. All told, the S&P 500 closed at session lows, down 596 points and 10.5% from Wednesdays close. The last time the S&P500 had a two-day loss of greater than 10% was during COVID, when it lost 4.89% (similar to Thursdays 4.84% loss) on 11 March 2020, and 12 March 2020 when it lost 9.51%. So where do we go from here? Last week we also mentioned that a key support level for the S&P 500 is the 13 March 2025 closing low of 5,521. Were only about 1% above that now, so a close below will also be a new Year To Date low. The next concern would be a further selloff to 4,915, which is 20% off the 19 February record closing high, i.e. bear market territory. That said, the Russell 2000 and NASDAQ 100 dropped into that bear market territory this week, and the S&P 500 is just about 3% above that. So lets look back to that two day stretch in March 2020. On Friday the 13th 2020 the S&P 500 rebounded with a 9.29% gain, signaling renewed bullishness. But not so fast, as Monday saw a loss of 11.98%. So to answer the Whats next question, expect more volatility. With regard to direction, no one can predict the future, but we came back from COVID and hit a S&P 500 new record high five months later on 18 August 2020. However, from a technical perspective, instead of catching a falling knife, we prefer to see a bottom form and then get back into the market, and we are not there yet. For TSP TIPS, at the beginning of the week we recommended a reduction in the I fund allocation to approximately 50%, and then 100% cash at the end of the week. Lastly, stand by for news of an upcoming First Quarter review zoom meeting.