Q1 2025 Market Performance Recap:
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$S&P 500(.SPX)$ : -4.6% (worst quarter since 2022)
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Dow Jones: -1.3% (relative outperformance)
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$NASDAQ(.IXIC)$ : -10.2% (tech rout) $NVIDIA(NVDA)$ $Tesla Motors(TSLA)$ $Apple(AAPL)$
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Global Markets: +6.3% (benefiting from U.S. dollar weakness and policy shifts)
Key Market Drivers: Tariffs, Trade Wars & Trump’s “Liberation Day” (April 2)
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Trump to announce new reciprocal tariffs against countries with high duties on U.S. goods.
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“Dirty 15” list of top U.S. trade partners in the crosshairs.
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Could trigger global retaliation and further market instability.
Economic Growth & Stagflation Risks
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Core PCE inflation: Still elevated at 0.4% MoM.
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Consumer sentiment: At a 2-year low, with long-term inflation expectations at a 32-year high.
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Q1 labor market data: Friday’s nonfarm payrolls will be critical for gauging economic resilience.
3️⃣ Global Equity Rotation & USD Weakness
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Investors fleeing U.S. equities for international markets.
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WSJ: “Investors are questioning whether the pullback in U.S. assets marks the start of a long-term shift.”
How to Navigate Q2 2025?
Markets
Short-Term Playbook: VIX Playbook: Stay patient, wait for high volatility before adding risk.
Defensive Sectors: Utilities, Consumer Staples, and Healthcare likely to hold up. $Consumer Staples Select Sector SPDR Fund(XLP)$
Commodities: Gold, oil, and agricultural stocks tend to outperform in stagflationary environments.
Medium-Term Outlook: UBS View: Market clarity will improve in H2 2025, making current volatility a potential buying opportunity. Sevens Report View: Uncertainty could become self-fulfilling, dragging the economy into recession.
Key Dates to Watch:
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April 2 – “Liberation Day” Tariff Announcement.
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April 5 – March Nonfarm Payrolls Report.
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Mid-April – Q1 Earnings Season Begins
Final Thought: Markets are searching for direction as Trump’s trade policies, economic data, and corporate earnings create a complex investment landscape. Will April 2 mark a turning point or just another chapter in the tariff saga?
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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.
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