Jim Streight

Weekly Market Insights | Markets React to White House Tariffs

by Jim Streight | Apr 7, 2025 | Weekly Stock Market Commentary

Stocks fell broadly last week as domestic and foreign markets reacted to the White House’s tariffs.

The Standard & Poor’s 500 Index declined 9.08 percent, while the Nasdaq Composite Index fell 10.02 percent. The Dow Jones Industrial Average dropped 7.86 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, lost 7.39 percent.^1,2

Under Pressure
Stocks rallied the first half of the week as markets tried to anticipate the potential impact of tariffs previously announced by the White House.³

Soon after the closing bell on Wednesday, President Trump’s new tariffs surprised markets. Global markets reacted to the news overnight.⁴

Markets opened lower on Thursday, and the selling continued through Friday. Treasuries rallied in a flight to quality as investors moved to the sidelines. The yield on the 10-year Treasury note closed Friday at 4.0 percent. Bond yields generally fall when bond prices rise.^5,6

Powell’s Speech

Federal Reserve Chair Jerome Powell gave a previously scheduled and much-anticipated speech on Friday. He explained:

The labor market is in good shape and not a significant source of inflation.
Longer-term inflation expectations are “well anchored and consistent with our 2 percent inflation goal” – despite higher expectations for inflation over the short term.
Regarding consumer sentiment, while consumers “may not feel great about the economy now, they still keep spending.” He added that the same happened during the pandemic.
The Fed’s policy stance is “well positioned to wait for greater clarity… (on the likely effects of trade and fiscal policy, for example) before considering any changes in monetary policy.”⁷

This Week: Key Economic Data

Monday: Consumer Credit.

Tuesday: NFIB Small Business Optimism Index. Treasury Buyback.

Wednesday: Federal Open Market Committee (FOMC) Minutes released. 10-Year Treasury Note Auction. Wholesale Inventories.

Thursday: Consumer Price Index (CPI). Jobless Claims. Monthly Federal Budget. Chicago Fed President Austan Goolsbee and Dallas Fed President Lorie Logan speak.

Friday: Producer Price Index (PPI). Consumer Sentiment. New York Fed President John Williams speaks.

^{Source: Investors Business Daily – Econoday economic calendar; April 3, 2025}^{The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Friday: JPMorgan Chase & Co. (JPM), Wells Fargo & Company (WFC), The Progressive Corporation (PGR), BlackRock (BLK), The Bank of New York Mellon Corporation (BK)

^{Source: Zacks, April 3, 2025.}^{Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“I never try to please a certain audience. I think that’s disastrous.”

– Charles Schulz

Get Educated on Education Credits

Two education credits are available to American taxpayers: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The IRS has lots of information about these two credits on their site, but here are some highlights you might find helpful:

The AOTC is allowed for expenses for course-related books, supplies, and equipment not necessarily paid to the educational institution but needed for attendance.
The AOTC is limited to four years, but the LLC can be claimed for as many years as you like.
To claim either credit, use Form 8863.
The AOTC is worth up to $2,500.
Your modified adjusted gross income must be $80,000 or less to claim the full credit.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁸

Healthy Roadtrip Snacks

Whether taking a short drive or heading off on a cross-country adventure, many families are packing up the car for some time away.

One of the best parts about road trips? Snacks! They aren’t always the healthiest. Luckily, you can prepare many easy, healthier snacks for your trip. Skip the chips at the gas station and try these instead:

Apples and peanut butter
Celery and peanut butter
Carrots and hummus
Homemade trail mix with nuts and dried fruit
Protein and granola bars
Nuts and seeds
Dried fruit and veggie chips

Tip adapted from Healthline⁹

I can certainly run, but I will never be able to walk by myself. Wherever I go, thoughts are close behind me. What am I?

Last week’s riddle: It can only be broken with force, yet it can be dulled by contact with a piece of paper. What is it?
Answer: A pencil.

