This week on 7 Market Movers, Portfolio Consulting Director Aya Yoshioka discusses the “strange trifecta” going on in the markets right now and the latest comments from Federal Reserve Chair Jerome Powell. Using our 7 Market Movers framework, Aya also covers global economic growth, interest rates, inflation, fiscal policy, monetary policy, global macro risk, and investor confidence to explain what’s happening in the markets and what it means for you.

If you have further questions about how the current economy and market environment could affect your financial plan, reach out to a Wealth Enhancement advisor today.

TRANSCRIPT:

Hi, everyone. My name is Aya Yoshioka. I'm a Portfolio Consulting Director and Senior Investment Strategist here at Wealth Enhancement. Thanks so much for joining me today as we talk about what's going on in markets. You know, over the last few weeks, we've seen a strange, trifecta in markets, one where stock prices have gone down, one where bond yields have gone up, and one where, the US dollar has weakened substantially.

You know, the good news, if there is one, is that we have a short work week. Markets will be closed on Good Friday, April eighteenth, and so we will have one less day of market volatility.

So, headlines keep flashing across my desk. And when just when we thought, volatility was subsiding, we had another tough day in markets on Wednesday, April sixteenth. And, you know, the weekend really started off on a high note. We had seen, some news that perhaps some electronics were going to be exempt from, the tariffs.

And, you know, although some of that started getting walked back by the time markets opened on Monday, there was some hope that we were starting to see a little bit of reprieve, maybe some sectorial or, you know, certain products, whether it's pharmaceuticals or semiconductors, might get exempt from, some of these tariff rates.

But on Wednesday, we did hear that, from certain chip companies as well as a a semiconductor chip equipment maker, and the news wasn't that great. You know, certain chips, that had been, exported to China, were going to now be a part of export restrictions.

And so those were going to impact, some chip companies, and cost them, you know, several billions of dollars in terms of revenue.

So all of this news pressured, technology companies, and the tech sector overall. And then we also heard from, Fed chair Jerome Powell. He spoke at the economic club of Chicago, and he noted his concerns about just the overall persistency of inflation as these tariffs, work their way through the economy. And he also noted that they're in no hurry to sort of cut rates here, and I think that disappointed, market participants. I think they wanted to hear a little bit more of, you know, the Fed put and and, you know, whether or not the Fed would come to the rescue. But I think the Fed is in a tough situation.

They do see potentially pressures in the economy, but they need to see it in the labor market. So they're going to be monitoring that, quite substantially. But at the same time, if that labor market deterioration comes at a time in which inflation continues to rise and expectations for inflation to be more persistent, continue, they're going to not be able to lower interest rates as much as they would be in an environment in which there was more price stability.

So, for the week, in terms of, what's been going on in markets, you know, for the month of April, equities are down anywhere around six percent depending on whether it's small cap or large cap or the Nasdaq. And the draw downs from the February highs are in the mid-teens to about twenty percent. So that's what's concerning. I think everybody's concerned that we are definitely either in or about to enter a bear market.

On the fixed income side, you know, with the ten-year treasury, originally, the yield, on the day that the these tariffs were announced, you know, yields went down. They went from 4.2% down to 4%, so they went down twenty basis points. Then they shot back up to 4.5%, and then they've ended this week at 4.25%. So, they've had a quite a ride, quite a roller coaster ride when it comes to a ten-year treasury yield. And then when it comes to commodities, you know, oil is down, twelve and a half percent, on a month to date basis. So, for the month of April, it's down twelve and a half percent, and gold is up, seven percent in April. So a lot of large moves that we're seeing in different markets.

With that, thank you so much for joining me today. Thank you for listening, and we hope to continue to provide updates in coming weeks in which we'll talk about all seven market movers, global economic growth, interest rates, inflation, fiscal policy, and overall investor confidence. If you have any questions, please reach out to your financial adviser or to our investment management team. We hope you have a great week. Thanks so much, and Happy Easter.