Weekly Stock Market Update with EP Wealth Advisors Managing Director, Investments -
Adam Phillips, CFA^®, CAIA, CFP^®

Often quoted in major national media, Adam is a Chartered Financial Analyst (CFA^®), a CERTIFIED FINANCIAL PLANNER™ (CFP^®), and has been included on the Forbes NextGen Best-in-State Wealth Advisors 2019 list. He is a member of the CFA Society of Los Angeles and the CFA Institute. Adam helps establish asset allocation strategy as a member of the EP Wealth Investment Committee, which supports all EP Wealth Advisors and their clients. The Committee’s top-down approach to portfolio construction begins with an outlook on the economy’s likely direction, followed by the implications for different economic sectors and asset classes. This culminates in strategic selection of the individual stocks, bonds, mutual funds or other investments deemed most appropriate for each individual client’s portfolio.

Market Update Topics for Week of May 5, 2025

• Year-To-Date Market Returns

• Earning Season Still Productive

• Read On Recent Jobs Report  

• Warren Buffet Retiring Soon

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Video Transcription: 

Rob Black 

Welcome in to the informed investor. Long-term thinking weekly insights. I'm Rob Black. Join me today. The investing manager, Managing Director of Investments at EP Wealth. Adam Phillips, Adam. Remarkable run on Wall Street. I read this morning 9 straight-up days. Record-setting the S&P 500 is now down 2.9% for the year. The Dow Jones industrial average is down 2.8%, and the Nasdaq is down 7.3%. Interestingly, the Russell 2,000 is up 2.9% small-cap companies are having a good year, and the S&P Mid-cap, 400 is down 7.8%. So a lot of positive vibes in the month of April, after a rough month in March, what are your thoughts on the strong market rebound? 

Adam Phillips 

Yeah. Well, look you said it, 9 straight days of gains for the S&P 500. That's the best streak in over 20 years. So actually going back to November of 2004, I think this tells you just how pessimistic investors were coming out of the Liberation Day on April second. So the S. And P. 500. If we just focus on that as a measure of the broad market, it's now trading just above where it was prior to the announcements on April 2. So down, let's call it 7 or 8% from the peak, which was on February 19th, but still, it's recovered everything that it lost Post Liberation Day. So I think about it like a rubber band, right? And so many were pessimistic. You pull that thing all the way back and then snaps back. That's exactly what we saw with this impressive rally. I think the question is, where do we go from here we are still dealing with a lot of tariff uncertainty. We're still living in a world where we are very much headline to headline, and there have been very few details. And so I think the question is, where do we go from here? What is that catalyst to drive stocks higher? But certainly, it's nice to see the rebound that we've seen. I mean the legendary investor, Byron Wein, he used to say. Disasters have a way of not happening, so I don't want to suggest that this is the all-clear. But I think this just tells you it's a great reminder that when things just appear so bearish and so negative. That is often when you can see some really strong returns. And that's exactly what we saw in the month of April. 

Rob Black 

So yeah, Byron Wayne, I used to read his yearly predictions at the end of the year he'd make 10 real predictions and 10 like probably won't happen predictions, and always a source of good financial content. Let's talk about the jobs report because we record this on Monday morning. But the jobs report on Friday came out, and Wall Street seemed to really, really like it. Is that correct? 

Adam Phillips 

Yeah. Well, look! It was, I think, most were able to breathe a sigh of relief that the number, the headline number, came in, and it was better than expected. So we saw 177,000 jobs added in the month of April, and that was better than expected. Now we also saw downward revisions to the prior 2 months, and so that took a little bit of wind out of our sails. So let's call rounding up to about 60,000 in downward revisions, but overall it was good. The unemployment rate remained where it was at about 4.2%, you know. I think for me. You know what one job does. Excuse me, one report doesn't necessarily settle it. We're going to want to wait and see where things go from here. And the reason, I say that is that this, the reference week, and the period when they're actually gathering this information, it always falls on the 12th of the month, and so give or take a few days. And so you think about the timing here. This came shortly after the tariff announcements on April 2, and so did hiring slow after the reference week. We'll see. I think we'll have to wait for the beginning of June to see the May Jobs report and see if there was actually some labor market deterioration. But for now, it says that for as much talk as we're hearing about the threat of a recession and the economy slowing down, it appears the jobs market is still relatively healthy. There is lower demand for labor fact that we're seeing the duration of unemployment continue to rise, meaning that if you're unemployed it's harder to find a job there's employers are less inclined to hire here, but they're not yet laying people off, and so I take that as good news. Certainly, we'll want to wait and see where this goes from here, though. But for now. Yeah, there is a reason to celebrate Friday's report. 

Rob Black 

Kind of want to go back a little bit in the 1st question about how the markets are doing, you said, what's the next catalyst. I kind of forgot. I'm sorry about this, but we're in earnings season. Adam. How is earnings season? Go? I think we're about. I call it 3 weeks. I call it 2 to 3 weeks, and I think we've just finished the second week of earnings season. Any thoughts? 

