Mark on the Markets
April 2025

Tariff Shock

Last week was one of the most volatile I’ve seen in 18 years as a professional investment manager.  As of today, major indices have experienced significant declines: the S&P 500 is down 13.9% year-to-date, the Nasdaq has fallen 19.2%, the Russell 2000 is off 18.8%.

On Wednesday, President Trump announced new tariffs on nearly all major trading partners. These tariffs are “reciprocal” in that they correspond to tariffs each country imposes on U.S. goods and are on top of previously announced duties. The average tariff rate across countries is 25%, with rates for some as high as 49%. While the implementation of these tariffs was widely telegraphed by the White House, the level and scope are greater than many investors and economists expected, and the immediate market reaction was negative.

Over the weekend, I listened to Tucker Carlson's interview of Scott Bessent, the current Treasury Secretary of the United States. I like to hear all sides of current economic commentary, especially after last week’s tariff shock. Being open-minded is critical to finding truth and coming to an understanding of the underlying issues.

Treasury Secretary Bessent’s Perspective

We need to examine the path the country is on now that Trump has returned to office. The U.S. continues to run a structural budget deficit of over $2 trillion annually, with little political will on either side on the aisle to address the imbalance. Our national debt is about to top $37 trillion, and interest payments alone have reached $1 trillion per year and are still rising.

This is in stark contrast to President Trump’s first term, which was marked by a historic bull market. So, what’s the difference this time? Are these new tariff policies a misguided attempt driven by ego, or do they represent a bold, strategic pivot to restore long-term economic stability?

The current global trade system has put U.S. manufacturers at a disadvantage, while other nations have long protected their industries with tariffs ranging from 20% to nearly 100%. In contrast, the U.S. has operated under the banner of "free trade"—often to the detriment of its industrial base and workforce.

This new policy direction, according to Secretary Bessent, aims to correct that imbalance. By encouraging domestic manufacturing, especially in strategic industries like semiconductors and consumer electronics, the administration hopes to revitalize middle America, create jobs, and secure supply chains. While shifting production back to U.S. soil won't happen overnight, the long-term impact could be transformative. Companies that adapt early may benefit from tariff exemptions, while contributing to a stronger domestic economy.

Of course, China remains a central player in this unfolding drama. Last week’s 34% retaliatory tariff on U.S. goods sparked renewed selling in the equity markets. But it’s important to remember that China’s economy also relies heavily on U.S. consumers. Their manufacturing-heavy model lacks the internal demand to sustain itself without American consumption. The two economies are intertwined, and a more balanced trade relationship—while contentious now—may ultimately serve both nations.

In the short run, markets are reacting as though tariffs are permanent and immovable. But just as COVID disruptions eventually receded, the current standoff is likely to evolve. Both sides have incentives to reach an agreement. A breakthrough in broader trade negotiations could rapidly shift market sentiment.

Our Thoughts

Over the long-term, the pillars of a strong economy remain the same: predictable tax policy, reasonable regulation, fiscal responsibility, pro-business governance, low interest rates, and a revitalized industrial base. These policies may cause short-term turbulence, but they offer the possibility of a more stable and prosperous future.

Ideally, the newly announced U.S. tariffs serve as a strategic opening move—paving the way for negotiations that ultimately lead to reduced trade barriers for American products abroad. Should that occur, there may be an opportunity to scale back our own tariffs in return.

We remain cautiously optimistic. Outcomes are far from certain. In the meantime, equity markets may face further downside—or we may see a period of stability, depending on how events unfold.

Perhaps Warren Buffett said it best in 2008, during the middle of the global financial crisis: "In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”

This is a helpful reminder that although market swoons can be unsettling, history shows that keeping a long-term perspective is the best way to stay on track to achieve your financial goals.  

What to Consider During a Market Correction

From federal cuts to foreign tariffs, the stock market has been reacting to a lot lately. Ultimately, it's not a question worth worrying about too much. However, it’s prudent to focus on the long term, and consider taking advantage of market downturns when you can. Here are things to consider improving your financial future.

Cash Flow:

Will your cash flow be tight? If so, consider the following:

• Reexamine your budget looking for areas to reduce spending, especially discretionary expenses.
• Fund any shortfalls strategically, using the most advantageous source of cash.
• You may need to prioritize your obligations and take advantage of opportunities to extend due dates or alter payment schedules, minimizing fees, penalties, and any negative impact upon your credit.

Do you need to review or increase your emergency fund? 

• If so, evaluate the size of your fund and assess the number of months that it can support your living expenses.

Have you experienced a disruption in your employment? 

• If so, and you were laid off from work through no fault of your own, you may be eligible for unemployment benefits.

Were you planning to retire soon? 

• If so, consider the following: Review your options to make sure you are still comfortable with retiring or if you would prefer to work a little longer.
• Review your budget and possibly reduce spending in non-essential categories in the first few years of retirement.

