April 6, 2025
Weekly Market Outlook
By Geoff Bysshe
The end of last week was one of the most tumultuous two days in the market in decades for price action, fiscal policy, and uncertainty among investors.
However, let’s start with the good news.
U.S. companies and citizens are extremely resourceful and have a history of finding solutions to tough situations. This country is in a tough situation, and we’ll find a solution.
As tactical, active investors, our objective is to adapt to this new economic and geopolitical environment by mitigating the risks and drawdowns of initial shocks and position ourselves to capitalize on the winning trends that will emerge in the future.
To be clear, the tough situation (among many), that I’m focused on is an unprecedented fiscal policy with respect to tariffs.
Following the Wednesday evening announcement of the new tariffs, the market lost $6.6 trillion in value in the following two days.
In the two charts below, you can see the size of the weekly change in the S&P 500 relative to weekly changes dating back to 1994.
Weekly Percent Changes Since The Great Recession
Perspective Back To The Dot.com Bull and Bear Markets
As you can see, it was an extraordinary week. Unfortunately, it also represents a market where price action, investor sentiment, and consumer sentiment have deteriorated from bad (as we wrote about last week) to worse.
This was demonstrated by;
In short, despite the well telegraphed intentions to implement an unusually tough tariff policy, the world found it to be worse than expected.
Markets hate “worse than expected.”
Markets don’t like uncertainty. Many investors were hoping for a “sell the rummer, buy the news event,” in which case bad news is greeted with buying because the news defines and creates certainty around the “worst case” scenario and news flow can then change from getting worse to getting “less bad.”
Opportunistically thinking, the best tactical “buying opportunities” occur when market sentiment shifts from “the worst” to “less bad”. We are not there yet, but for the nimble investor, this should be a key focus, and we will seek to identify that point in time when it arrives.
Additionally, there is a belief that if Trump were to take action that would make the tariff policy less extreme, it would create a “less bad” event capable of slowing, if not reversing, the markets’ decline.
Hoping for a more lenient tariff policy by Trump, however, is part of what led to the shock of Wednesday’s announcement and is not an investment strategy.
In this week’s market analysis video, we look at the state of the market from several perspectives that help identify when a major market decline may bottom.
As you can see in the table below, 2025 has gotten off to a historically bearish start, however, there is precedent for tactical, active investors to remain optimistic that such a decline will lead to significant opportunities.
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 Every week we review the big picture of the market's technical condition as seen through the lens of our Big View data charts.
The bullets provide a quick summary organized by conditions we see as being risk-on, risk-off, or neutral. The video analysis dives deeper. |
Summary: Markets sold off hard as they processed the new round of tariffs and potential retaliation, spiking volatility to the highest in five years and hitting extreme oversold levels in equities. Mean reversion is possible, but too early to tell and given the continued headline risks, continued caution is warranted.
Risk On
Neutral
Risk Off
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