The Investment Committee members met on the afternoon of Monday, May 5th. This comes as the S&P 500 just experienced a nine-day winning streak. The streak began on April 22, 2025, and continued through May 2, 2025. The last time the S&P 500 had a nine-day winning streak was November 2004. This recent streak is noteworthy, as the Dow Jones Industrial Average also had a nine-day winning streak, making it the first time in 33 years that both indexes had nine consecutive days of gains. 

This comes as the benchmark index fell approximately 15% from April 2nd through April 7th after President Trump's trade/tariff announcements. From April 8th through May 2nd, the market rebounded approximately 17%, leaving the index approximately where it began its 30-day journey. A time traveler who skipped ahead a month would be forgiven for thinking that the market had been quite boring during that time. However, for those of us who lived through the headlines over the last 30 days, we know nothing could be further from the truth, as we experienced a significant amount of headline driven anxiety and volatility, as you can see in the chart below showing the performance of the S&P 500 index year to date.

^{Source: BigCharts}
Markets have been driven by daily headlines and sentiment much more so than actual economic data and corporate earnings, which have come in better than expected over the last month. According to FactSet, as of May 2nd, for the 1st quarter of 2025, 72% of S&P 500 companies reported actual results, 76% of S&P 500 companies reported a positive EPS surprise, and 62% of S&P 500 companies reported a positive revenue surprise. The blended (year-over-year) earnings growth rate for the S&P 500 is 12.8%. This would mark the second-straight quarter of double-digit earnings growth reported by the index. 

The April 2025 unemployment report shows a steady unemployment rate of 4.2% and 177,000 jobs added. This suggests that the labor market is holding relatively steady despite economic challenges like tariffs and trade policy uncertainty. At the same time, the inflation rate has continued to tick lower. The consumer price index rose 2.4% for the 12 months ended in March, down from 2.8% the previous month, the U.S. Bureau of Labor Statistics reported on April 10th. Additionally, the “core” CPI—a measure that strips out volatile food and energy prices—fell from 3.1% to 2.8%, the lowest level since March 2021.

As was widely expected, GDP growth was slightly negative for the first quarter, with the initial reading at -.3%. A sharp surge in imports primarily drove this as companies front-loaded inventory and consumers bought goods before tariffs kicked in, which could potentially drive prices higher in the near term. Without the significant increase in imports, which rose 41% year over year, GDP for the quarter would have been strongly positive, as you can see in the chart below.

^{Source: The Daily Shot}
Against this backdrop, most diversified portfolios have held up surprisingly well, as weakness in U.S. stock market indices was largely offset by gains in other asset classes, including dividend-focused stocks, foreign stocks, bonds, and gold. This should be a strong reminder that diversification usually works well. This means you will never have all of your eggs in one basket going up in exchange for never having all of your eggs in one basket that is going down. This helps us meet our goal of obtaining a reasonable level of risk while having less volatility in portfolios over time.

We would also like to remind you that significant rebounds often follow sharp market drops. This is somewhat akin to pushing a beach ball underwater. The further you push the beach ball down, the higher it will soar when the forces holding it are released. Our final chart below illustrates this.

Warren Buffett put the recent market volatility and dislocation in perspective during his annual meeting on Saturday. "What has happened in the last 30, 45, 100 days," Buffett says, "is really nothing. This is not a huge move." Buffett says the recent moves in the stock market "have not been a dramatic bear market or anything of the sort." We have often stated that Mr. Buffett is the most admired but least emulated investor over the last 50 years. We should pay attention to his advice and wisdom.

The investment committee continues to appreciate your trust in our team and our process. As always, we are here for you, as well as your friends and loved ones, especially if they do not have a trusted advisor relationship. Please reach out to your advisor if you have specific questions about your unique family and financial situation. Thanks and have a great day.

Investment Committee Members

• Kevin Myers, Financial Advisor - 30A Wealth Management
• Jesse Hurst, Financial Advisor - Chair, Impel Wealth Management
• Clint Gautreau, Financial Advisor - Horizon Financial Group
• Nathan Ollish, Financial Advisor - Impel Wealth Management
• Grace Hayden MacNaught, Financial Advisor - Atlanta Planning Group
• Dusty Green, Financial Advisor - Spencer Financial

The views stated in this piece are not necessarily the opinion of Cetera Advisors LLC and should not be construed directly or indirectly as an offer to buy or sell any securities. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.

Past performance does not guarantee future results. Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing. Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards.
Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.  

A diversified portfolio does not assure a profit or protect against loss in a declining market. Re-balancing may be a taxable event. Before you take any specific action be sure to consult with your tax professional.
The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe and is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.

The CBOE Volatility Index (VIX) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices.

The Bloomberg U.S. Aggregate Total Return Value Unhedged Index, also known as ‘Bloomberg U.S. Aggregate Bond Index’ formerly known as the ‘Barclays Capital U.S. Aggregate Bond Index’, and prior to that, ‘Lehman Aggregate Bond Index’, is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate pass-throughs), ABS and CMBS (agency and non-agency).