CWS Market Review – April 8, 2025

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This has been the most raucous week on Wall Street since the Covid panic from five years ago. President Trump’s tariff policies have spooked investors all over the world. In two days last week, Thursday and Friday, the S&P 500 lost a combined 10.5%. If that loss had happened in one day instead of two, it would rank as the fourth worst loss of all time.

On Monday, the stock market had an especially volatile morning. In just eight minutes, the S&P 500 rallied 5.66%. It then promptly lost 4.37% over the next seven minutes. We’re talking about several trillion dollars magically appearing and disappearing during less time than a lunchbreak.

What happened? Well, that’s a good question. It appears that Kevin Hassett, the Director of the National Economic Council, was being interview on Fox News. During the interview he was asked if the president was considering a 90-day pause for his tariff policies. Hassett clearly gave a non-committal answer (“the president is going to decide what the president is going to decide.”)

Somehow someone on Twitter took that for a yes and tweeted it out. That was from a small account (less than 1,000 followers), but soon a much larger account known as “Walter Bloomberg” reposted it, and suddenly, this was taken as serious news on Wall Street.

I should add that Walter Bloomberg is not connected with Bloomberg, the financial news service. His tweet came out at 10:11 am and by 10:12 am, CNN reported that cheers erupted on the floor of the NYSE. I guess that’s a good barometer of how unpopular the tariffs are on Wall Street.

At CNBC, the anchors were completely baffled by the market’s surge and by 10:15 am, they were reporting on the news. Soon Reuters was referencing CNBC but they were only going on what Twitter was saying. Soon people were referencing people who were referencing people who were just making things up.

Here’s a minute-by-minute chart of the last five days for the S&P 500. You can really see how volatile Monday was:

The White House denied the reports and Walter Bloomberg deleted his tweet, but the damage was already done. This is a good reminder than Wall Street is a place where rumors and fake news can lead to very real panics. Financial markets are made up of normal people and they can be as volatile as anybody, if not more so, especially in the short run. It took some time yesterday for traders to realize they had been duped.

Between yesterday’s high and low, the Dow swung by nearly 2,600 points. Trading volume on Monday reached 29 billion shares which is an all-time record. The previous record was 26.4 billion shares which came on Friday.

Before the ruckus started, Wall Street was having a terrible day on Monday. At one point, shortly after yesterday’s open, the S&P 500 was trading down more than 4.7%. The market was on pace for its third awful day in a row. Measuring from the intra-day peak in February to Monday’s low, the S&P 500 lost 21.35%, making this an official bear market.

By no means will I suggest that the fear has subsided. Any big rally that starts below the 200-day moving average is considered guilty until it can prove its innocence.

This morning’s rally didn’t last either. The S&P 500 rallied by 4% then fell by 6%. Today was the fourth day in a row that the S&P 500 had a trading range of more than 5%. The S&P 500 finished the day at its lowest closing level since February 21, 2024.

Investors are still very concerned about the tariffs, and the White House is showing little signs of reversing course. The duty against China will be 104%. The tariffs are due to kick in at midnight tonight. These will be our highest tariffs since 1909; yes, even higher than Smoot-Hawley.

Every nation in the world will have a minimum 10% tariff plus half of their trade deficit. Saint Pierre and Miquelon, the two small French islands off the coast of Canada, now face 50% tariffs even though they exported a grand total of $3.4 million to us in 2023.

Treasury Secretary Scott Bessent said that 70 countries have approached the U.S. for tariff negotiations. There are hopes that a deal—any deal—can soon be reached, but there’s no concrete evidence that any deal is coming soon.

Name-calling has even broken out between Peter Navarro, a senior counselor to the president, and Elon Musk, the head of DOGE. Navarro said that Musk doesn’t make cars, he assembles them. In response, Musk called Navarro a “moron,” and “dumber than a sack of bricks.”

One of the points I’ve made about investing is that for the vast majority of the time, the stock market is pretty boring. Markets tend to go up slowly but consistently. Then, for a very brief period, markets throw a temper tantrum. In a very short time, stocks fall fast and hard.

We’re in such a period right now. In fact, we could be behind it already, but we can’t say for certain until after the fact. My guess is that we’re not done quite done yet. Today’s rally is nice, but I won’t fully trust this market until we’re well clear of the 200-day moving average.

The Jobs Market Is Still Healthy

Lately on Wall Street, there’s been a lot of talk about “hard” versus “soft” economic reports. By soft, we mean emotion-based reports like consumer confidence, economic surveys or even the stock market. By hard, we mean concrete data like jobs or industrial production. The soft reports have been quite weak, but the hard data is still holding firm.

I suspect that we’ll soon see some weakness in the hard reports. For example, I’ve always been a believer that the stock market plays a role in consumer spending. Happy stocks make for happy shoppers. When the Dow drops a few thousand points, folks get leery about buying big-ticket items.

On Friday, the Bureau of Labor Statistics released the March jobs report, a very hard data report, and it was mostly a good report. Bear in mind that this was before the stock market started to get nervous.

Last month, the U.S. economy added 228,000 net new jobs. Wall Street had been expecting a gain of 140,000. The unemployment rate ticked higher from 4.1% to 4.2%. I looked at the decimals and found that the real increase was only 0.013%.

The president posted on Truth Social, “GREAT JOB NUMBERS, FAR BETTER THAN EXPECTED. IT’S ALREADY WORKING. HANG TOUGH, WE CAN’T LOSE!!!”

The jobs gain for January was revised down 14,000 to 111,000. February was revised lower by 34,000 to 117,000. Average hourly earnings increased 0.3% last month. That was in line with the consensus.

For March, health care was the leading growth area, consistent with prior months. The industry added 54,000 jobs, almost exactly in line with its 12-month average. Other growth areas included social assistance and retail, which both added 24,000, while transportation and warehousing showed a 23,000 increase.

Federal government positions declined by just 4,000, despite the Elon Musk-led efforts, through the so-called Department of Government Efficiency, to pare the federal workforce. However, the BLS noted that workers on severance or paid leave are counted as employed. A report Thursday from consultancy firm Challenger, Gray & Christmas indicated that DOGE-related layoffs have totaled more than 275,000 so far.

The U-6 rate, which is a broader reading of unemployment, fell to 7.9%. Last month, full-time workers increased by 459,000, while part-timers fell by 44,000.

Tomorrow, the Fed will release the minutes from its most recent meeting. I’ll be curious to see how much they discussed the tariffs. On Thursday, we’ll get the CPI report for March. The last report showed that core inflation fell to a four-year low. Traders are closely divided on the need for two 0.25% Fed rate cuts coming by June. Or possibly, they see one 0.5% rate cut.

Get ready because Friday will also be the unofficial kickoff of Q1 earnings season. Several big banks and financial institutions such as JPMorgan, Bank of New York Mellon, Morgan Stanley, Wells Fargo and BlackRock are due to report. Expect the market to remain volatile.

That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Posted by on April 8th, 2025 at 6:32 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.