Market Drama
Featuring Zoe CEO & Founder, Andres Garcia-Amaya, CFA
Watch Time: 5 min.
Welcome to this week’s Market Drama!
Stock Market Update:
- S&P 500: Down 9% this week, now down ~13–14% YTD.
- Nasdaq: Down 10% this week, now down 19.3% YTD.
- Oil: Also down nearly double digits for the week.
- Main driver: April 2nd announcement of aggressive new tariffs caused sharp sell-offs on Thursday and Friday.
- Tariffs impact: Proposed increases could raise the effective tax rate on U.S. imports from 2.3% to 20–25% — the highest in 100+ years.
- Market reaction: The sell-off reflects uncertainty, not full confidence that the tariffs will hold — negotiations are expectedarket reaction: The sell-off reflects uncertainty, not full confidence that the tariffs will hold — negotiations are expected.
- Earnings risk: Public companies may adjust profit forecasts if tariffs are enforced.
- Intra-year drop: Markets are down ~18–19% this year — high, but still within historical norms:
- 2022: –25%
- 2020 (COVID): –34%
- 2008 (financial crisis): –49%
- Volatility spike: VIX rose above 45 — one of the highest on record. Historically, VIX > 45 has been followed by:
- Average +37% 1-year return
- Average +58% 2-year return
- Compared to ~21% after lower VIX levels
- Volatility can feel alarming, but historically, it has created opportunities.
- For investors, this may be a time to revisit your financial plan, not to panic.
- Consider speaking with a financial advisor about risk tolerance and strategies like tax loss harvesting.
Stay tuned for next week.
– Andres
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