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Market Volatility Amid Trade War Concerns
In recent weeks, financial markets have experienced significant fluctuations fueled by growing fears of a recession and ongoing global trade tensions exacerbated by President Donald Trump’s dynamic tariff strategies. Since our most recent Monthly Meeting on March 13, Wall Street has witnessed one of its most tumultuous periods in history. The S&P 500 Index recorded its third-largest single-day surge since World War II following an announcement from the White House, which included a 90-day suspension of increased tariffs for most U.S. trading partners, with the exception of China.
This surge in the market came after a challenging four-day decline that followed Trump’s April 2 announcement regarding his “reciprocal” tariffs. Despite the impressive gains seen last Wednesday and a few subsequent positive trading days, the S&P 500 remains in the negative territory for 2025, down nearly 8% year-to-date and approximately 1.6% lower since mid-March. As of Tuesday’s close, the index was 12% below its record high of 6,144 set on February 19.
Recent Moves in the Marketplace
The Club has been proactive amidst this volatility, executing three trades over the past month. Right after our previous meeting, on March 14, we sold our entire position in Nextracker, capitalizing on its substantial outperformance. Given the unclear rationale behind the rapid increase in share prices, it made sense to avoid potential losses on a hard-fought gain.
Subsequently, we decided to sell our shares in Alphabet, the parent company of Google, on March 31, primarily due to rising concerns regarding artificial intelligence potentially undermining traditional search dynamics. Most recently, on April 4, we divested the remainder of our position in GE Healthcare, largely due to the adverse impact of tariffs on the company’s international operations.
In addition to selling, we have also increased our investments in several stocks including Eaton and Texas Roadhouse. The fluctuations in our top-performing and underperforming stocks over the past 33 days highlight some of the broader market forces at play, particularly regarding economic uncertainties and inflation driven by tariff policies. This situation has prompted a shift toward stocks appealing to consumers with tighter budgets, exemplified by off-price retailer TJX Companies and bulk seller Costco.
Stock Performance Highlights
Top Performers
CrowdStrike: Up 18.1% — CrowdStrike benefitted from a catch-up rally, as its stock was undervalued following a disappointing earnings report prior to the March meeting. The improvement can be attributed to reinvigorated investor interest and positive endorsements from analysts, such as BTIG’s upgrade to a buy-equivalent rating on March 25. In uncertain economic times, cybersecurity firms tend to attract favorable attention due to the critical nature of their services.
TJX: Up 13.9% — The company behind T.J. Maxx, Marshalls, and HomeGoods continued to thrive amidst tariff anxieties. Since Trump’s announcement of reciprocal tariffs on April 2, TJX shares have increased approximately 4%, while the S&P 500 fell by 4%. The supply chain disruptions caused by tariffs may lead to excess inventory among many retailers, providing TJX with opportunities to purchase and resell at lower prices during a time when budget-friendly options are crucial for consumers. Recently, TJX reached a new 52-week high, closing above $130 on Monday.
Costco: Up 9.7% — Costco shares rebounded as investor sentiment improved despite a decline following its mixed quarterly earnings report in early March. With its solid fundamentals and attractive pricing propositions, Costco has positioned itself favorably amid economic uncertainty, as more consumers seek bulk purchasing options.
Laggards
DuPont: Down 19.3% — DuPont’s stock faced substantial declines in light of the tariff policy announcements, dropping over 20% since the April 2 announcement. Investors are particularly concerned due to the company’s significant operations in China, where tariffs have reached as high as 145% on U.S. imports and 125% on Chinese goods.
Bristol Myers Squibb: Down 17.1% — Although Bristol Myers initially performed well alongside defensive stocks, its shares have faltered amid uncertainties surrounding potential pharmaceutical tariffs. Analysts have also contributed to the downward pressure, with Goldman Sachs recently downgrading the stock amid continued market negativity.
Starbucks: Down 12.8% — Like other consumer discretionary stocks, Starbucks has struggled under the weight of tariff concerns, as investors ponder whether tighter consumer budgets will lead to more home brewing versus purchasing coffee in-store. Compounding its woes, Starbucks has faced challenges in China, where local competition has intensified, and growth has slowed.
As we anticipate the upcoming quarterly earnings report, we will closely monitor insights from Starbucks management regarding these ongoing challenges.
Stay informed with the latest updates on stock market trends and investment strategies as we navigate this tumultuous financial landscape.
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