Markets Mixed As Tariff War Continues

Equities were mixed last week as the Fed offered little guidance and tariff news was light.

Financial media continue to try to create confusion as they did in 2018. Words like "havoc" and "chaos" were used by media then, as they are being used now. In addition, China used similar language in 2018 as the nation is signaling now. "Fight until the end" was the phrasing then and it's being repeated during this trade war. While no two markets are exactly the same, what we do know is that pullbacks lead to opportunities. When equities go through a 15% or greater drawdown, returns are higher 12 months later 83% of the time. As more time passes, the odds eventually become 100% positive 10 years out or longer.

Until there is more clarity on the tariff picture, a data-driven method would be the best approach moving forward.

The data would suggest that the consumer is strong. Retail Sales data for March showed that consumers spent 1.4% month-over-month, which is significantly stronger than February's data (+0.2%). The level of buying by insiders has risen during the recent volatility. It would appear that key executives and insiders are busy betting that equity markets are nearing lows and now is a good time to step in if you have a long-term time horizon. For the time being, turning off the media and the talking heads and listening to your financial advisor is a better approach to investing.

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