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Together with Betterment
Take a deep breath.
The market is melting, and it’s safe to say that nobody could have predicted how President Trump would be handling these tariffs. One thing is clear — he has not cared if the market takes a beating for the sake of bond yields and rates improving.
If the stock market continues to correct, here’s a few names in which I’m going to increase my positions:
Amazon (AMZN)
Google (GOOG)
Oscar Health (OSCR)
PayPal (PYPL)
For now — I’m slow to DCA. The market could find a local bottom at any moment… or it could drop -20% first. In this type of situation, there’s truly no way to know.
Pick 10-15 names that you really like and buy them systematically. Automate your investing and say “I want to own VOO and QQQ and I’ll continue to buy it even as they trade lower, and I’ll also buy some quality names along the way!”
As long as you aren’t using options, leverage, or panic selling — history says that you will be plenty fine.
A friendly callout for you all: you don’t need to stare at your portfolio all day. You have jobs, families, relationships, routines, and a lot of other things that you need to keep in line.
Staring at numbers all day or “doom scrolling” social media sadly isn’t going to help you very much… it’s probably going to hurt you. Even in times like this — have a plan and stick to it. Mine will be slowly but surely accumulating incredible companies at discounted prices.
Betterment is a great way to automate your investing if you want to check them out below.
Read on to see what is coming this week.
TAX TIP: You have until April 15 to contribute to and max out an IRA for 2024. And you might even be able to deduct those contributions on your 2024 tax return.
Key Earnings Announcements:
Amid the chaos — big banks are set to kick off the next quarter of earnings reports.
Monday (4/7): Dave & Busters, Levi’s
Tuesday (4/8): RPM, Tilray, Walgreens
Wednesday (4/9): Constellation Brands, Delta Air Lines
Thursday (4/10): Carmax, Lovesac
Friday (4/11): BlackRock, BNY, JPMorgan Chase, Morgan Stanley, Wells Fargo
What We’re Watching:
JPMorgan Chase (JPM)
JPMorgan Chase (JPM) will lead the charge for Q1 earnings season on Friday. JPM’s stock soared after their Q4 earnings report with $14B of net income and a +21% Return on Tangible Common Equity (ROTCE) — beating peers like Citigroup’s +6%. This was fueled by a +46% increase in investment banking revenue and a +25% increase in wealth management revenue. JPM’s last earnings report also revealed that trading volume spiked +15% above its 50-day average. Ahead of this week's earnings — analysts have issued ten upward EPS revisions and seven upward revisions for revenue, with just one downgrade.
Q1’s $94B net interest income guide looks shaky — with analysts noting that tariffs could cut 2-3% off EPS. Other analysts believe wealth management will perform decently well as spooked clients seek advice. We’ll be watching banks closely this week — specifically if CEOs of these massive companies can confidently deliver guidance during times of such uncertainty.
JPM has increased their probability of a recession to 60% this year and added a stark warning: "There will be blood."
"These policies, if sustained, would likely push the US and possibly global economy into recession this year.”
JPMorgan Chase & Co. (JPM) Stock Performance, 5-Year Chart, Seeking Alpha
Delta Air Lines (DAL)
Delta Air Lines (DAL) stock nosedived -31% in a month to $37.25, rattled by macro jitters and airline incidents — despite a 2024 operating cash flow boost to $6.5B (up +$1.5B YoY). Q1 guidance crashed from +7-9% revenue growth to +3-4% after a deadly January crash and February scare, with CEO Ed Bastian flagging a -$500M hit.
“There's a whole generation of people traveling these days that didn't realize these things can happen... we saw a pretty immediate stall in both corporate travel and bookings, not that they stopped, but the growth rates that we had been on stalled considerably.”
Premium seat purchases and cheaper fuel (oil prices are closing in on $60/barrel) are supporting Bastian’s $300M-$400M pretax profit hope, but -$16.2B in debt is scaring investors. According to Goldman Sachs, tariffs could hike costs +2-3% — testing Delta’s goal of $1.5B of free cash flow in Q1.
Delta Air Lines, Inc. (DAL) Stock Performance, 5-Year Chart, Seeking Alpha
Investor Events / Global Affairs:
Global trade is in the spotlight, with tariff turbulence and high VIX spikes lingering.
Tariff News
Trade tensions resurfaced in a big way over the weekend, keeping tariffs at the front and center of attention. The Trump administration signaled that newly imposed duties are more than a short-term tactic — they’re part of a broader effort to "reset global trade."
Commerce Secretary Howard Lutnick made that crystal clear, stating, "The tariffs are definitely going to stay in place for days and weeks. That is sort of obvious. The president needs to reset global trade."
The White House says it's already seeing diplomatic traction — with "more than 50 countries" reaching out to begin new trade talks, according to officials. A few of these are listed below:
There’s intense frustration from investors (including myself) that we haven’t seen any tariff rollbacks so far. If so many countries are “coming to the table” — then why hasn’t there been any positive announcements yet? This part is really puzzling, especially if there isn’t any positive news over the coming 48-72 hours.
As we head into the week, expect volatility — especially in trade-sensitive sectors like industrials, autos, and semiconductors. Watch for any updates on potential countermeasures from China or the EU, and keep an eye on U.S. Treasury yields as investor sentiment shifts.
At the time of writing this newsletter — China has responded with their own 34% tax on U.S. imports, while the European Union seems like it’s ready to negotiate. Let’s see if anything happens over the coming days.
