A Glimmer of Hope
Author: Greg Valliere
April 7, 2025
IT’S TOO EARLY TO HOPE FOR A SIGNIFICANT RALLY, but the ugly market selloff soon may run out of steam, thanks to five crucial developments that could help establish a floor for battered investors.
HERE ARE SOME SIGNS OF HOPE:
1. REPULICANS WANT THIS TO END: There’s a palpable sense of fear among Republicans on Capitol Hill who worry that the market crash could cost them the House and even the Senate in the 2026 elections.
Watch Ted Cruz, the Texas firebrand senator who adamantly opposes tariffs, which he views — correctly — as taxes. Cruz has a safe seat for nearly six years, and if he attracts other GOP senators, Cruz could become a major anti-tax albatross for Trump.
2. TRUMP OR SURROGATES will begin to negotiate. The first sign of movement came this weekend when Vietnam said it would like to deal; bigger countries are whispering that they also want to negotiate — and Trump will listen.
3. STIMULUS IS COMING: It’s a given that the Federal Reserve will cut rates, probably not as soon as in May but most likely by summer. And fiscal stimulus is also coming — in a massive tax bill that will come into focus this summer or earlier.
4. DEFLATION IS COMING: All of the hysteria over inflation may be exaggerated, in our opinion. The likelihood of market uncertainty and reluctant consumers could bring a bout of disinflation, in our opinion. The price of oil in recent days may be a hint.
5. NO RECESSION: Despite handwringing about a recession, modest growth may persist. It’s difficult to see a recession with 4% unemployment and trillions in monetary and fiscal stimulus coming this summer.
BOTTOM LINE: We think trade wars may persist for many more months, but at some point, the markets may run out of sellers and Republicans will tell Trump to wrap up the tariff war. Another election is always just around the corner, and suddenly the Republicans are looking vulnerable in the next one.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. Our companies deliver excellence in investing in the public and private markets through three business lines: AGF Investments, AGF Capital Partners and AGF Private Wealth.
AGF brings a disciplined approach, focused on incorporating sound, responsible and sustainable corporate practices. The firm’s collective investment expertise, driven by its fundamental, quantitative and private investing capabilities, extends globally to a wide range of clients, from financial advisors and their clients to high-net worth and institutional investors including pension plans, corporate plans, sovereign wealth funds, endowments and foundations.
Headquartered in Toronto, Canada, AGF has investment operations and client servicing teams on the ground in North America and Europe. AGF serves more than 800,000 investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.
For further information, please visit AGF.com.
©2025 AGF Management Limited. All rights reserved.
