Market Commentary – March 13, 2025
Investors are understandably feeling uneasy, and with good reason—equity markets have fallen 10% over the past 20 trading days, marking the 5th fastest market decline in the last 75 years. This drop is driven by escalating tariff disputes and concerns over slowing economic growth. However, in the previous five instances of rapid market declines, we saw a rebound just one month later. In fact, 100% of these cases resulted in the stock market being higher after 3, 6, and 12 months. As a result, we believe the market has overreacted to the downside.
We don’t anticipate the tariff war will persist for too long, and if you look at the performance of the countries most impacted—Canada, Mexico, China, and Europe—they’ve actually been outperforming the U.S. stock market since February 11. As for the bond market, while many look to it for signs of a recession, bonds have held up well, reflecting the growing likelihood that the Fed will step in to provide support for both the market and the broader economy.
Emotions are understandably heightened given the uncertainty surrounding policy changes and their potential impact on economic growth. While markets are likely nearing a tradable low, the damage sustained means it will take time for a solid foundation to form. This presents a valuable opportunity to remain focused on your long-term objectives and stay the course.
Source: Fundstrat