Market OverviewWell I think it is safe to say that we have exited the period of calm, quiet and pleasantly upward-trending markets lately! The first quarter of 2025 has been volatile at least and disappointing for US stock markets. Ongoing concerns over global trade and tariffs coupled with lingering inflation has led to a decent pullback in US markets. Mega cap tech stocks that have for so long been the darlings of Wall Street are showing weakness as investors look for safety outside of expensive growth stocks. I’d like to give a quick reminder that regardless of the political climate and policy changes, markets are not predictable. If I had told you in January that the administration would be launching a massive trade war not just against China but with some of our closest trading partners, I imagine very few would have predicted that international stocks would be the best performing asset class for the quarter. And yet, here we are. Historically, markets have not responded well to uncertainty surrounding tax and trade policy. As the current administration has changed course a few times specifically on tariff and trade agreement policies, and has wielded further threats, it is reasonable to expect that we will continue to see volatile markets for the near future at least.1Q 2025 1 Year 3 Year 5 YearLarge Cap US Stocks -4.27%8.25%9.06%18.59%Small Cap US Stocks-8.93%-3.38%0.71%15.09%International Equity6.86%4.88%6.05%11.77%EM Equity2.93%8.09%1.44%7.94%Aggregate Bonds2.63%5.08%0.98%0.02%Index performance is provided as a benchmark. It is not illustrative of any particular investment. An investment cannot be made in an index. Past performance is not an indication of future of results. S&P 500, S&P 600, MSCI EAFE Index, MSCI EM Index, S&P US Agg Bond Index. Returns as of 3/31/25.Economic UpdateFourth quarter Real Gross Domestic Product increased 2.5% year over year (Dec 31, 2024). Current live GDP estimates for the first quarter of 2025 range from -2.8% (Atlanta Fed GDPNow) to a consensus Wall Street average of 0.3% per CNBC. It’s safe to say that a decrease from the “norm” of the past several years should not be a surprise when we get final figures.The housing market looks very stable still through the most recent data that we have. The Case-Shiller National home price index gained 4.1% year over year in January. Inventories are increasing, and mortgage rates have evened off, slightly below levels from a year ago. Inflation remains stubborn without a material decrease in the last few quarters, although we are still very close to the long term Federal Reserve target of 2-3% and inflation has come well off of the post-pandemic highs from mid 2022. Real personal disposable income has been resilient, showing some small gains year over year. Most recently real DPI was up 1.8% over the previous year. Consumer spending remains strong as well, with year over year gains of 2.7% in February 2025.US unemployment has been very, very slowly creeping up, with the most recent read as of February 2025 at 4.1%. This is in keeping with the trend in rates of job quitting, which has been trending down as workers hold on to their existing positions and are less confident in finding other work.