In February, after the administration announced Tariffs on China, Mexico, and Canada, many US business owners decided to front-end load import purchases to potentially avoid Tariffs.
This helped cause GDP to be negative in the first quarter at -0.3% since Imports are viewed negatively within the GDP calculations.
For the S&P 500, both February and March were negative overall for a 10% loss, and that quickly accelerated to a 20% loss in early April after new Tariffs were announced.
As April progressed, news of Tariff negotiations helped stocks recover a significant portion of the losses, but they still finished in the red.
Short-Term Outlook: Uncertainty Amid Tariff Talks
So, where do we go from here? In the very short term, it’s almost impossible to say because so much depends upon Tariff negotiations.
While past performance cannot predict future performance, we wanted to share that last week the US Stock Market experienced a Zweig Breadth Thrust, which is a long-term indicator.
It potentially represents a change in the stock market for the better. It’s a rare occurrence, but 100% of the time it has happened previously, the stock market made money and on average rose 14.8% within 6 months and 23.4% on average within 12 months.
You can read more about it here: Investopedia – Zweig Breadth Thrust
That is one of many indicators that we are watching that, in our opinion, could signal the potential for higher stock market values in 6-12 months.
Mid-Term Elections and Policy Shifts
It is our belief that most politicians want to stay in power. Because you cannot switch the economy from bad to good like a light switch, we believe that the most likely outcome is that the current administration will continue to work on tariffs for the next 3–6 months.
After that, it will likely begin focusing on window dressing the economy and stock market ahead of the mid-term elections in the fall of 2026.
Anything can happen, and this administration is harder to predict than most, but we believe the most likely outcome is a recovery in stocks over the next 12 months.
Staying the Course
While being down year to date is not what anyone was hoping for, we’re still cautiously optimistic that 2025 will end the year positively based upon the data we’ve been sharing in the past few market commentaries, which you can review at either of the links in our blog or on YouTube below.
Please keep in mind that we offer managed portfolios, and we would be happy to discuss them with you. If our research and charting indicators say that lowering risk is prudent, we’ll automatically look to reduce risk.
Speak With a Trusted Advisor
If you have any questions about your investment portfolio, retirement planning, tax strategies, our 401(k) recommendation service, or other general questions, please give our office a call at (586) 226-2100.
Please feel free to forward this commentary to a friend, family member, or co-worker. If you have experienced any changes to your income, job, family, health insurance, risk tolerance, or overall financial situation, please call us so we can discuss them.
We hope you learned something today. If you have any feedback or suggestions, we would appreciate hearing from you.
Sincerely,
with contributions from Robert Wink, James Wink, Zachary Bachner, James Baldwin, and Daniel Ladzinski
Sources
- U.S. GDP contraction in Q1 2025:
https://finance.yahoo.com/news/us-economy-contracts-at-03-rate-in-q1-first-gdp-pullback-in-3-years-123544859.html - S&P 500 Index Performance:
https://finance.yahoo.com/quote/%5EGSPC/ - Zweig Breadth Thrust Indicator Explanation:
https://www.investopedia.com/stocks-trigger-100-percent-accurate-bullish-signal-zweig-breadth-thrust-11722168′
Expanded Resources for Summit Clients:
At Summit Financial Consulting, we’ve spent years developing high-quality financial planning resources to help guide and educate our clients.
- Visit Our Blog: where you’ll find timely articles on a wide range of topics, such as the SECURE Act 2.0, responsible credit card use, tariffs, preparing financially for parenthood, pros and cons of side hustles, and much more.
- Subscribe to Our YouTube Channel: Our YouTube channel features short, informative videos on topics such as the five steps to budgeting, car buying tips, cybersecurity reminders, and HSA strategies.
- View and subscribe here: https://www.youtube.com/@SummitFinancialConsultingLLC
- We especially recommend this timely piece: “Should I Move to Cash?”
- Listen to Our Weekly Podcast: Our new podcast, Money Talks with Summit Financial, is updated weekly and available on all major platforms, including:
Notes & Disclaimer: Investment advisory services are offered through Summit Financial Consulting LLC, an SEC registered investment advisory firm. Summit Financial Consulting Investment Advisory Firm Representatives do not render tax, legal, or accounting advice. Life/Annuity Insurance products and services offered by the individual insurance agent. Health insurance is offered through Summit Health Services, LLC and Property/Casualty (P&C) Insurance is offered through Summit Insurance Services, LLC and our local P&C agency partners. Please update Summit Financial Consulting LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting investment advisory services account is provided to you annually, but additional copies are available upon request. Investing involves risk, including the risk of a total loss. Stock market indices, like the S&P 500 Index, are unmanaged groups of securities considered to be representative of the stock market in general or subsets of the market, and their performance is not reflective of the performance of any specific investment. Investments cannot be made directly into an index. Historical returns data are calculated using data provided by sources deemed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. Dividends are not included in index returns. This information is provided “AS IS” without any warranty of any kind. Past performance is no guarantee of future results. Representatives of Summit Financial Consulting LLC offer tax preparation services through Summit Tax Services. Summit Tax Services is a DBA of Heemer Klein & Company and they are owned and operated independently.