How Low Can Stocks & Crypto Go? April 28th, 2025 - Driven By Braman Motorcars
Buckle Up: The Markets Are Testing Your Nerves—Here’s What You Need to Know
Bottom Line: My first rule of money... Never let your money and emotions cross paths. This isn’t a doomscroll though after the past week you might feel that you’re living through one. This story is a weekly wake-up call to show you the near-worst-case scenario for stocks and crypto. Why? So, you can plan your financial future with a cool head, not a racing pulse. The odds of a near-worst case outcome almost certainly won’t happen, however if your plan accounts for it – it can help you manage through even the most trying markets like what we’re experiencing right now.
The US stock market is history’s ultimate wealth-building beast. Crypto? It’s minted millionaires from early believers. Fact: Over 90% of the time, investors who try to “time” the market end up poorer than if they’d just stuck to their original investments. This is about dodging that trap.
Here’s how the big three indexes are faring in 2025 so far:
- DOW: -5% (+4% last week)
- S&P 500: -6% (+6% last week)
- Nasdaq: -10% (+8% last week)
What a difference a week makes as stocks posted one of the best weeks in years last week. I mean yeah, there’s all of the challenges we had a week ago remain in place. Trade war? Check. Federal Reserve war? Check. Earnings season? Check. The difference entering this week vs. last week is that there’s a general consensus that worst of what will be with tariff concerns is behind us as President Trump has announced he expects to announce sweeping new trade deals with many countries over the next three to four weeks, and also that the president expects a trade deal at some point with China.
Now, if you want to be skeptical, there’s certainly room for that too. Talk is cheap as they say and the renewed optimism from investors doesn’t mean anything has changed other than the value of assets. Whether real trade deals get done will determine how durable the recent rally may be. Importantly what we saw once again was that once major indexes touched bear market territory once again, a loss of 20% or more from highs, we saw a rally from those levels. As I said, at the peak of the selling early in April. Every bear market in American history has proved to be a historically great time to buy stocks. Early action in this cycle suggests that the streak will remain intact.
This week is an important week for tech earnings. As for what we’ve seen through the early going in earnings season... Entering today 36% of companies had reported earnings. Average earnings growth has paced 10.1% year-over-year which is much better than the 7.2% expected. That’s been an important factor in renewed optimism on Wall Street too.
As for cryptos...
It was the best week of the year for cryptos as more investors have diversified into digital currencies, mostly bitcoin, as a hedge against a weaker US Dollar. That helps the base case by many crypto bulls that bitcoin is in effect “digital gold”. Here’s a look at where they stand.
- Bitcoin: +10%, last -1% YTD
- Ether: +6% last week -47% YTD
- BitwiseETF (Top 10 cryptos): +13% last week, -12% YTD
I can’t value cryptos because they have no inherent value. Stocks, though? They’ve got bones. Let’s break down the S&P 500:
- Current P/E: 27.54
- Historic Avg. P/E: 16.14
Translation: On earnings alone, the maximum downside risk is 41% drop from here—2% more expensive than last week as stock prices advanced faster than fundamentals over the past week. The market is still slightly historically expensive; however, we have seen a 7% improvement in the fundamental value of the market during this correction cycle.
So, What’s Your Move?
If a 41% dip wouldn’t derail your life, you’re probably golden. If it would? Time to call a pro and build a plan that doesn’t leave you sweating bullets—or broke.
The markets don’t care about your feelings. Don’t let them hijack your wallet.