“This is an adjustment process. What we saw with President [Ronald] Reagan when he brought down the great inflation, and we got past the [President Jimmy] Carter malaise, there was some choppiness at that time, but he held the course, and we’re going to hold the course.”
“It starts to feel as if the market is getting into a ‘sell now, ask questions later’ kind of mood… The market is looking for the point of max pain at which the Trump administration and/or the Fed start to blink.”
“Liberation Day was a knock-down, drag-out affair… There was a harshness that surprised even the most hawkish people I know.”
The VIX Reached as High as 61 This Morning
The VIX closed at 45.3 Friday, one of its highest weekly finishes ever, signaling major fear. The Fear & Greed Index sits at 4/100 and this morning, the VIX reached as high as 61 — the highest level since it reached 65 in August’s market panic.
Above is a look at past instances when this occurred and how the S&P 500 performed in the days that followed. Historically, a VIX at 45 or higher has been a buy signal: stocks rallied 100% of the time over the next 1-5 years, with returns beating averages. That doesn’t mean I’m saying to smash the “buy” button right now — but it should give you perspective and some peace of mind.
Also on Friday, The S&P 500 notched its second straight day of -4.5% drops — which is generally only seen in major crashes like 2008 and 2020. Below you will see how the S&P 500 has responded to each time this has happened.
Tariffs and recession fears (such as JPMorgan’s 60% recession odds) are fueling the panic, but history hints to at least a bounce — with the SPY often reversing sharply after the VIX peaks. Of course though — it’s impossible to have any sort of certainty right now. The market is waiting to see if Trump will present any positive tariff negotiations / rollbacks. We are practically destined to have a bounce at some point soon — but the strength / extent of it will be completely dependent on news. The bottom likely isn’t in yet.
We could know a bit more coming out of the Fed meeting mentioned in the next section.
"We're in the territory where this will be a named event when people write about things in 10 or 20 years time. Things become reflexive — derisking leads to derisking — and even though individual actors in markets think they are doing the rational thing, when they all do the same thing at the same time, it becomes irrational on the surface, a sort of tragedy of the commons… And secondly there is an intransigence element that will come to the fore because these guys (U.S. policymakers) don't sound like they are going to change their minds."
"The size and disruptive impact of U.S. trade policies, if sustained, would be sufficient to tip a still healthy U.S. and global expansion into recession.”
Fed Board Meeting Today
Just a few days ago, the base case of the market was that there would be two rate cuts this year. Now — the market is pricing in closer to four or five.
This morning, the Fed will be having a closed meeting for the “review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.”
Trump wants the Fed to cut rates immediately, and it looks like they are going to talk about it. It’s important to note that meetings of this nature happen every month at the Fed, and this specific meeting was announced on April 3rd. It’s not necessarily correct to call this an “emergency meeting” — which I’m seeing all over social media.
“The Federal Reserve may soon not have a choice but to cut rates. Tariffs raise the ugly scepter of inflation, true, but if growth turns pear-shaped, the Fed will have no choice but to prioritize the economy.”
“A pre-emptive rate cut would only be helpful if it bolstered business confidence, and that might not be the case if it were seen as a crisis response.”
Major Economic Events:
The Consumer Price Index, Michigan's Consumer Sentiment Survey and FOMC Fed Minutes take center stage.
Monday (4/7): Consumer Credit, Fed Governor Adriana Kugler Speaks
Tuesday (4/8): NFIB Optimism Index, San Francisco Fed President Mary Daly Speaks
Wednesday (4/9): Minutes of Fed’s March FOMC Meeting, Wholesale Inventories, Richmond Fed President Tom Barkin Speaks
Thursday (4/10): Chicago Fed President Austan Goolsbee Speaks, Consumer Price Index, Core CPI, Fed Governor Michelle Bowman Speaks, Initial Jobless Claims, Kansas City Fed President Jeff Schmid Speaks, Philadelphia Fed President Patrick Harker Speaks
Friday (4/11): Consumer Sentiment (prelim), Core PPI, New York Fed President John Williams Speaks, Producer Price Index, St. Louis Fed President Alberto Musalem Speaks
What We’re Watching:
Consumer Price Index
The February CPI report came in softer than expected, with annual inflation easing to +2.8% (vs. +2.9% forecast, +3% prior). Energy prices pulled back, especially gasoline (-3.1%) and fuel oil (-5.1%), while shelter and transportation inflation also slowed. Core CPI — closely watched by the Fed — dropped to +3.1%, its lowest since April 2021. On a monthly basis, both headline and core inflation rose just +0.2%, signaling continued disinflation momentum.
Economists currently expect a CPI increase of +2.5% YoY and Core CPI to rise +3.0% YoY. This reading will be critical to providing the Fed with the confidence to perform a rate cut soon.
“Whatever you think of the legitimate reasons for the newly announced tariffs – and, of course, there are some – or the long-term effect, good or bad, there are likely to be important short-term effects. We are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products.”
U.S. Consumer Sentiment
Source: Survey of Consumers
U.S. consumer sentiment fell to 57.0 in March – down from 64.7 in February and the weakest reading since November 2022. The decline marks the third straight monthly drop as Americans grow more pessimistic about personal finances, business conditions, and inflation. Notably, two-thirds of consumers expect unemployment to rise, the highest share since 2009. Short- and long-term inflation expectations both ticked higher, adding to concerns.
The data signals growing unease despite softening inflation — a red flag for policymakers and markets alike. The current median forecast expects sentiment to fall even further to 55.0 this week.
"Many consumers cited the high level of uncertainty around policy and other economic factors; frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences.”
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