Market Update – April 28th, 2025

Financial Markets

Stocks posted strong gains last week as markets grew more optimistic about a potential U.S.–China trade agreement. The Nasdaq Composite rose 6.7%, the S&P 500 gained 4.6%, and the Dow Jones Industrial Average advanced 2.5%. Bonds also participated in the rally, with the Bloomberg Barclays U.S. Aggregate Bond Index rising 0.75%.

Source: Zacks

Market News

Existing Home Sales. Existing home sales declined more than expected in March, falling 5.9% from February to a seasonally adjusted annual rate of 4.02 million units, 2.4% below levels from a year ago, as elevated mortgage rates continued to weigh on buyer demand. The median sales price still rose 2.7% year-over-year to $403,700, indicating a moderation in housing inflation. Inventory conditions continued to loosen, with supply increasing to 4.0 months’ worth, up from 3.2 months in March of 2024.

Source: National Association of Realtors

New Home Sales. In contrast to existing homes, new home sales in March surprised to the upside, at a seasonally adjusted rate of 724,000 homes sold, beating expectations. The median sales price was $403,600, nearly identical to existing home prices, but was down 7.5% from a year ago and 12.3% below the October 2022 peak of $460,300. While sales volumes have remained resilient, the continued decline in prices reflects softness in the housing market for builders.

Source: US Census Bureau

Leading Indicators. The Conference Board’s Leading Economic Index (LEI) declined 0.7% in March, driven largely by notable drops in three components: stock prices (as measured by the S&P 500), average consumer expectations for business conditions, and the ISM New Orders Index. While most underlying indicators were neutral month over month, the weakness in these three areas weighed heavily on the overall index. March’s decline points to continued slowing in economic momentum, though the LEI has not been signaling a recession anymore in recent readings.

Source: The Conference Board

Tesla Earnings. Tesla reported a first-quarter earnings miss last week, with automotive revenue down 20% year over year and net income falling 71%, but shares rallied as CEO Elon Musk announced he will be dedicating more time to the company starting in early May after several months in Washington, D.C., working with the Trump Administration. Optimism was further supported by a shift toward pro-autonomous vehicle policies, as U.S. Transportation Secretary Sean Duffy announced a new framework to help U.S. automakers become more competitive, benefiting Tesla’s self-driving ambitions.

Source: Y-Charts

Big Week Ahead. This week will bring several key updates, including earnings reports from Microsoft, Meta, Apple, and Amazon. The first estimate of first-quarter GDP will also be released, along with March data for PCE inflation, personal income, spending, and savings. Consumer confidence figures will add further insight into household sentiment.

The April employment report, due Friday, will be closely watched for signs of economic strength or emerging cracks. Importantly, weekly initial jobless claims have remained remarkably stable over the past year, providing ongoing evidence of labor market resilience. However, it’s worth noting that severance packages, especially in the federal sector where thousands have been laid off, can delay or reduce filings for unemployment benefits, potentially masking some underlying softness. With a packed calendar, it will be an important week for US markets.

Source: FRED

Summary

Markets rallied last week as optimism around a potential U.S.–China trade agreement lifted stocks and bonds. Housing data was mixed, with existing home sales declining and new home sales showing better volumes but continued softness in pricing. Tesla shares rose after an earnings miss as investors focused on Musk’s partial departure from Washington D.C. and support for autonomous vehicle growth, while the Leading Economic Index pointed to continued slowing in economic momentum, but is no longer a recessionary signal.

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Thank you,

Joseph M. Maas,
CFA, CFP®, ChFC, CLU®, MSFS, CCIM, CVA, ABAR, CM&AA

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