Markets are on the move as investors respond to the latest headlines. This week’s Steady Investor breaks down what’s driving sentiment, including:
Retail Sales Tick Higher in March, But Will Strong Sales Last? According to the Commerce Department, U.S. retail sales experienced a notable 1.4% increase in March—the most significant monthly gain since January 2023. The surge was largely driven by consumers making substantial purchases, particularly automobiles, ahead of impending tariffs introduced by the Trump administration. Auto sales alone rose by 5.3%, as buyers aimed to circumvent the anticipated 25% import tax on vehicles. Other sectors, including building materials, sporting goods, and restaurants, also saw increased spending, indicating a broader consumer response to potentially forthcoming price hikes. The March figures represent just one month’s worth of data, but the indication that consumers are pulling forward purchases indicates that there could be an ‘air pocket’ in future months’ spending data. Consumer sentiment has been declining for four consecutive months, and looking ahead, we could see a slowdown in consumer spending as the effects of the tariffs filter through to businesses and consumers.1
How to Safeguard Your Retirement from Inflation’s Impact
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What South Korean and Eurozone Data Tell Us About Global Trade Impact – On “Liberation Day,” the Trump administration imposed a 25% tariff on South Korean imports. Though the tariff was paused just days later, the short-term impact was palpable. South Korea posted a 14.3% decline in exports to the U.S. during the first 20 days of April, compared to the previous year. The downturn was particularly evident in the automotive sector, with automobile exports falling by 6.5% and auto parts by 1.7%. While semiconductor exports saw a 10.7% increase, the overall export landscape remained strained. Meanwhile, eurozone economic data in April also showed signs of deceleration, with business activity teetering on the edge of contraction. The composite Purchasing Managers’ Index (PMI) dipped to 50.1 from March’s 50.9, barely above the 50 threshold that separates growth from decline. The services sector, a key driver of the eurozone economy, contracted for the first time since early 2024, with its PMI falling to 49.7. Meanwhile, manufacturing showed slight improvement, with its PMI rising to 48.7, though it remains in contraction territory. In the UK, outside the EU, the private sector shrank for the first time in 18 months, with export orders slumping.3
Credit Card Companies Posture for a Slowdown – Rising credit card delinquencies are prompting a shift in strategy from major financial institutions. Some are preparing for more slowdown ahead. Delinquency rates have returned to pre-pandemic levels, signaling growing financial strain among some U.S. consumers. In response, major lenders like JPMorgan Chase and Citigroup are padding their loan-loss reserves, and others like U.S. Bancorp are steering toward more affluent customers who are considered better equipped to weather economic stress.
Interestingly, the early stages of President Trump’s latest tariff push haven’t yet impacted financial results, with many banks reporting strong profits in Q1. Consumer spending, borrowing, and credit card openings were still climbing in the first quarter. However, there are signs that this momentum may not last. Spending on travel and entertainment is slowing, while more people are making only minimum credit card payments—an early warning indicator of financial distress. Even as overall consumer confidence appears fragile, high earners continue to carry much of the spending load—now accounting for about half of total U.S. expenditures. This will be a story to monitor closely in the coming months.
Shield Your Retirement from Inflation – Inflation may be unpredictable—but its impact on long-term investors, especially those nearing retirement, is all too real. Rising prices can chip away at your purchasing power and future income.
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