Good morning.

Right before the president’s “Liberation Day” tariff announcements, the S&P stood at around 5670.  Immediate reaction resulted in a sharp drop but since then equities rebounded, and following a 9-consecutive-day advance … the longest in 20 years … the S&P found it gained back almost all the lost ground.

Well, sorry folks, but today it appears that streak might end as stocks opened on the downside with thoughts shifting to the Fed … as the group meets this week to address monetary policy.

The Fed will, of course, be weighing recent improvement on inflation which, in combination with employment numbers that are still respectable, would normally allow for a rate cut … but these times are anything but normal … as tariffs seem to be adding quite a wrinkle.  There is concern inflation might return if prices jump (sharply in some cases) with tariffs passed along to consumers.  And yes Virginia, this is akin to a tax.

Even so, the Fed might be forced to take action … if not now, then at June’s meeting … as GDP for the first quarter turned negative and they try to get ahead of the curve (something which the Fed has, historically, failed to accomplish so many times).

Many are clamoring for interest rates to come down … as potential home buyers look for improvement in affordability … and small business owners (a group which Reuters claims increasingly falling behind on credit card payments) … need this to happen … and happen soon.

Back to tariffs for a moment …

… as the president is calling for 100% tariffs on any non-U.S. films. Why might this be a problem? First, reciprocal tariffs … since affected countries could add costs to exported Hollywood movies (which I assume is substantially larger in comparison). But another issue is “what’s next?” Will DJT soon recognize the large amount of foreign “call centers” … and also put extra charges on those?

All of these moves … while possibly playing well to those not (yet) affected … have ramifications.  Bloomberg just reported minutes ago that some towns in Washington are “being ravaged” by Canada’s boycott of U.S. goods and tourism … with layoffs starting amid localized “economic depression.”

Okay … enough of that today.

In another bit of news, a $70 million dollar jet fell off the side of an aircraft carrier in the Red Sea

… which many point out happened to be the most money wasted on a Jet since Aaron Rodgers.

Have a great day,

Joseph G. Witthohn, CFA

Have any questions? Please contact info@teamemerald.com

A Look At The News | May 5, 2025 As of 10:41 AM today: There has been a lot of talk concerning the effects of the tariffs … with many calling for recession … but what needs to happen in order to have one “officially” declared? (NPR) https://www.npr.org/2025/04/07/nx-s1-5354927/recession-trump-tariffs   Do you use AI? An increasing number of people are using it … but does picking the “right” one give you an advantage over other users? (TomsGuide) https://www.tomsguide.com/ai/claude-is-quietly-crushing-it-heres-why-it-might-be-the-smartest-ai-yet   If you do use AI, how do you use the results?  I mean … sharing the information with your company seems problematic if you don’t have complete confidence in the response (EuroNews) https://www.euronews.com/next/2025/05/05/almost-half-of-workers-that-use-ai-on-the-job-dont-trust-it-new-survey-shows   … for it takes human intervention when you proofread and review AI’s output … and should be reviewed with a critical eye (AllWork) https://allwork.space/2025/05/working-smarter-with-ai-why-critical-thinking-is-still-your-superpower/   It seems that Hollywood is under attack by films made outside the U.S. … so a solution has been found. Tariffs!  Though you need to wonder if this is a solution in search of a problem (BBC) https://www.bbc.com/news/articles/cjr7e2z1rxyo   Market timing has been proven to be not only difficult, but nearly impossible, as the old, boring, “buy and hold” strategy has worked so well over time (Benzinga) https://www.benzinga.com/news/25/05/45186124/peter-lynchs-market-observation-far-more-money-has-been-lost-by-investors-preparing-for-corrections-than-has-been-lost-in-corrections-themselves The statements above are supplied for educational purposes only. The statements depict the viewpoints and opinion of the author and are not necessarily the views of Emerald Asset Management or its affiliates. The information described herein is taken from sources which are believed to be reliable, but the accuracy and completeness of such information is not guaranteed by us. Emerald Asset Management PA, LLC | 717-556-8900 | 3175 Oregon Pike, Leola, PA 17540 Want to change how you receive these emails? You can unsubscribe from this list. ———————————————————————————- The statements above are supplied for educational purposes only. The statements depict the viewpoints and opinion of the author and are not necessarily the views of Emerald Asset Management or its affiliates. The information described herein is taken from sources which are believed to be reliable, but the accuracy and completeness of such information is not guaranteed by us.