The Dividend Cafe - Thursday - April 3, 2025

Episode Date: April 3, 2025

Market Meltdown: Analysis of the Worst Day Since 2020 David Bahnsen, Chief Investment Officer at The Bahnsen Group, discusses the significant market downturn experienced on April 2nd, marked as the worst day since the COVID-19 pandemic's initiation. The episode addresses the impact of recent announcements from the White House that led to substantial market drops: Dow down nearly 1700 points, S&P 500 down almost 5%, and Nasdaq down 6%. Bahnsen explores potential future scenarios, including the imposition or relaxation of tariffs and their economic implications, predicting either a certain recession or a midyear mild recession based on current policy trajectories. Further insights and comprehensive analysis will be provided in the upcoming Dividend Cafe episode. 00:00 Introduction and Market Overview 00:39 Market Carnage and Key Statistics 01:03 Potential Scenarios and Economic Implications 01:56 Uncertainty and Predictions 02:55 Conclusion and Upcoming Analysis Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to The Dividend Cafe, weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Hello, and welcome to The Daily Recap. This is David Bonson, Chief Investment Officer, Managing Partner at The Bonson Group, coming to you myself today as it was the worst day in markets since 2020, the COVID moment of a global pandemic and worldwide shutdowns, and we've had the worst day in markets today since then, led by the stunning announcements out of the Rose Garden yesterday afternoon, April 2nd.

I will be doing a full dividend cafe tomorrow Friday to thoroughly download, debrief, and analyze what has been done and what the various ramifications are. The Dow today was down almost 1,700 points, just a whisker shy of down 4%. The S&P 500 was down almost 5% and the NASDAQ down 6%. The peak to trough now in the NASDAQ is getting basically a whisker away from bear market territory, S&P not far behind. So when you look at this carnage done in markets and where we go from here, a few things are on the table. All options have to be considered. Do all of these tariffs, as they've been announced, stay on?

Then a recession certainly ensues. There is virtually no doubt about that. Do the weeks ahead, the days ahead, see backtrack waivers carve outs? I quote here, the full modification authority reserved by the president, which is what I've been predicting last week, that we would persist with ongoing uncertainty as the president maintained the discretionary ability to intervene and carve out as he saw fit. In that particular scenario, you may end up with less tariffs imposed, less taxes to the global economy, and yet have to persist with more uncertainty, which would further reduce

capital investment and business activity, and I would argue very likely lead to a mid-year mild recession best case scenario. Or perhaps a third option where an off-ramp is pursued sooner than later under the Ben Stein pretense that which can't happen won't happen. In that scenario, most of the tariffs announced yesterday don't end up happening. I wouldn't argue this is a base case scenario, but it is not an eliminated option. I have reasons to believe it will happen that I'll get into in Divinity Cafe tomorrow. I have plenty of reasons to believe it

won't. There has been a significant amount of analysis, conversations with officials in the White House, conversations with other economists and government officials and people in our orbit that I trust and believe to try to better assess where things stand. The Dividing Cafe will be a holistic summary tomorrow of where we are, what options we face going forward as it pertains to markets, but also as it pertains to the overall economy. But in the meantime, the slacking the markets took today is a byproduct of both the far worse announcement than had been expected combined with the persistent uncertainty.

If the announcement itself had been as bad or maybe even worse than it was, but with finality and with certainty, I suspect markets would not have retraced the way they did today. But the worst case scenario was a really bad announcement with really open-ended uncertainty. That's where we stand now in this particular moment, somewhat bizarrely referred to as Liberation Day. More unpacking of Liberation Day tomorrow in the Dividend Cafe. Thanks so much. Reach out with questions anytime. tomorrow in the Dividend Cafe. Thanks so much. Reach out with questions anytime. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member FINRA and SIPC, with Hightower Advisors LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities LLC. Advisory services

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