Weekly Market Update

Weekly Market Update: Tariffs, Rate Cuts, and Economic Slowdown

As we navigate through a volatile market, several key themes have emerged that are shaping investor sentiment.

1. Tariff Concerns: President Trump's tariff policies continue to be a major concern for investors, with the latest escalation of tariffs on Mexico and Canada sparking a sell-off in stocks.
2. Rate Cut Uncertainty: The Federal Reserve's decision to pause rate cuts has created uncertainty about future monetary policy, which is weighing on investor sentiment.
3. Economic Slowdown: Recent data has highlighted concerns about economic growth, with consumer confidence plummeting and inflation expectations rising.
4. Market Leaders Under Pressure: Many of the market leaders, including Robinhood (HOOD), JPMorgan (JPM), Goldman Sachs (GS), Palantir (PLTR), Meta (META), Amazon (AMZN), Google (GOOG), Apple (AAPL), Nvidia (NVDA), Microsoft (MSFT), and Tesla (TSLA) have lost their market leadership for now, which may make it harder for the indices to make new meaningful highs in the short-term.
5. Interest Rates: The benchmark 10-year Treasury yield has fallen since the start of the year, but this hasn't given stocks much of a boost due to concerns over economic growth.

Key Takeaways:
• Investors should be cautious about the market's near-term prospects, as the indices may struggle to make new highs in the short-term.
• Economic data continues to show signs of a slowdown, which is weighing on investor sentiment.
• Tariff concerns remain a major issue for investors, and the latest escalation of tariffs on Mexico and Canada has sparked a sell-off in stocks.

Actionable Advice:
• Investors should consider taking a more neutral equity posture and slightly higher cash due to the mixed risk/reward picture.
• Those who are invested in the market should review their portfolios and consider rebalancing or adjusting their asset allocation to reflect the changing market conditions.

Stay informed, stay ahead!