“The stock market is a long-term game, and people who realize this make money.”
-Peter Lynch
Here’s what you need to know this week:
· Stocks recoup a large portion of the “Liberation Day” losses
· Markets attempt to parse this week’s tariff negotiations
Snapback
Markets posted one of the best individual days in decades last Wednesday due to President Trump announcing a 90-day pause on most of the “reciprocal tariffs” he announced on April 2nd. This pause does notinclude the blanket tariff of 10% on every country or the industry-specific tariffs in certain countries. Most notably, President Trump increased the tariffs on China to 145% due to China’s retaliatory tariffs of 125% on the US[1]. The combination of these tariffs means that, even including the pause, US tariffs have now risen to the highest level in more than a century:
Still, the pause on the reciprocal tariffs was enough for markets to launch upwards. The S&P 500 gained 5.7% on the week and the NASDAQ enjoyed its second-best single-day performance ever[2]. The gains last week recovered roughly two thirds of the losses from the prior week:
Tariff Negotiations
Once again I must warn that news is moving fast and this may be out of date by the time you read this. President Trump told reporters on Saturday that there would be a tariff exemption on popular consumer electronics including smartphones and computers. This exemption applies to every country including China. Trump emphasized that the exemption is not permanent and that he is currently working with domestic electronics manufacturers to determine the best targeted tariff strategy[3].
Trump told reporters to expect an announcement of a tariff policy for consumer electronics within the week. Trump has also instructed the Commerce Department to examine the pharmaceutical industry to help come up with a tariff plan on both pharmaceutical ingredients and completed drug products[4].
China has not taken the trade blows lying down. On Monday the Chinese government instructed Chinese airlines to stop deliveries of Boeing aircraft as retaliation against American tariffs. Twelve Boeing jets are currently in the process of sale to Chinese airlines, and the fate of these twelve jets has yet to be determined[5].
Despite these moves, stocks posted modest gains on Monday and are modestly up again Tuesday at the time of writing. Volatility has also receded as we are not seeing the wild upward and downward swings of the past two weeks. Markets are clearly receptive to any positive news surrounding the tariff negotiations, and it seems likely that more clarity in the trade war will bring calm back to the markets.
What Else
· President Trump sent senior aide Steve Witkoff to St. Petersburg, Russia to negotiate terms of a ceasefire with Russian President Vladimir Putin
· The price of gold notched yet another new high of $3,255/oz
· Rory McIlroy won The Master’s in a thrilling playoff finish against Justin Rose
· The 30th anniversary of the OKC bombing is this Saturday, April 19th
· The NBA playoffs begin this Friday, April 18th
· Markets are closed this Friday in observance of Good Friday
What We’re Reading
For as long as taxes have existed, people have attempted to evade paying taxes. Incredibly, archaeologists have discovered a 1,900 year old papyrus in the Judean desert that details a prosecution of two tax dodgers in the ancient Roman empire. The papyrus is so detailed that it includes names, the charges against the tax dodgers and a detailed account of their scheme. Click below to read a true legal drama set in Ancient Rome:
What’s Happening Downtown
The Scissortail Night Market returns to Scissortail Park this Friday, April 18th. This event is free to attend, runs from 5:30-10:00 PM and features more than 100 local vendors as well as food trucks, live music & dance performances and more. Click below to learn more:
To read more from our blog, click here
Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, Brandon Ingerson, Jenni Hess
Sources: [1] Yahoo! Finance [2] Yahoo! Finance [3] Bloomberg [4] Bloomberg [5] Bloomberg