Weekly Market Commentary April 28, 2025 The Markets How’s everybody feeling? If you said, “Not great,” you’re not alone. There is an abundance of negative sentiment today. Many people – from consumers to small business owners, and from asset managers to investors – are feeling less optimistic. Here’s the data. · The University of Michigan’s Consumer Sentiment Survey’s final data for April showed that sentiment tumbled for the fourth month in a row. “While this month’s deterioration was particularly strong for middle-income families, expectations worsened for vast swaths of the population across age, education, income, and political affiliation…Labor market expectations remained bleak. Even more concerning for the path of the economy, consumers anticipated weaker income growth for themselves in the year ahead. Without reliably strong incomes, spending is unlikely to remain strong amid the numerous warning signs perceived by consumers,” wrote Surveys of Consumers Director Joanne Hsu. · The National Federation of Independent Business (NFIB) Small Business Optimism Index fell from February to March, settling just below its long-term average. “The implementation of new policy priorities has heightened the level of uncertainty among small business owners over the past few months. Small business owners have scaled back expectations on sales growth as they better understand how these rearrangements might impact them,” stated NFIB Chief Economist Bill Dunkelberg. · The Bank of America Global Fund Manager Survey showed that, in April, asset managers were the most bearish they’ve been in three decades with sentiment around economic growth particularly low. “Fund managers are extremely gloomy, with 82 [percent] of respondents…expecting the global economy to weaken,” reported Michael Msika of Bloomberg. · The American Association of Individual Investors (AAII) Sentiment Survey found that 55.6 percent of investors were feeling bearish about how the stock market will perform over the next six months. That is well above the historic average of 31 percent bearish. It’s fair to say that sentiment has been at extremely low levels. A contrarian would point out that this could be a positive development. When everyone is bearish, contrarians are bullish. They tend to look for opportunities to augment portfolio holdings with attractively priced investments that may help achieve long-term goals. If you don’t share a contrarian outlook, stay focused on the importance of remaining invested as stock and bond markets move higher and lower. “All of this chaos underlined something that is historically true for the stock market – the sharpest percentage drops and largest percentage gains are often not far apart. For that reason, walking away from the market after a big drop could mean missing out on the market’s best days,” reported Gordon Gottsegen of MarketWatch. For example, major U.S. stock indexes fell by more than two percent last Monday but, by the end of the week, the indexes had recovered those losses and moved higher. There were two drivers behind last week’s gains. The first was hope for a resolution in the U.S.-China trade war and the second was renewed confidence that Federal Reserve Chair Jerome Powell will remain in his position, reported Connor Smith of Barron’s. Yields on longer maturities of U.S. Treasuries moved lower over the week. | 