Are you taking a distribution from an investment or retirement account? 

• If so, consider the impact of changing your distribution schedule to protect accounts (defer remaining distributions until the end of the year or spreading the distributions over the rest of the year).

Mortgage & Debt:

Do you have a mortgage or debt? 

• If so, consider whether you should refinance any debts if interest rates come down in the near future.

Do you have extra cash that is not earmarked for an upcoming expenditure? 

• If so, consider investing it to take advantage of low valuations.

Do you typically make contributions to a traditional IRA or Roth IRA? 

• If so, consider contributing now, to take advantage of low valuations.

Are you a small business owner? 

• If so, you may be eligible for a small business loan, or other forms of federal, state, and community relief.

Tax Planning:

Do you have a traditional 401(k) or IRA? 

• If so, converting some of the assets into a Roth IRA could be beneficial while valuations are low. Contact me to see if this strategy will benefit you.

Do you have any assets with a tax loss? 

• If so, consider harvesting the loss, which could reduce your tax liability. Tax-loss harvesting is a strategy we employ throughout the year. Schedule a discussion with me to see the benefit on how it works for your accounts.

Mark on the Charts

While I look at equal weighted market for the broader picture, today I’m looking at the S&P 500 as this is what all the large traders are presently focused on. 

I’ve pulled up a weekly 10-year chart of the S&P 500. Notice the blue channel lines that began in 2019. The market seems to be testing the bottom of the channel. This can give an indication of an area of support, providing an area where the market can recover and possibly move higher. I’ve been working at this for too long to know that the market can also break below this area. There are no certainties in markets.

Volatility remains, as we have seen with the large movements up and down today. We may be holding at this support level of 4750 (green line), but the week is young and there are still many unknows.

Beyond that, if the market begins to recover, the first resistance zone appears to be around 5500-5575 (the light red area). Getting back above there will be the first step in recovering the damage done.

In the bigger picture, I believe saying defensive and only making smaller tactical moves is prudent at this time.

A Biblical Perspective on Not Fearing Market Declines

Market downturns can stir up anxiety, especially when headlines scream “collapse,” portfolios shrink, and the future feels uncertain. But Scripture consistently reminds us that our ultimate security is not in the stock market, our investments, or any man-made system—it's in God.

1. Our security is in God, not wealth.

“Some trust in chariots and some in horses, but we trust in the name of the Lord our God.” – Psalm 20:7In ancient times, chariots and horses were symbols of power and protection. Today, we might say stocks, bonds, or real estate. But our true foundation is not in financial systems—it’s in God’s steadfast character and provision.

2. God is sovereign over all things, including economies.

“The earth is the Lord’s, and everything in it, the world, and all who live in it.” – Psalm 24:1God is not surprised by market movements. He sees the end from the beginning. Even when the world feels chaotic, we can trust that He remains on the throne.

3. Fear is not from God.

“For God has not given us a spirit of fear, but of power and of love and of a sound mind.” – 2 Timothy 1:7Fear can lead to impulsive decisions, anxiety, and spiritual distraction. But God equips us with peace, clarity, and courage—especially in times of uncertainty.

4. God provides for His people.

“Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they?” – Matthew 6:26Jesus reminds us that worrying doesn’t add a single hour to our lives. Instead, we’re called to seek Him first and trust that He will meet our needs.

5. Times of testing refine our trust.

“Consider it pure joy, my brothers and sisters, whenever you face trials of many kinds, because you know that the testing of your faith produces perseverance.” – James 1:2–3Market downturns test more than just our patience—they test our faith. But through those trials, God strengthens our character and dependence on Him.

When the markets drop, it’s natural to feel unsettled. But as believers, we’re invited to live by faith, not fear. Let every decline be a fresh reminder that our hope isn’t in earthly treasure—but in the One who owns it all, sees it all, and holds us securely in His hands.

Why We Are Committed to Biblically Responsible Investing

Biblically Responsible Investing (BRI) is an investment approach that integrates faith-based values with financial decision-making. Rooted in biblical principles, BRI seeks to align investments with moral and ethical standards while pursuing financial returns. BRI is a cornerstone that offers our clients the potential to generate a positive impact beyond financial gains.

We’re committed to helping you experience financial contentment and peace through a plan that’s right for you, and by aligning your investment with your Christian values. It’s about understanding how you want to live and what you want to do. Whether you want to spend time with family or volunteer to make the world a better place, we help you prepare to spend your time, talents, and resources on what matters most to you.

Implementing faith-based investing begins just like any other investment
management process – we’re looking for great investments!

I hope you’ve found this review to be educational and helpful. Our goal is to be a guide to you as you run the race and keep the faith. 

For God has not given us a spirit of fear, but of power and of love and of a sound mind. – 2 Timothy 1:7

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