Adam Phillips 

I'd say. On the whole, it's going better than expected. We're seeing 3 quarters of companies beat expectations. So that's certainly good. We've seen as expected. We've seen a lot of companies not just cut their guidance going forward, but remove it altogether, and that just speaks to the lack of clarity out there, and it feels like most are kind of operating in the dark here as they await some news on tariffs and where things go from here. But on the whole, as far as backward-looking numbers for the most recent quarter, it's gone better than expected of note. We had a handful of the magnificent 7 companies report earnings last week. Actually about. I think it was 40% of the index reported last week. And the market continued to move higher as we talked about earlier. So that just tells you for as much as was on the line last week, companies were able to deliver. And so I think that just tells you what you need to know so far about earnings season is that it's going well. As I've said already a few times on this update, Rob, we're still there's this lack of clarity. So we saw a 90-day pause during the month of April. We're now a month into that pause. And so everyone's focused on July 9. That's when the 90-day pause on these tariffs expires. And so we'll see what kind of progress we've made by then, but already 1 3rd of the way through it. With not a whole lot of clarity. Now we've seen some positive updates in the fact that say, China and the US. Are talked, and we saw Commerce. Secretary Howard Lupnick announced last week that we're very close to our 1st trade deal. He didn't mention who that was with. It could be India or South Korea. It could be Japan. So we'll see there's this lack of detail. But it appears things are moving in the right direction so far, that's good enough for investors. 

Rob Black 

And just tying together what we've talked about. So far. Americans have jobs. They have jobs, they get paychecks, they have paychecks. They spend it in the economy. The economy is filled with publicly traded companies, and they're hitting their bottom lines. This is what the Federal Reserve has to do, and they have a meeting this week. They have to look at the job market. They have to look at the inflation that might come from tariffs, and any thoughts on what the Fed might do. 

Adam Phillips 

Yeah, well, they're not going to do anything this week. So they're starting their meeting tomorrow, which is Tuesday, and it's always a 2 2 day meeting, so they'll conclude on Wednesday they'll come out. They'll announce any changes if they have any. They aren't going to announce anything. That's basically if there's pretty widely expected, I don't want to say guarantee here, but it's pretty widely expected they're not going to do anything. I think. What's going to be really interesting, though, is the press conference that follows where the Fed Chair. Jerome Powell is going to provide some prepared remarks and then take questions from the reporters in the room. I think it's going to be really interesting. So right now the market is expecting the Fed to cut rates 3 times this year with the 1st one, perhaps coming in, let's say around July, but just like everyone else, they're in a wait-and-see. They're in a wait-and-see mode. What the last jobs report on Friday showed is that there's no immediate urgency to provide assistance right now, and so he's probably going to when he talks he's probably going to say, look we're seeing evidence of softening. But so far things appear okay, and the job market. The labor market is still hanging in there. We are mindful of this uncertainty and the upside risk to inflation that is created by tariffs. And so we're going to wait and see here, and we'll take the moves when we need to. But for now, they're not going to do much. Now. 

I think that's really the tone that he's going to try to strike is that they're going to be deliberate in their actions. They're going to wait until they have a little bit more clarity before doing anything. Obviously, I don't think that's going to be what President Trump wants to hear. So we know that, just like every President before him, he wants lower rates. The only difference is that he's more vocal about it, and his displeasure with the current fed chair. But I expect Chair Powell to hold his ground, coming out on Friday, and just say that they're going to wait for a little bit more information. And they with inflationary pressures, persist. They're going to wait until they actually need to cut rates when they see actual evidence of softening the labor markets. I think the question is, and what President Trump is probably thinking is, will it be too late by then? So it's certainly going to be interesting. I think that is one of the highlights that's on tap for this week, so we'll be watching it for sure. 

Rob Black 

There'll be a lot of backseat drivers trying to predict where the economy is going to go. I want to bring up this segment today with a thought I call him the grandfather of investing and the grandfather that I always wanted Warren Buffett. He announced this weekend that he'll be retiring from his company. Berkshire, Hathaway, is one of the greatest American business stories of all time as well as investment stories. I've been in this industry almost 30 years and 30 years ago I wanted to beat Warren Buffett. Now I want to be Warren Buffett, the greatest of all time. What does Warren Buffett conjure in your head when I throw down his name? 

Adam Phillips 

I mean he's you said the grandfather of investing. He's someone that I don't know anyone that doesn't respect what he's been able to do and doesn't listen when he starts talking. There's a reason you could see he's still able to pack a stadium at 94 years old for his annual speech and his annual newsletters. I know a lot of people that that read them, and really hang on every word because he just does have so much wisdom and such great perspectives. And so yeah, I don't think he's necessarily going away. He's stepping down from his role. But I would imagine that when he does have some perspectives to share, I would imagine that he's still going to have a pretty broad audience. 

Rob Black 

I don't know if your family wants you to work for 60 years but may be so healthy that you can, Adam. I'm Rob black for the informed investor long-term thinking weekly insights. He is Adam Phillips, managing director of investments at EP Wealth. Good day.