ANGLES, from Anglia Advisors
ANGLES.
Turbulence.
0:00
-7:56

Turbulence.

04/06/2025. Catch up with all you need to know from the entire week in financial markets in less than ten minutes every Sunday by reading or listening to my easily-digestible weekly market review.

Markets began last week as they had finished the previous one, in a world of pain. This was always going to be Tariff Week with Wednesday the key day of announcements, but the prospect of any walk-back of any kind diminished by the hour and the looming reality of tariff turbulence, its inevitable stagflationary effect and a resulting body blow to stock markets really began to set in.

Asian and European markets sold off heavily on Monday, the last day of an exhausting quarter (see my Q1 2025 Market Review). This set up another harrowing day for Wall Street which was in full risk-off mode at the open.

Some bottom-fishing after lunch pulled the indexes back to close to flat on the day, but the buy-the-dip mentality has resulted in a punch in the face for investors lately and would prove to be so again. Traders were glad to see the back of March, the worst month and quarter for stock indexes since 2022.

New month, new quarter, same angst on Tuesday, April Fools Day. Even on Tariff Eve, upcoming policy was still shrouded in mystery, leaving markets frustrated and fatigued, with no playbook on how to proceed. Like deer in headlights, traders seemed frozen, not really knowing how to react in preparation and the indexes bounced around within a narrow range for the whole session, eventually finishing the day a touch higher.

Possibly the most consequential single day for stock markets in many years finally dawned on Wednesday although, interestingly, the details of the tariffs were not going to be made available until 4pm ET, right when stock markets close. Conventional wisdom was that tariffs below 10% could see a relief rally, 10-15% .. probably status quo and 20%+ .. look out below.

Wall Street strapped in for a day of theories, rumors and leaks but nothing even resembling clarity emerged during opening hours. The outcome was a modest, unconvincing drift higher into the close, but all bets were going to be off at 4pm ET.

In a rambling address in the Rose Garden at the White House, Trump announced a baseline blanket tariff rate of 10% on all imports to start on April 5th and additional levies to take effect on April 9th on dozens of “bad actor” specific countries and regions (China 34%, Japan 24%, South Korea 25%, Taiwan 32% and the EU 20% were among the highlights), bringing to an end a decades-old era of globalization.

Importantly, he failed to mention any carveouts, exemptions or off-ramps. This was all at the worst case end of the spectrum of market expectations and US stock prices plunged in the after-market.

With the China tariff rate now at a stacked cumulative 54% (in fact, 79% if they keep buying oil from Venezuela) and other Asian nations singled out for particularly harsh treatment, local stock markets were brutalized. When their turn came, European stocks also melted down and New York traders woke up to a sea of red on their blood-spattered trading screens on Thursday morning.

The carnage spared no-one. Stocks, crypto, interest rates, the US Dollar, oil etc. all crapped out. Just about the only thing that was higher was the analyst probability of a coming self-inflicted recession in America.

Within seconds of the opening bell, almost $2 trillion was wiped off US stock market values with the so-called Magnificent Seven (who collectively generate 50%+ of their revenues from outside the US) looking anything but, as they once again led the charge lower on colossal trading volume.

Things went from bad to worse as the day progressed with pretty much unanimous feedback from financial market professionals, analysts, independent economists and international trade agencies that tariffs at these levels were a disaster for the US economy. The stock indexes had their worst single session since the horrific early days of COVID in 2020.

There was no relief on Friday as Asia and Europe dumped again. China responded with a 34% tariff on American imports, effective April 10th. And as if there wasn’t enough going on over here, there was also the small matter of a critical pre-market Jobs Report which showed a much higher than expected 228k new payrolls added in March and an unemployment rate of 4.2%. Under normal circumstances, this would have cheered the market somewhat but the numbers were utterly overwhelmed by tariff market panic and deemed to be “out of date” already given the seismic changes that we are undergoing.

US markets were massacred yet again. Indeed, the annihilation was even worse than the previous day. The NASDAQ, which hit a new all-time record high just a few weeks ago, fell into an official bear market and the S&P 500 isn’t too far behind doing the same. Fed chairman Powell came out said the damaging economic impact of new tariffs is likely to be significantly larger than previously expected and that the central bank must make sure that doesn’t lead to a growing inflation problem. Translation? .. Stagflation could be on the horizon.

Wall Street intensified its freakout after hearing what Powell had to say and stocks went into free fall as traders sold pretty much anything they could get their hands on, but reserved a special place in hell for - you guessed it - Big Tech/Mag 7/AI stocks (Tesla lost 10% of its total value in 390 minutes) as well as the banks. The indexes finished at the lows of the day.

One of the notable things about the ongoing rout was the fact that the US Dollar was also tumbling. That isn’t how it typically works. In bouts of volatility, the US Dollar tends to do well, serving as a safe haven. It may be reflecting that investors are starting to question American economic exceptionalism under this administration.

Bloodied and bruised, traders staggered home on Friday evening having experienced a historically savage week during which the S&P 500 shed about 10% on record-breaking volume with little sign of the cavalry arriving on Monday morning.

On the upside, bonds are doing their job in providing a ballast in properly-allocated portfolios. Interest rates are diving lower (see INTEREST RATES and FEDWATCH INTEREST RATE TOOL below) with investors shifting from equities to fixed income, pushing bond prices higher. This is in marked contrast to 2022 when both asset classes fell in unison for one of only a handful of times in the last hundred plus years.


If you are not yet a client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.


ARTICLE OF THE WEEK ..

“Real freedom isn’t just about having more hours in the day—it’s about having both the resources and the purpose to make those hours count.” What financial freedom actually means. The Ski Bum Paradox.

.. AND I QUOTE ..

