S&P 500 Weekly Update for April 14-18, 2025

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Summary of the Members-Only Weekly Update (April 7-11, 2025):

Market Performance (April 7-11):

The market saw a volatile week with a net gain of 5.7% for the S&P, though this was a modest bounce compared to recent declines.

Other indices: NASDAQ up 7.3%, Dow up 5%, small caps up 1.8%. Year-to-date, all indices remain negative.

Volume was above average but dropped significantly by Friday, indicating reduced participation.

The Tech sector led the gains, while real estate lagged due to rising interest rates. Defensive sectors such as staples and utilities held up better.

Key Observations:

Technicals and Sentiment: The market remains technically negative, with long-term support holding but a potential "death cross" looming. Sentiment is extremely pessimistic, with the VIX still high (37 range) and individual investors bearish for seven weeks.

Inflation and Rates: CPI and PPI showed declining inflation, but interest rates rose sharply from 3.99% to 4.49%, driven by bond market dynamics. Speculation about China or Japanese hedge funds selling U.S. bonds is adding to the uncertainty.

Tariffs and Trade: Tariff tensions escalated, with Trump imposing 145% tariffs on Chinese goods and China retaliating with 125% tariffs, potentially disrupting trade. A 10% baseline tariff applies globally, paused for 90 days for most countries except China.

Short Covering Rally: Wednesday’s 9.5% S&P and 12.2% NASDAQ gains were driven by short covering, not strong buying conviction, followed by a partial reversal on Thursday.

Earnings Season: Big banks reported, with more earnings expected to set the tone. Financials and consumer finance look positive, but growth may not be as robust as prior periods.

Recession Debate: Mixed signals persist—some data suggests stability, but markets are pricing in future risks, including deficit concerns ($37T) and weaker-than-expected economic reports.

Market Dynamics:

Bonds and Dollar: Bonds declined, pushing yields up. The dollar fell 3.1%, dropping below 100 on the U.S. Dollar Index. Gold rose as a hedge against uncertainty.

Sector Rotation: Shift from growth (tech, discretionary) to value and defensive sectors (utilities, staples) continues.

Global Context: U.S. and UK yields remain high compared to Germany and Japan. Commodities such as copper and gold are up, signaling mixed economic outlooks.

Outlook (April 14-18):

The market remains confused, driven by tariff headlines, earnings reports, and interest rate volatility.

Long-term support levels (e.g., Fibonacci 50% retracement, S&P trend channels) are holding, but negative trends dominate.

Potential catalysts include earnings results and trade negotiation developments.

Seasonally, mid-to-late April is typically positive, but current conditions cast doubt on this trend.

Conclusion:

The week was marked by volatility, a short-lived strong rally, and ongoing uncertainty tied to tariffs, rates, and economic indicators. While support levels hold, the market’s negative bias persists, with defensive sectors outperforming. The upcoming week’s earnings and trade developments will be critical.

PDF of Charts and Slides used in today's video:
https://drive.google.com/file/d/1skjA...

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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!