Market Snapshot
By the Numbers
- The S&P 500 fell 0.8% in April, the Dow Jones Industrial Average fell 3.2%, and the Nasdaq rose 0.9%. Year-to-date, the S&P 500 has declined 5.3%, the Dow 4.4%, and the Nasdaq 9.7%.
- The Bloomberg U.S. Aggregate Bond index gained 0.4% in April and is up 3.2% year-to-date. The 10-year Treasury yield ended the month at 4.16%, but was as low as 3.99% and as high as 4.49% over the month.
- The U.S. dollar index fell 4.5% to end the month at 99.5, near a three-year low.
- The Consumer Price Index rose 2.4% in March compared to the prior year, slower than expected and the lowest reading since last September.
- Retail sales fell 0.9%, including a 1.9% decline in non-store retail sales (i.e., online shopping). The household savings rate rose slightly to 4.6% but is still below the historical average of 6.2%.
- The economy shrank slightly with GDP falling 0.3% in the first quarter, the first decline since Q1 2022. A significant increase in import activity drove this decline.
- $9.2T of current $36.2T national debt will mature in 2025 and likely face higher interest rates on replacement issues.
- The currently proposed budget in Congress is projected to add $5.8T of debt over the next 10 years.
- Container ship bookings have fallen after a spike attributed to Q1 stock-piling of pre-tariff imports.
“Never bet against America.” – Warren Buffet, 2021
First things first. This is purely a financial and economic treatise regarding the month of April. It is not a commentary on public policy decisions but does attempt to address their impacts to investors and inform reasonable decision-making.
We remain long-term believers in Warren Buffet’s belief shared with Berkshire Hathaway shareholders in 2021, “Despite some severe interruptions, our country’s economic progress has been breathtaking. Our unwavering conclusion: Never bet against America.” We think it’s fair to say April has provided “some severe interruptions” for investors, but not enough to shake our long-term view.
Unnecessary Uncertainty
Erratic tariff policies and threats to the independence of the Federal Reserve rattled investors globally in April. At 5,569, the S&P ended the month down only 0.76%, but traveled some 2,220 points over 30 days, finding an 11% monthly low on April 8 before a 90-day pause restored some confidence. The markets struggled with the lack of clarity more than the policies themselves, with a wide range of ripple effects denoted in the By the Numbers column.
While we retain our long-term faith in the markets, caution is warranted today. The bond markets have behaved atypically during the stock selloff: Treasury yields rose, and the US dollar fell, with some economists concerned about US stability and credibility. Inflation expectations are rising, and consumer sentiment is below COVID and Great Recession levels. Consumers are fearful, but they remain employed (so far). We will be watching the jobs reports very closely for signs of weakness.
To be sure, there is a data lag. The Q1 2025 negative GDP report is premature and skewed heavily by importers ‘front-running’ the tariffs. Container ship traffic spiked pre-tariff and is now receding. Domestic airlines have revised air travel projections lower on the conjecture that international tourists are opting for destinations other than the US. Strange times, indeed.
International Diversification
After lagging the United States for a number of years, international stocks, led by Europe, have delivered strong value so far in 2025. With the MSCI EAFE index up 10.14% YTD, investors are reminded again that exposure to a range of asset classes can provide improved stability of portfolio returns.
Bonds
You may have read about some distress in the bonds in mid-April. This was primarily a by-product of distortions in the US Treasury market which briefly threatened some technical, but critical, liquidity functions of the credit markets. These were not threats to bonds themselves, or any meaningful rise in default risk. Our positive view of bonds has only increased in the uncertainty: they are again ‘behaving’ as reasonable counterweights to equity gyrations and have held up nicely in 2025. We expect this to continue, and you may see us asserting a more confident weight to them in your portfolios.
China & US Treasuries
There seems to be a widely held belief that China holds a very large portion of the $36.2T of outstanding US Treasuries. In reality, as seen in the accompanying chart, they own a modest 2.2%. Their ability to manipulate the US Treasury market is very limited and attempts to do so would hurt the value of their holdings, so we do not view this particular risk as meaningful.
Chart of the Month
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The views expressed represent the opinions of Tiller Private Wealth as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.
Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website. Past performance is not a guarantee of future results.
The market indices discussed are unmanaged. Investors cannot directly invest in unmanaged indices.
The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The market index is unmanaged.
The NASDAQ Composite Index is an unmanaged, market-weighted index of all over the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.
The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
Data sources: Clearnomics, YCharts, The Wall Street Journal, Charles Schwab Asset Management, The Economist, Committee for a Responsible Federal Budget, JPMorgan, US Treasury Department, & US Federal Reserve.