“The narrative is moving from US exceptionalism to US alienation.”

Kok Hoong Wong, head of institutional equities sales trading at Maybank Securities in Singapore.

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing U.S. sector: Consumer Defensive (two biggest holdings: Costco, Procter & Gamble) for the second week in a row ⬇︎ 4.4% for the week

Last week’s worst performing U.S. sector: Technology (two biggest holdings: Apple, Microsoft) for the third week in a row ⬇︎ 16.5% for the week


  • SPY, the S&P 500 Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest U.S. companies. Its price fell 10.0% last week, is down 13.8% so far this year and ended the week 17.6% below its all-time record closing high (02/19/2025).

  • IWM, the Russell 2000 Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest U.S. stocks. Its price fell 9.0% last week, is down 18.0% so far this year and ended the week 21.7% below its all-time record closing high (11/08/2021).


INTEREST RATES:

  • FED FUNDS * ⬌ 4.33% (unchanged)

  • PRIME RATE ** ⬌ 7.50% (unchanged)

  • 3 MONTH TREASURY ⬇︎ 4.28% (4.33% a week ago)

  • 2 YEAR TREASURY ⬇︎ 3.68% (3.89% a week ago)

  • 5 YEAR TREASURY ⬇︎ 3.66% (3.98% a week ago)

  • 10 YEAR TREASURY *** ⬇︎ 4.01% (4.27% a week ago)

  • 20 YEAR TREASURY ⬇︎ 4.44% (4.65% a week ago)

  • 30 YEAR TREASURY ⬇︎ 4.41% (4.64% a week ago)

Treasury data courtesy of ustreasuryyieldcurve.com as of the market close on Friday.
* Decided upon by the Federal Reserve. Used as a basis for interbank loans and for determining high yield savings rates.
** Used as a basis for determining many consumer loan rates such as credit cards, home equity and auto.
*** Used as a basis for determining mortgage rates.

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

  • ⬇︎ 6.64%

One week ago: 6.65%, one month ago: 6.60%, one year ago: 6.82%

Data courtesy of: FRED Economic Data, St. Louis Fed as of last Thursday.

FEDWATCH INTEREST RATE TOOL:

Where will the Fed Funds interest rate be after the next rate-setting meeting on May 7th?

  • Unchanged from now .. ⬇︎ 67% probability (84% a week ago)

  • 0.25% lower than now .. ⬆︎ 33% probability (16% a week ago)

What is the most commonly-expected number of remaining 0.25% Fed interest rate cuts in 2025?

  • ⬆︎ 4 (up by one from a week ago)

All data based on the Fed Funds interest rate (currently 4.33%). Calculated from Federal Funds futures prices as of the market close on Friday. Data courtesy of CME FedWatch Tool.

FEAR & GREED INDEX:

“Be fearful when others are greedy and be greedy when others are fearful.” Warren Buffet.
The Fear & Greed Index from CNN Business can be used as an attempt to gauge whether or not stocks are fairly priced and to determine the mood of the market. It is a compilation of seven of the most important indicators that measure different aspects of stock market behavior. They are: market momentum, stock price strength, stock price breadth, put and call option ratio, junk bond demand, market volatility and safe haven demand.
Extreme Fear readings can lead to potential opportunities as investors may have driven prices “too low” from a possibly excessive risk-off negative sentiment.
Extreme Greed readings can be associated with possibly too-frothy prices and a sense of “FOMO” with investors chasing rallies in an excessively risk-on environment . This overcrowded positioning leaves the market potentially vulnerable to a sharp downward reversal at some point.
A “sweet spot” is considered to be in the lower-to-mid “Greed” zone.
Data courtesy of CNN Business as of Friday’s market close.

WWW.ANGLIAADVISORS.COM | SIMON@ANGLIAADVISORS.COM | CALL OR TEXT: (646) 286 0290 | FOLLOW ANGLIA ADVISORS ON INSTAGRAM

This material represents a highly opinionated assessment of the financial market environment based on assumptions and prevailing information and data at a specific point in time and is always subject to change at any time. Although the content is believed to be correct at the time of publication, no warranty of its accuracy or completeness is given. It is never to be interpreted as an attempt to forecast any future events, nor does it offer any kind of guarantee of any future results, circumstances or outcomes.
The material contained herein is not necessarily complete and is also wholly insufficient to be exclusively relied upon as research or investment advice or as a sole basis for any financial decisions, including investment decisions or making any kind of consumer choices, without further consultation with Anglia Advisors or other qualified Registered Investment Advisor. The user assumes the entire risk of any decisions made or actions taken based in whole or in part on any of the information provided in this or any Anglia Advisors communication of any kind.
Under no circumstances is any of Anglia Advisors’ content ever intended to constitute tax, legal or medical advice and should never be taken as such. Neither the information contained or any opinion expressed herein constitutes a solicitation for the purchase of any security or asset class. No client advice may be rendered by Anglia Advisors unless or until a properly-executed Client Engagement Agreement is in place.
Posts may contain links or references to third party websites or may post data or graphics from them for the convenience and interest of readers. While Anglia Advisors might have reason to believe in the quality of the content provided on these sites, the firm has no control over, and is not in any way responsible for, the accuracy of such content nor for the security or privacy protocols that external sites may or may not employ. By making use of such links, the user assumes, in its entirety, any kind of risk associated with accessing them or making use of any information provided therein.
Those associated with Anglia Advisors, including clients with managed or advised investments, may maintain positions in securities and/or asset classes mentioned in this post.

Get more from Simon Brady CFP® CETF® in the Substack app
Available for iOS and Android

If you enjoyed this post, why not share it with someone or encourage them to subscribe themselves?

Share