KPA Wealth Weekly: Less Tariffs? What is even going on? Back to Business as Usual?

Welcome to KPA Wealth Weekly, your source for the latest in financial and mortgage markets. Our goal is for each week, to share economic updates, rate trends, and tips to build a strong financial foundation. (Sorry for lack of posting these last few weeks, the trade war has destabilized this blog)

Let’s dive into this week’s highlights!

• Mortgage Interest Rates

• Stock Market Update and Trends

• Financial Numbers This Week

• Real Estate Market Update: Signs of Life for Buyers?

• This Week’s Wealth Strategy

Mortgage Interest Rates

Stock Market Update and Trends

The market has rebounded pretty fast upward. The question most people want to know the answer to is, “Is this a dead cat bounce or an actual V-shaped rebound?”. The market seems to like the fact that both the US and China are showing signs of lowered tariffs and decreasing hostility of this trade war. Will it last? Doubt it but possible. Trade in the US with our partners is a fragile part of the economy, and it has already been beat up pretty bad now.

Key Takeaway: Buy and hold seems like a solid strategy. Buy each market dip, hold some cash, and wait for the next dip down to buy more. Look for stocks that can be little to unaffected by a prolonged trade war and possibly look for stocks with low reliance on China.

Notable Earnings This Week:

This week’s earnings reports presented a mix of outcomes across various industries. Here's a quick summary:

Netflix (NFLX):
Reported strong Q1 earnings with EPS of $5.28 on $9.37 billion in revenue, beating expectations. Subscriber growth exceeded forecasts with 9.33 million new additions, but shares dropped after the company announced it will stop reporting quarterly membership numbers in 2025.

United Airlines (UAL):
Posted EPS of $0.15, topping analyst estimates. Revenue came in at $12.54 billion, up 9.7% year-over-year. The airline reaffirmed its full-year guidance despite ongoing industry-wide cost pressures.

Procter & Gamble (PG):
Reported EPS of $1.52 on $20.2 billion in revenue, beating expectations. Strong pricing power helped offset volume declines. The company raised its full-year sales outlook, boosting shares slightly.

Intuitive Surgical (ISRG):
Beat earnings expectations with EPS of $1.50 and revenue of $1.89 billion. Da Vinci surgical system procedure volumes grew 16% year-over-year, lifting the stock after the report.

Abbott Laboratories (ABT):
Posted EPS of $0.98, slightly ahead of expectations. However, shares slipped after management issued cautious comments about slowing demand in the medical device segment.

ASML Holding (ASML):
Shares fell sharply, dropping over 7%, after the company reported weaker-than-expected Q1 bookings, stoking fears of a broader slowdown in the semiconductor equipment sector despite solid overall results.

Travelers Companies (TRV):
Posted EPS of $4.69, beating estimates thanks to strong underwriting gains. However, shares moved lower after the company warned of rising claims costs due to severe weather events.

UnitedHealth Group (UNH):
Reported EPS of $6.91, slightly above analyst forecasts. However, the stock dropped after management warned of higher-than-expected medical costs, particularly in Medicare Advantage plans.

Goldman Sachs (GS):
Beat earnings expectations with EPS of $11.58 on $14.21 billion in revenue, driven by strength in asset management and trading divisions. Shares gained following the report.

Technology Sector:
The tech sector remained volatile this week. Nvidia (NVDA) and AMD (AMD) led modest gains as investors rotated back into AI-related stocks. However, Taiwan Semiconductor (TSM) shares fell after cautious remarks about future chip demand. Tesla (TSLA) also declined further after reporting weaker vehicle deliveries out of China.These varied results highlight how forward guidance and broader market sentiments can heavily influence investor reactions, even when companies meet or exceed earnings expectations.

Financial News This Week

Here’s a concise summary of this week’s financial news:

Labor Market

Employment Growth:

• In March 2025, the U.S. economy added 228,000 jobs, surpassing expectations and marking the 51st consecutive month of job growth. ​

• The unemployment rate edged up slightly to 4.2% from 4.1% in February, as more individuals entered the labor force. ​

Sector Highlights:

• Healthcare and Social Assistance: Led job gains with 54,000 new positions, reflecting continued strength in the sector. ​

• Federal Government: Experienced a decline in employment, with job losses attributed to budget constraints and policy shifts.

Manufacturing

ISM Manufacturing PMI:

• The ISM Manufacturing PMI for March fell to 49.0, indicating a contraction in manufacturing activity. This decline is attributed to rising input costs and uncertainties stemming from recent tariff implementations. ​

Core Business Goods Orders:

• While specific data on core business goods orders for March is pending, the contraction in manufacturing suggests potential softness in new orders and production levels. ​

Monetary Policy

• The Federal Reserve maintained its current interest rate stance, citing a solid labor market and inflation levels still above the 2% target. Officials emphasized the importance of monitoring economic developments to adjust policy as needed. ​

• St. Louis Fed President Alberto Musalem highlighted the need for a cautious approach to monetary policy, considering the potential impacts of ongoing trade tensions and market volatility. ​

This week’s developments underscore the interconnectedness of labor markets, manufacturing activity, trade policies, and monetary decisions in shaping the economic landscape.

Real Estate: Buy or Sell?

Real Estate Market Update: Rates Volatile. Buyers Showing Up.