Old Khajoo Bridge
Zayandeh River, Isfahan, Iran

Footnotes and Sources

^{1. The Wall Street Journal, April 4, 2025}

^{2. Investing.com, April 4, 2025}

^{3. MarketWatch.com, April 1, 2025}

^{4. The Wall Street Journal, April 2, 2025}

^{5. MarketWatch.com, April 3, 2025}

^{6. The Wall Street Journal, April 4, 2025}

^{7. MarketWatch.com, April 4, 2025}

^{8. IRS.gov, September 11, 2024}

^{9. Healthline, December 12, 2024}

Weekly Market Commentary

by Jim Streight | Apr 3, 2025 | Carson

The Markets

Risk-on. Risk-off.

If you read the financial press, you may have seen the terms “risk-on” and “risk-off”. When investing, there is a risk-return spectrum. Stocks typically have higher risk and higher return potential than high-quality bonds. High-quality bonds have lower risk and lower return potential than stocks, although they typically have higher risk and higher return potential than cash.

In financial speak, investors are:

Risk-on when they are excited about investing in stocks (and other types of assets that have higher risk profiles). “Risk-on environments can be carried by expanding corporate earnings, optimistic economic outlook, accommodative central bank policies, and speculation. As the market displays strong influential fundamentals, investors perceive less risk about the market and its outlook,” reported Adam Hayes for Investopedia. A risk-on environment may lead to rising stock prices.
Risk-off when they become cautious and concerned about losses. Risk averse investors may sell some types of stocks (and other types of assets that have higher risk profiles) in favor of dividend-paying stocks and more stable types of investments that can help preserve principal. Risk-off environments may arise when economic growth slows, economic uncertainty rises, company earnings slide lower, consumer confidence wavers, or financial markets experience other kinds of disruptions. A risk-off environment may lead to falling stock prices.

Last week, investors moved from a risk-on to a risk-off outlook. The change in attitude resulted from concerns about:

Tariffs. Concerns about tariffs intensified last week when “An unexpected move against car imports this week renewed warnings from economists that tariffs will almost surely raise consumer prices and harm economic growth,” reported Jeran Wittenstein and Ryan Vlastelica of Bloomberg.
Sticky inflation. Last week, the personal consumption expenditures (PCE) index, which is one of the Federal Reserve’s preferred inflation gauges, showed that headline inflation remained steady month to month and year to year. However, core inflation, which excludes food and energy prices, rose month to month and year to year.
Consumer sentiment. The final reading for consumer sentiment in March did not improve. “This month’s decline reflects a clear consensus across all demographic and political affiliations; Republicans joined independents and Democrats in expressing worsening expectations since February for their personal finances, business conditions, unemployment, and inflation,” wrote University of Michigan Surveys of Consumers Director Joanne Hsu.

During periods of market volatility, it’s important to keep a long-term perspective. Having an asset allocation strategy that reflects your risk tolerance and financial goals helps insulate your assets from market turbulence. Asset allocation helps manage risk, but it does not prevent losses

THE SILVER LINING OF MARKET DOWNTURNS. Volatile markets are challenging. Watching the value of your assets bounce higher and lower can be frustrating. In times like these, it can be helpful to focus on the opportunities that can be created by market volatility. One of those opportunities is tax-loss harvesting.

Investors “harvest” tax losses by selling an asset for less than they purchased it. Unfortunately, not every investment delivers stellar returns. Almost every investor has either owned an asset that loses value due to company underperformance or a market downturn. When the asset is sold at a lower value than its purchase price, the investor realizes a capital loss.

From a tax perspective, losses are quite valuable. They can help:

1. Minimize capital gains tax. Capital losses can be used to offset capital gains, dollar for dollar. For example, if an investor sells shares of Company A for a gain of $1 and sells shares of Company B for a loss of $1, then the loss offsets the gain.
1. Reduce taxable income today. When tax losses aren’t used to offset gains, the losses can reduce taxable income by up to $3,000. So, if an investor has a capital loss of $6,000 and a capital gain of $3,000, the capital loss could offset the capital gain and the $3,000 loss that is leftover could be used to reduce the investor’s taxable income.
1. Reduce capital gains and taxable income tomorrow. When capital losses are greater than capital gains and income reductions combined, the extra losses can be carried forward and used to offset capital gains and taxable income in the future.

The key to tax loss harvesting is that the money from the asset sale must be invested in a new opportunity – perhaps capitalizing on the chance to invest in a strong company at an attractive price, which is another benefit of market downturns. In general, the new investment should fill a similar role in the investor’s asset allocation strategy to the investment that was sold.

