Weekly Newsletter 03/28/25
Good afternoon,
As we near the end of March and the first quarter of 2025 I am reminded of the expression first cited by Thomas Fuller (1732) describing many March climates: “Comes in like a lion, goes out like a lamb.” Though in many climates the weather hasn’t quite reached the lamb stage…maybe a surly cat.
Being a basketball fan, this is also THE season of the year. After this weekend we will know the 4 teams headed to San Antonio contending for the national championship. It pains me to say I have Duke beating Florida in my bracket. Painful not because I am a big time Gator fan, but because of my near lifelong dislike of Duke. 34 years ago, Duke derailed my favorite college basketball team of all time, the 1990-1991 UNLV Runnin’ Rebels. Sports mattered much more to me back then, and I felt personally invested somehow. UNLV had beaten Duke in the championship game the year before by 30 points. Now on a 45-game winning streak the Rebels entered the semi-final game as 10-point favorites looking to become the first undefeated national championship since Indiana in 1976 and first since the tournament expanded to 64 teams requiring 6 tournament wins in a row (from 1951-1975 it was a 16-team tourney…UCLA’s run of 10 titles in 12 years would certainly be a much more difficult achievement). I certainly didn’t know it at the time, but I was full of bias’. Attribution bias: UNLV had 4 future NBA players on its starting 5 including the player of the year and first overall pick. Can’t lose. Conformity bias: EVERYONE knew UNLV was better than Duke. Even some Duke players thought the same. Confirmation bias: Defending champ (check), 45 game winning streak (check), dominated the same team just a year ago (check). Contrast bias: UNLV was bigger, faster, stronger. You may not be a hoops fan nor a sports fan, however, I imagine you can relate to a similar instance in your life where a bias bit you.
Our investment experience can seem like one big “whudda, cudda, shudda” chocked full of bias. The biggest winners of the past are now the laggards. Investments written off as boring and lacking momentum are now the best performing. EVERYONE says the market is crashing so it must be so. I don’t believe a 4-5% step back to be a crash, however, your perception is my reality.
Many investors are looking ahead to the April 2nd “Liberation Day” announcement of reciprocal tariffs as though we will receive some playbook on how the rest of the year, or how the entire administrative term will go. It is never that easy. Granted uncertainty around tariffs has caused considerable consternation, yet in my 27 years in finance, the real problem is never the one everyone is focused on. I believe more concessions will be made in addition to the already mentioned pauses on a number of threatened tariffs.
February core Personal Consumption Expenditures (PCE) and personal spending slightly ahead of consensus. February core PCE rose 0.4% m/m, slightly ahead of expectations for 0.3% increase and January's unrevised 0.3% rise. On an annualized basis, core PCE at 2.8%, ahead of 2.7% consensus and last month's 2.7%. February personal spending rose 0.4% m/m vs consensus for a 0.3% rise.
The European Commission has begun work on a "term sheet" of possible areas of tariff concession. Noted these include lowering its own tariffs, regulatory relief, and mutual investments.
Michigan Consumer Sentiment falls, inflation expectations tick higher. Final March University of Michigan consumer sentiment came in below expectations at 57.0 vs consensus 57.9 (which was also the prior reading). Headline reading down for third straight month and now lowest since Nov-22. March One-year Inflation Expectations final came in at 5.0% vs March preliminary reading of 4.9% and February's final of 4.3%.
Initial jobless claims little changed; final Q4 GDP slightly ahead of consensus; pending home sales beat. Beyond Consumer Confidence, some increasingly cautious views around US consumer. Even before March Consumer Confidence fell to four-year low, some recent updates around US consumers flagged growing challenges, weakening trends. Stay balanced my friends.
The link below contains additional financial articles and resources.
https://www.raymondjames.com/evangelista/resources
“Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less.”--Marie Curie
Thank you,
KYLE CHRISTIANSON, CFP®
Financial Advisor
Raymond James & Associates, Inc.
1421 Pine Ridge Rd, Ste 300
Naples, FL 34109
Toll Free (800) 843-2025 | Direct (239) 513-6525 | Main (239) 513-6500 | Fax (239) 596-5474
Kyle.Christianson@RaymondJames.com
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