📉 Home Sales Dynamics:

• In March 2025, existing-home sales declined by 5.9% month-over-month to a seasonally adjusted annual rate of 4.02 million units, marking the slowest pace for March since 2009. Year-over-year, sales were down 2.4%. This decline is attributed to high mortgage rates and economic uncertainties. ​

• Conversely, new home sales saw a 7.4% increase from February, reaching a seasonally adjusted annual rate of 724,000 units. This uptick is driven by builder incentives and a shift toward more affordable housing options. ​

🏡 Inventory and Listings:

• Housing inventory rose to 1.33 million units at the end of March, an 8.1% increase from February and a 19.8% rise year-over-year. This represents a 4.0-month supply at the current sales pace. ​

• Regionally, inventory growth varied: the West experienced a 40.3% increase, the South 31.1%, the Midwest 17.7%, and the Northeast 11.3%. ​

• Approximately 33.9% of active listings in March had price reductions, the highest share for any March since at least 2018, indicating sellers are adjusting expectations in response to market conditions. ​

📈 Pricing Trends:

• The median existing-home price in March reached $403,700, up 2.7% from a year earlier, setting a record for the month. ​

• New home prices showed a different trend, with the median sales price at $403,600, a 7.5% decrease from March 2024, reflecting builders' focus on more affordable homes. ​

• Overall, home values increased by 0.2% month-over-month in March, the slowest growth for this time of year since at least 2018, suggesting a cooling in price appreciation. ​

💡 Market Outlook:

• Mortgage rates have shown slight volatility, with the average 30-year fixed rate at 6.81% as of April 24, down from 6.83% the previous week. ​

• Affordability remains a challenge, as the typical mortgage payment on a median-priced home consumes about 35.3% of the median household income, exceeding the 30% threshold considered affordable. ​

• Despite these challenges, the increase in inventory and price reductions suggest that buyers may find more opportunities in the current market compared to previous months.​

🏆 Bottom Line:

The real estate market as of late April 2025 indicates a gradual shift towards more favorable conditions for buyers. While high mortgage rates and affordability concerns persist, increased inventory and moderated price growth provide potential opportunities for well-prepared buyers. Strategic planning and staying informed about local market trends are essential for navigating this evolving landscape.

This Week’s Wealth Strategy

Tired of the same old financial advice? Below is a unique, non-mainstream wealth-building strategy tailored for entrepreneurs, realtors, and real estate investors. Each strategy is actionable and designed for meaningful returns or long-term wealth. We break down how to implement them step-by-step, who they’re best for, what you need to get started, and the potential payoff. These aren’t your typical stock-and-bond tips – they’re fresh ideas you won’t hear from traditional finance gurus.

Strategy: “Equity Hacking” – Build Wealth by Partnering with Burnt-Out Business Owners

Overview:

There’s a huge opportunity happening quietly: millions of small business owners (especially Baby Boomers and Gen X) are burned out and ready to exit — but can't find buyers. Instead of buying these businesses outright, you can negotiate equity partnerships where you step in to modernize operations (think digital marketing, CRM systems, hiring virtual assistants) in exchange for minority ownership and profit-sharing.

You don’t need millions to buy a business. You need sweat equity, operational upgrades, and a negotiation framework. Think of it as flipping small businesses — without the debt or risk of full ownership.

How to Implement (Step-by-Step):

Find “Tired but Profitable” Businesses

• Target industries with steady cash flow but poor modernization (plumbing companies, small medical offices, auto repair shops, boutique law firms, accounting firms).

• Look on platforms like BizBuySell, Flippa (for online businesses), Facebook groups, or even drive around your local area and cold call.

Approach with a Partnership Offer

• Instead of offering to buy them, offer to partner.

• Pitch it like: “I’ll help grow your revenue, modernize your business, and handle operations. You retain ownership, but I get 20–40% of net profits.”

Identify 2-3 Quick Wins

• Digitize their lead generation (Google Business Profile, website revamp, SEO, Facebook Ads).

• Automate scheduling, invoicing, and customer communication with low-cost tools (like Calendly, Stripe, Zapier).

• Outsource or systematize parts of operations (virtual assistants for back-office tasks, AI for customer service).

Lock in a Formal Agreement

• Draft a simple profit-sharing or equity agreement with clear deliverables.

• Make sure you have visibility into the books and at least quarterly profit disbursements.

Scale Improvements

• As cash flow improves, you can renegotiate your ownership share or even position yourself to acquire the business outright later — often at a discount compared to market rates.

👥 Who It’s Best Suited For:

• Investors who are good at networking and relationship-building.

• Entrepreneurs who understand basic marketing, automation, or small business operations.

• Anyone looking to create cash flow without starting from scratch or putting up major capital.

Startup Costs & Required Skills:

• Startup Capital: Less than $1,000 for legal templates, initial software upgrades, and possible ad tests.

• Skills Needed: Negotiation, business systems thinking, basic marketing, people management. You can outsource technical work to freelancers.

Potential Returns & Outcomes:

• Monthly Income: Equity stakes can generate $2,000–$10,000+ monthly per business depending on profitability.

• Scalability: You can partner with 2–5 businesses over time, building diversified, semi-passive income.

• Exit Potential: If you later buy out the business (using profits from the partnership), you can own assets at below-market prices.

• Time Freedom: Once improvements are installed and the business is stabilized, your role can shrink to quarterly oversight and strategy check-ins.

Kyle Allgair
CEO of KPA Home Loans
📞 (279) 977-8149 | ✉️ [email protected]
🌐 KPAhomeloans.com

Kyle Allgair is the CEO of KPA Home Loans, with years of experience helping clients build wealth through real estate and strategic financial planning. Contact him for personalized advice on achieving your financial goals.