Temporarily Interrupted

Market Commentary – April 21, 2025

Trump’s tariffs are continuing to cause volatility in the markets, and we suspect this will continue for a few more months.

The good news is that the current pullback is holding the secular bull market uptrend; the bad news is that the April 7th lows of the market will need to be tested. This is where we get volatility, and lows take time to test, which can range from one month to four months. We do have high confidence that the lows will be successfully tested and, within the next twelve months, the S&P 500 will be at new record highs. One important indicator that supports this viewpoint is how extremely bearish sentiment has become – even on a global scale. The Bank of America April Fund Manager Survey (FMS) shows sentiment — based on growth expectations, cash levels, and equity allocations — dropped to its fifth-lowest reading in the survey’s 25-year history. The other four lows were set in 2001, 2009, 2019, and 2022. Each of those proved to be a major buying opportunity — not a moment to ‘sell and go to cash.’ Bear markets are fueled by bad news, and market bottoms are set on bearish news, not positive news. For investors, patience remains a powerful virtue.