The Weekly Wire - A Tentative Respite Amid Ongoing Uncertainties

• U.S. equities experienced a notable recovery last week, with the S&P 500 gaining over 2% and the Nasdaq surging more than 6%, driven by optimism that the Fed Chair may serve out his full term and over potential easing of U.S.-China trade tensions.
• Despite the market rally, consumer sentiment declined sharply, reaching its lowest level since June 2022. Inflation expectations also rose, with 12-month projections hitting 6.7%, the highest since 1981, indicating ongoing concerns about rising prices. ​
• Looking ahead, it is a big week for key economic indicators and corporate earnings reports. This includes 1Q GDP, key inflation data (PCE), and Friday’s April employment data (expectations of 130k new jobs and 4.2% unemployment rate). Also, corporate earnings season continues, including key reports from four of the Magnificent Seven (Amazon, Apple, Meta, and Microsoft).
   

Last Week in the Markets

After weeks of volatility, markets found some footing last week. The S&P 500 rebounded by 5%, the Dow Jones Industrial Average rose nearly 3%, and the Nasdaq surged higher by almost 7%, buoyed by hopes of easing trade tensions and selective tariff rollbacks. It was the second-best week of the year for the S&P 500.

Early last week, markets received a boost following President Trump's assurance that he has "no intention" of firing Federal Reserve Chair Jerome Powell, despite prior criticisms of Powell's reluctance to lower interest rates. More significantly, the trade landscape showed signs of subtle change. President Trump's remarks about reducing tariffs on Chinese imports contributed to this positive sentiment. In addition, China quietly lifted tariffs on certain U.S. semiconductors, signaling a selective easing amid ongoing trade tensions. While this does not mark a full resolution, it offers a glimmer of hope in an otherwise tense trade environment.

It was a great week for global markets. Every major asset class except commodities gained. For the year, diversification continues to shine. Year-to-date, international stocks continue to strongly outperform U.S. markets, and real assets like commodities and gold have provided a ballast to diversified portfolios.​

 
 

Economic Indicators: Mixed Signals

Consumer sentiment took a hit, dropping to its lowest level since June 2022, reflecting concerns over inflation and economic stability. Inflation expectations have risen, with 12-month projections reaching 6.7%, the highest since 1981.

When it comes to corporate earnings, 36% of companies have now reported first quarter earnings. Analysts are currently projecting ~10% earnings growth for 2025, down from around 15% coming into the year.
 

Looking Ahead: Key Economic Data and Earnings

The upcoming week is packed with critical economic data. First-quarter GDP is released this Wednesday. Consensus expectations are for modest growth at +0.4%, but the Atlanta Fed's GDPNow model estimates a -2.5% contraction in Q1 2025 GDP. Also, the “Fed’s favorite inflation indicator,” Core PCE, is also released Wednesday. Headline PCE is expected to be 2.2% while Core PCE is expected to be 2.5%. Arguably the week’s most important release is Friday’s all-important April non-farm payrolls jobs report scheduled for release on Friday, May 2. Current expectations are for job growth of 130k new jobs and an unemployment rate of 4.2%.​

Earnings season continues, with four of the Magnificent Seven companies (Amazon, Apple, Meta, and Microsoft) set to report. Their results will offer valuable insights into corporate health and the potential impact of trade policies on business performance.​
 

Final Thoughts

In times of heightened uncertainty, it is essential to stay grounded. Diversification remains a key strategy, helping to mitigate sector-specific risks. While market volatility can be unsettling, maintaining a long-term perspective and adhering to a well-constructed investment plan are crucial.​

As always, while we recognize that every investor is different, we believe that staying invested, staying diversified, and staying disciplined is crucial while navigating complex market dynamics.

if you have any questions, please don’t hesitate to reach out to us at strategists@brinkercapital.com or at rusty@orion.com. Thank you for your time and trust. 
 

Key Data

Stocks, Bonds, Alternatives, and Real Assets as of April 25, 2025

Source: Morningstar

The TV Benchmark represents an average of the S&P 500, Dow Jones IA, and NASDAQ 100 return indexes. The Orion Risk Score represents risk relative to the global equity market.

Interest Rates as of April 25, 2025

Sources: MarketWatch, First Trust

Key Economic Data Last Week

Source: MarketWatch,  First Trust

Key Economic Data This Week

Source: MarketWatch