Bluefin Investments
Weekly Market Commentary
March 2025
Hello all - we hope you had a nice March.
It was definitely not a nice March for the markets. For the month, the Dow lost 4%, the S&P 500 fell 5.3%, and the Nasdaq, which has a higher concentration of tech stocks, plunged 7.4%.
We also closed out the worst quarter since 2022. The Dow fared the best with a decline of 1.3%, the S&P declined 4.6%, and the Nasdaq was off 10.4%.
It was definitely not a nice March for the markets. For the month, the Dow lost 4%, the S&P 500 fell 5.3%, and the Nasdaq, which has a higher concentration of tech stocks, plunged 7.4%.
We also closed out the worst quarter since 2022. The Dow fared the best with a decline of 1.3%, the S&P declined 4.6%, and the Nasdaq was off 10.4%.
Here’s a chart of the markets this month:
After seeing big gains in recent years, big tech stocks have had a rough year. The top-7 tech stocks in the S&P 500 are down roughly 15% this year, while the remaining 493 stocks are flat.
Gold had another big month, reaching new record highs. Investors have been pouring money into gold on worries of a global trade war, which is described as a “flight to safety.”
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TRUMP
The moves in the market were again driven by comments about trade from the Trump administration.
Stocks started March moving lower as it looked like the tariffs would be high and strict and the threat of a trade war intensified.
After selling off strongly, stocks became very oversold (or cheap) and investors were looking for any hints of good news to start buying again. New comments out of the White House made it look like new tariffs would not be as strict as thought and markets bounced on the news.
Unfortunately, the excitement was short-lived. Stocks sold off when President Trump announced large new tariffs on foreign autos and parts, and cautioned that upcoming tariff announcements would be stronger than expected.
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We can understand the Trump position on trade. The U.S. does charge lower barriers to foreign countries, as you can see in the chart below.
From that perspective, some sort of reciprocal tariffs or policies can make sense.
However, tariffs to force entire manufacturing chains into the U.S. seems very misguided. Not only does this take years or even decades to accomplish, but it creates chaos and raises costs for everyone.
It also does not bring back jobs. Factories used to employ thousands of workers to make products. Today, however, the work is done by computers and robotics and far fewer human workers are needed.
However, tariffs to force entire manufacturing chains into the U.S. seems very misguided. Not only does this take years or even decades to accomplish, but it creates chaos and raises costs for everyone.
It also does not bring back jobs. Factories used to employ thousands of workers to make products. Today, however, the work is done by computers and robotics and far fewer human workers are needed.
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Investors thought President Trump would view the stock indexes as a barometer to his policies, like he did in his first term. That meant he would undertake policies that would boost the stock market and back off policies that hurt the market.
That is clearly not the case. Comments from President Trump and others in the administration this month indicated that they have no concern for the direction of the market.
The lack of concern shows. We are currently having the second-worst market performance after an election in almost 90 years.
The enthusiasm among investors has completely disappeared, too.
Markets have become un-investable as massive, market-moving announcements are made randomly. Because of this, more money is flowing into foreign markets as investors look for a small bit of stability. These markets have seen gains while we continue to see losses.
Markets have become un-investable as massive, market-moving announcements are made randomly. Because of this, more money is flowing into foreign markets as investors look for a small bit of stability. These markets have seen gains while we continue to see losses.
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FED
The Fed held a policy meeting this month, with no changes made to their policy – as expected.
They warned of higher costs and economic harm as a result of the new tariff announcements.
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ECONOMY
That brings us to the economy. There has been a noticeable increase in recession fears.
People are becoming more worried about their financial situation, too.
Defaults keep climbing, as well. The chart below shows fewer people are able to make their car payments on time.
Many companies are warning that their sales are slowing and their costs continue to rise.
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INFLATION
Talking about prices, let’s take a look at the inflation data from this month. The annual inflation rate took a turn lower, which was a welcomed sign.
That metric is looking at inflation from an annualized measurement (counting the previous 12-month numbers). When you look at inflation month-by-month, inflation is still rising and prices continue to go higher.
When excluding energy and food from the calculation (which economists call the “core” measurement), we can see inflation still rising solidly every month.
A welcomed sign, though, was inflation at the business level came in flat last month. This inflation level tends to lead the CPI, so perhaps we’ll see a cooling in prices at the retail level soon.
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OTHER ECONOMIC DATA
Economic data released this month was mixed.
The manufacturing side of our economy showed a slight decline and the service side was a little better.
Retail sales saw a slight increase.
Durable goods (these are items with a longer life, like a phone or refrigerator) saw an increase as importers looked to beat the tariffs and purchase foreign items today.
Consumer confidence figures were big news this month as they all fell sharply. The constant tariff drumbeat and sour mood in the press sent consumer confidence plunging.
Small business optimism fell too.
CEO optimism also fell by the strongest level in years.
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Where does the market go from here?
It’s anyone’s guess at this point as random policy announcements move the markets.
This first week of April will have a large impact on market direction, though. The much-hyped April 2nd tariff announcements will be a big day for investors. The Friday jobs report will also have a big impact on market direction.
Stocks are very oversold at this point, so we think there is a bigger chance for a solid move to the upside here. But it remains anyone’s guess…
This commentary is for informational purposes and is not investment advice, an indicator of future performance, a solicitation, an offer to buy or sell, or a recommendation for any security. It should not be used as a primary basis for making investment decisions. Consider your own financial circumstances and goals carefully before investing. Past performance cannot guarantee results.