The silver lining of market downturns is that investment losses can be tax wins.

Weekly Focus – Think About It
“Courage is the price that life exacts for granting peace.”
– Amelia Earhart, Aviation pioneer

Sources:

https://www.investor.gov/additional-resources/information/youth/teachers-classroom-resources/risk-and-return https://www.investopedia.com/terms/r/risk-on-risk-off.asp

https://www.bloomberg.com/news/articles/2025-03-28/market-rout-starts-with-big-tech-as-tariff-inflation-fears-hit?srnd=homepage-americas or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/03-31-25-Bloomberg-Market-Rout-Intensifies%20-%203.pdf

https://www.bea.gov/sites/default/files/2025-03/pi0225.pdf [Tables 5 and 7]

http://www.sca.isr.umich.edu

https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/03-31-25-Barrons-DJIA-S&P-Nasdaq%20-%206.pdf

https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202503

https://www.irs.gov/taxtopics/tc409

https://www.today.com/life/quotes/strong-women-quotes-rcna66486

Sunny Side Down: Egg Prices Fall

by Jim Streight | Apr 2, 2025 | Carson, Most Popular

Forget the Fed frenzy and take a timeout from tariff talk. Let’s focus on what’s really scrambling the markets right now: egg prices.

After reaching an all-time high of $8.17 a dozen in early March, prices have trended lower and may drop below $3 in the coming weeks. What’s behind the sudden fall? The three main reasons are weaker consumer demand, the bird flu coming under control, and ramped-up supply.

So, when will you start to see relief at the checkout line? Soon perhaps. However, grocery store prices remain unpredictable because retailers are still a bit concerned about supply chains.

In recent months, economists have paid more attention to the price of eggs than to other constituents of the Consumer Price Index.

Why have egg prices become a proxy for inflation?

One theory is that eggs symbolize something bigger about the U.S. economy. Not only are eggs a critical, inexpensive source of protein and nutrients for millions of consumers, but they are also a core part of many other foods made at home or mass-produced. So, eggs have become a tangible symbol of how consumers believe the broader economy is doing.

The Inside Coop: Chicken prices have remained stable despite the bird flu because broilers (chicken raised for meat) tend to have a shorter lifespan than egg-laying hens (6-8 weeks compared to 2 years). Shorter life spans mean flocks are less susceptible to outbreaks, and supply-and-demand issues can be resolved quickly.

I hope today’s email provided some insights into the egg market. It’s not often such a small part of our daily life that takes center stage in economics.

^Sources:^{TradingEconomics.com, March 19, 2025. “Eggs US”}^{TheHill.com, February 13, 2025. “Egg prices are surging, so why are chicken prices stable?”}

Weekly Market Insights | Investors React to Tariff News

by Jim Streight | Mar 31, 2025 | Weekly Stock Market Commentary

Stocks moved lower last week as investors swung from exuberance to disappointment on news over tariffs and inflation.

The Standard & Poor’s 500 Index fell 1.53 percent, while the Nasdaq Composite Index retreated 2.59 percent. The Dow Jones Industrial Average slid 0.96 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, declined 1.29 percent.^1,2

An Up and Down Week
Stocks started the week with a sharp rally after the White House said it may “give a lot of countries breaks” on reciprocal tariffs. The positive momentum continued into Tuesday, with the Nasdaq and S&P 500 outpacing the Dow.³

Then, midweek, news that the White House was planning additional tariffs on all cars made outside the U.S. rattled markets.^4,5

On Friday, investors reacted to a warmer-than-expected inflation report and lower consumer sentiment, putting further pressure on stocks as the week closed.⁶

Noise vs Signal

There can be a lot of noise in the market from time to time. This can make it hard for investors to interpret information as they search for the actual signal.

Last week, investors were trying to interpret the White House decision to impose tariffs on all cars and some car parts made outside of the U.S. While some automakers are domestic and others are foreign-based, the question is whether companies will absorb the additional costs, pass them on to consumers, or look to build factories in the United States.⁷

Separating the noise from the signal may take time, which can be more challenging when the markets react to new tariff updates as they are announced.