Worst Month Since September 2022

March 31, 2025

March has typically been a quiet month, but we suggested in last month’s market update things may be different this year.  The market has been in a corrective cycle since the explosive post-election rally, and we believed the uncertainty regarding President Trump’s policies might extend that correction.  President Trump believes tariffs pave the road for economic success, but in the short run the uncertainty about what the tariffs will do to inflation and economic growth are weighing on the market.  We have seen many companies lower forward guidance due to the uncertainty and that has been pushing stock prices lower.  At the end of the month the S&P 500 was down 5.8%, its worst monthly performance since September 2022, and is now 4.6% lower this year.  Technology led the way lower with the tech heavy NASDAQ losing 8.2% in March and down 10.4% this year.  Oil prices were up 2.5% and gold continued its rally to new all-time highs, gaining another 10.3%.

The month began with continued selling of stocks involved in artificial intelligence on concerns the massive spending in that area has been overdone.  We saw additional selling when Trump announced new tariffs followed by a strong rally the next day when those tariffs were delayed.  The week ended with a government jobs report that was in line with expectations, but the S&P ended the week down 3.1%.  The selling continued into the second week with a relief rally Wednesday on news inflation declined for the first time since September.  The rally was short lived and despite a strong bounce on Friday the S&P ended the week down another 2.3% at a new 2025 low.  The focus of the 3^rd week was the Federal Reserve who decided to leave rates unchanged, but said they could see as many as 2 rate cuts this year.  The market had been expecting no additional rate cuts and investors liked what they heard sending the S&P 500 up .5% for its first positive week in 4 week. The final week began with a 2% rally after President Trump said reciprocal tariffs could be delayed or moderate.  However, the rally was quickly forgotten after he announced 25% tariffs on automobile parts not made in the U.S. The week ended with news the Fed’s favorite inflation measure; the Personal Consumption Expenditure Index, was up 2.8% in February which was above expectations.  A week that began with a strong rally closed lower as the uncertainty weighed on all indices.  The last day saw the S&P hit a 6-month low before reversing and closing higher.

April has traditionally been one of the strongest months for stocks.  Many investors make IRA contributions ahead of the Aril 15^th deadline which creates a significant flow of funds into the market.  We expect that to happen again this year, but it may be drowned out by tariff concerns.  For several months we have been concerned about rich stock valuations and have been expecting a period of adjustment, we are in that period now.  One never knows how far a correction will run until it is over, but a probusiness President in the Oval Office should be good for the economy and stocks.  In Mid-March, the S&P 500 hit a low around 5500 before bouncing 5%.  The S&P will often need to “retest” that low which it did on the last day of March, and it did bounce off that level.  A successful test of that support was a good first step towards a rebound.  There is no guarantee the successful test will be the ultimate bottom, but we did remove 50% of our hedge on the first drop to 5500 and plan to remove the remainder.  If the market were to once again continue lower, we would increase our exposure to stocks.

If you know someone who would be interested in learning more about Greenberg Financial Group, please contact us at 520-544-4909, or visit our website at www.greenbergfinancial.com. As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance. We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:00 AM to 10:00 AM on KNST AM 790.  You can also listen to us on iHeart radio, follow us on Twitter @gbergfinancial or on Facebook under Greenberg Financial Group.  Previous radio shows are available by going to www.iheart.com or using the iHeart app and typing Money Matters with Dean Greenberg.