Alternative Investing Report - April 10, 2025

*as of 4/9; Sources: S&P, BTC, FTSE, DJRE, GOLD

In a big reversal, President Trump instituted a 90-day pause of his controversial reciprocal tariffs, leaving in place 10% tariffs for every country except for China, which is now facing 125% tariffs. The announcement immediately sent the stock market into a frenzy, and by day’s end, the S&P 500 was up 9.5%, the Nasdaq 12% and the Dow Jones Industrial Average 7.8%, all among the biggest daily gains since World War II.

➨ TAKEAWAY: The rally was a much-needed bounce-back for the market, though all three indices remain below their levels when Trump announced the tariffs initially. It is also a 90-day pause, which means there is a chance that the cycle repeats itself in three months. Investors knew that a pause or cancellation of tariffs would lead to a market surge, they just didn’t know when it would happen. A few hours before Trump made his announcement of the pause on social media, he posted “THIS IS A GREAT TIME TO BUY!!! DJT” on Truth Social, which is leading critics to accuse him of market manipulation. One lesson to take away if we walk down this path again is to watch what the President says on social media - he has demonstrated the power to swing the markets wildly.

As markets become riskier - as has been the case in the past week - private credit firms tend to thrive, as more traditional banks step away from the table. According to the global investment firm KKR, private credit has done particularly well during equity sell-offs as investors look for less risky assets. With interest rates still high, private credit can offer a steady rate of return that is significantly less volatile than public markets.

➨ TAKEAWAY: There is still a lot of uncertainty going forward due to tariffs and inflation, and many investors are still looking to shed risk. Investors should keep in mind that in a recession there could be higher rates of default, leading to lower returns on private credit. There are also many companies reliant on Chinese imports that could struggle as long as the trade war continues. Still, as long as the market remains volatile, private credit is one asset class that investors can look to as a port in the storm.

🪙 Crypto recovery: Along with the stock market, crypto reacted favorably to the tariff pause, with the overall market cap rising by more than 6%, Bitcoin jumping by close to 7%, and Ethereum, Ripple, and Solana all posting double-digit gains.

🏡 Best markets for buyers and sellers: Three of the five best cities for buyers right now are in Florida (Miami, Jacksonville, Tampa), while two of the five best cities for sellers are in the Bay Area (San Jose, San Francisco).

🚀 Massive a16z raise: The VC giant is reportedly in talks for a $20 billion AI venture fund, which would be one of the largest VC funds ever and more capital than every VC fund combined has raised so far in 2025.

🏢 CRE sales up: U.S. commercial real estate sales rose by 30% year-over-year in February, with retail and office seeing significant growth in volume, and retail and industrial seeing pricing growth.

📜 Abraham Lincoln auction: A May auction of Abraham Lincoln-related memorabilia at Freeman’s | Hindman in Chicago is expected to bring in more than $4 million, including an estimated $1.2 million for gloves that the President was wearing the night of his assassination.

🏡 Possible recession effects: If the U.S. economy goes into a recession, expect housing prices to fall in areas like the South, which has seen supply outstrip demand, and mortgage rates to likely fall alongside bond yields.

While AI might certainly be the cause of some anxiety and mental health issues, it may also offer a solution - AI therapists. The first randomized clinical trial for AI therapy showed that trained bots produced similar results to humans, and people who got therapy from AI fared better than those who received no therapy at all. With a nationwide shortage of mental health professionals and resources, effective AI therapy bots could be just what the country needs right now.