Market Update 4/16/25

Navigating the Headlines

The best place to measure the effects of the tariff chaos levied on the global economy is in the quarterly earnings reports, which started flowing this week. While it’s early in the release season, executive comments reiterate what we anticipated: corporations are having trouble offering forward guidance as they can’t anticipate input costs or consumer demand. Case in point is United Airlines’ release this morning, which offered two sets of guidance—one with a recession and one without. In all my years, I can’t remember a public company issuing two sets of guidance. As noted in my last edition, this is administration-induced chaos simply for the sake of chaos. Now, corporations are beginning to bet that this administration will be gone faster than the time required to reengineer supply chains. A corporation is designed to be perpetual; an administration is not. As your advisor, we must operate in all environments, so here’s what we’ve noticed amidst this chaos.

There seems to be a “Trump put” or floor on the market, as noted by the tariff pause last week, which propelled U.S. stocks 6% higher in one day. My understanding is that Treasury Secretary Bessent has Trump’s ear, and when Treasury rates got blown out last week, Bessent convinced Trump to pause. Investors should remember that the bond market can dictate policy, and when foreign buyers failed to show up at auctions last week, Treasury rates got blown out. Given the massive deficit, Administrations can’t operate without Treasury bond sales, and the Treasury got a rude awakening last week. So, no matter the rhetoric, there are pressure points and they can’t be ignored.

We’ve also noticed that markets are becoming anesthetized to all the tariff jargon. Tariff headlines are constant, and businesses must continue to operate regardless. If short-term announcements push stocks or bonds to extremes, take advantage of that aberration. The markets should normalize, given their efficiency.