““Why did the administration fold most of its tariff cards? Because another one-week [0.65%] increase in US long-term interest rates would break the world.” … Tension in the Sandpile, Thoughts from the Frontline by John Mauldin, 5/10/2025
Sorry, I’m a good week later than I wanted to be with this newsletter – I had a health-related issue I needed to resolve.
Where Are We, End of April 2025?
We were one week into April when the market hit bottom. I mentioned last month that government actions create unexpected outcomes. The sudden, massive hike in tariffs across the board created countless such outcomes. I thought of it as much like playing Jenga, if you’re familiar with that game.
Why would this cause interest rates to jump? Of course, inflationary expectations would play a role, but as much or more than that, trade surpluses abroad are held in Treasury Bonds and Bills. Disrupting trade surpluses caused Treasuries to sell off, raising interest rates. As I said last month, you can hate tariffs (I know I do because they are taxes) but trade deficits and surpluses happen even in the absence of tariffs.
The rebound in the stock market has been incredibly fast and aggressive. Are we in the clear? It’s hard to know. Many factors are at play. Opinions differ on where we’re going with the economy. The summer can feature a dip (“sell in May and go away”) and it’s well known that September is the weakest month historically. All things considered, I’m happy not one client called me to bail out on April 7.
As of the moment – just after mid-May, the markets have returned to approximately even for the year. If you are a 401K participant, you’ve enjoyed the opportunity to buy fund shares at a discount. For April, we ended up down slightly but May has continued the uptrend so far.
Following is the performance of our funds and the market indexes in Apr:
| Apr-25 | |||
| S&P 500 | -0.68% | ||
| Nasdaq (technology) | 0.88% | ||
| Dow 30 | -3.08% | ||
| NYSE Composite | -1.28% | ||
| Russell 2000 (small companies) | -2.31% | ||
| US Aggregate Bond | 0.63% | ||
| FBCG | 0.80% | Fidelity Blue Chip Growth | ETF |
| NOBL | -3.90% | Dividend Aristocrats | ETF |
| RSP | -2.36% | Invesco S&P Equal Wt | ETF |
| VBR | -3.39% | Vanguard Small Cap Value | ETF |
| TMFC | 1.80% | Motley Fool 100 | ETF |
| QQQ | 1.40% | Invesco QQQ Nasdaq 100 | ETF |
| SPMO | 2.20% | S&P 500 Momentum | ETF |
| XSMO | -1.56% | Invesco Small cap Momentum | ETF |
| XMMO | 1.38% | Invesco Midcap Momentum | ETF |
| FSLVX | -2.69% | Fidelity Large Cap Value | stock mutual fund |
| FSMVX | -4.68% | Fidelity Mid Cap Value | stock mutual fund |
| FCPVX | -4.81% | Fidelity Small Cap Value | stock mutual fund |
| OBMCX | -7.61% | Oberweis Micro-Cap | stock mutual fund |
| FBGRX | -10.52% | Fidelity Blue Chip Growth | stock mutual fund |
| AGGH | 0.43% | Simplify Aggregate Bond | ETF Income Fund |
| BUCK | -3.36% | Simplify Stable Income | ETF Income Fund |
| CDX | 0.56% | Simplify High Income | ETF Income Fund |
| MTBA | 0.32% | Simplify Mortgage Bond | ETF Income Fund |
| TUA | 2.78% | Simplify Short Treas Bond | ETF Income Fund |
| CFRAX | -0.02% | Catalyst floating rate | income mutual fund |
| EIFAX | -0.22% | Eaton Vance floating rate | income mutual fund |
| FFRAX | -0.63% | Fidelity floating rate | income mutual fund |
| RNDLX | -0.38% | RiverNorth Strategic | income mutual fund |
| FAGIX | 0.49% | Fidelity Capital & Income | income mutual fund |
| Starwood REIT, class D | -0.31% | Apr | real estate investment trust |
| Blackstone REIT, class I | 0.20% | Apr | real estate investment trust |
| Fidelity Credit Fd, class I | 0.08% | Mar* | private lending trust |
| Blackstone Credit Fd, class I | 0.40% | Mar* | private lending trust |
| Blackrock Credit Fd, class I | 0.03% | Mar* | private lending trust |
(Courtesy Morningstar Workstation)
* 1-month reporting lag
Following are your April investment results:
We should talk if you would like to review exactly where you stand or if we should consider a change. I am available at your convenience. I have Google Meet in case you would like to do a video conference. Also, please consult your Fidelity statement for advisor fee information.