The negative wealth effect

Summary

Marketplace Podcast Summary: "The Negative Wealth Effect"

Release Date: April 1, 2025
Host: Kristen Schwab
Host for this Episode: Kristen Schwab in place of Kai Ryssdal

---

Introduction

In this episode of Marketplace, host Kristen Schwab delves into the nuanced impacts of economic shifts on various sectors, highlighting the negative wealth effect. The discussion spans the labor market's stability, the repercussions of new tariff policies, the auto industry's pivot away from subcompact cars, and the broader psychological effects of declining stock markets on consumer behavior. Additionally, the episode features firsthand accounts from small business owners and farmers navigating these turbulent times.

---

Labor Market Stability Amid Uncertainty

Jolts Report Overview Kristen begins by discussing the latest Job Openings and Labor Turnover Survey (Jolts) from the Bureau of Labor Statistics, which indicates a steady labor market:

• Job Openings: 7.6 million (February), unchanged from January.
• Hires: 5.4 million (February), steady from the previous month.
• Quits and Layoffs: Minimal changes observed.

Key Insights:

• Stable Labor Market: Overall, the data suggests a consistent labor environment despite broader economic uncertainties.
• Small Business Layoffs: An uptick in layoffs among businesses with fewer than 10 employees, signaling potential vulnerabilities.

Notable Quotes:

• Ron Hetrick, Senior Labor Economist with Lightcast:
  “[05:03] “Everybody just freezes, really. Small businesses, though, were laying off workers at a higher rate than anyone else.””

• Pavlina Cherneva, Economist at Hubbard College:
  “[03:06] “That's an indicator to watch because even though firms with fewer than 10 workers represent just about one eighth of total employment, to me their behavior is a bellwether for overall trends in the economy.””

Analysis: Economist Lindsey Owens explains that small businesses, lacking the financial buffers of larger firms, respond more swiftly to economic changes by adjusting their workforce. This behavior is critical as it often preludes broader economic trends.

---

Impact of New Tariffs on Businesses

President Trump's Tariff Announcements The episode shifts focus to President Trump's recent announcement of a 25% tariff on imported vehicles, light trucks, and auto parts, set to commence on April 2, dubbed Liberation Day. The uncertainty surrounding additional potential tariffs creates significant challenges for importers and businesses reliant on foreign components.

Business Perspectives:

• Logistics Plus Insight:
  Lindsey Owens, Customs Broker Manager at Logistics Plus, Erie, PA, discusses the complexities of navigating the new tariff landscape: “[05:50] “We have the steel and aluminum tariffs that are in effect, and then we have a bunch of other tariffs that are going into effect tomorrow... It gets a little.””

• Operational Challenges:
  The need to meticulously break down components to apply tariffs correctly has placed importers in a precarious position, balancing between storage costs and unforeseen tariff expenses.

Notable Quotes:

• Lindsey Owens:
  “[09:15] “It's really hard to plan when... you don't know what's going to happen from day to day sometimes.””

• Gretchen Blau, Customs Broker Manager:
  “[08:56] “Buy America. It's not always the alternative... it’s going to take some time to build the plants and get things operational.””

Consumer Sentiment: Despite public pressure to “buy American,” the pragmatic challenges of sourcing domestically are evident, as many products still depend heavily on foreign components. The uncertainty hampers long-term planning for businesses, forcing a reactive rather than proactive approach.

---

Automotive Industry Shifts Away from Subcompact Cars

Decline of Subcompact Models The auto industry is witnessing a strategic move away from subcompact vehicles, with major manufacturers like Mitsubishi and Nissan discontinuing models such as the Mirage and Versa. This trend reflects shifting consumer preferences towards larger vehicles like SUVs and trucks.

Market Dynamics:

• Affordability vs. Demand:
  While smaller cars are more affordable, consumer preference is tilting towards vehicles that offer greater cargo capacity and versatility.

• Profitability Factors:
  Larger vehicles present higher profit margins for manufacturers. Patrick Olson, Editor-in-Chief at Carfax, points out that bigger SUVs and pickups can be produced on similar platforms as smaller cars but fetch higher prices due to demand.

Notable Quotes:

• Jessica Caldwell, Head of Insights at Edmunds:
  “[13:00] “It's just that a large enterprise is like a supertanker, it takes time to turn around... making it easier to meet those standards than it is for the smallest of vehicles.”””

• Patrick Olson:
  “[13:35] “A lot of Americans are dealing with financial difficulties right now... Automakers have responded to that declining demand by dropping smaller vehicles from their lineups.””

Regulatory Influence: Federal fuel economy regulations incentivize manufacturers to produce larger vehicles, as meeting mileage standards is more straightforward with bigger models. This regulatory environment further accelerates the decline of subcompact offerings in the market.

Consumer Impact: The reduction in affordable small cars presents challenges for cost-conscious consumers, who may find it difficult to purchase larger, more expensive vehicles amidst rising economic pressures.

---

The Negative Wealth Effect and Consumer Behavior

Stock Market Declines Krisen opens a discussion on the negative wealth effect, where declining asset values (stocks and investments) lead consumers to feel less wealthy and subsequently reduce spending.

Market Performance:

• Stock Indices:

  • Dow Jones Industrial Average: Slight decline to 41,989 points.
  • Nasdaq: Gained 150 points to close at 17,449.
  • S&P 500: Dropped 21 points to end at 56,330.

• Corporate Moves:

  • Capital One's Acquisition of Discover: The DOJ nears approval, impacting financial stocks.
  • Rocket's Acquisition of Mr. Cooper Group: Shares rose by 4% and 6%.

Expert Insights:

• Kathy Bostjancik, Economist at Nationwide:
  “[20:06] “There'll be a psychological impact when you see this sharp decline in equity prices.””

• Sam Stovall, CFRA Research:
  “[20:18] “A sharp decline followed by a quick rebound... doesn’t usually lead to a prolonged downturn.””

Despite historical resilience, the emotional toll on smaller investors, particularly those nearing retirement, is significant. Olivia Mitchell from the Wharton School underscores the heightened anxiety among individuals aged 55 and up, whose retirement accounts are particularly vulnerable.

Notable Quotes:

• Olivia Mitchell, Wharton School:
  “[21:00] “A lot of financial advisors advocate just ride the bumps, you'll be all right in the long run.””

• Rob Hayworth, U.S. Bank Asset Management:
  “[21:06] “Mitchell is over 70 and not really listening.”” (Highlighting skepticism towards traditional advice.)

Consumer Spending Resilience: Contrary to expectations, declines in stock markets do not always translate to reduced consumer spending. Robust employment and income growth often counterbalance the negative sentiment stemming from investment losses.

---

Agriculture Sector's Struggles with Trade Policies

Farmer Sentiment Index Declines Kristen reports on the Purdue University Farmer Sentiment Index, which shows a dip in March, signaling farmers' growing concerns over trade policies.

Key Drivers:

• Trade Policy Anxiety:
  Over 40% of farmers cite trade policy as their primary source of pessimism, fearing retaliatory tariffs that could diminish export opportunities for crops like corn, soybeans, and barley.

• Expectations for Relief:
  Two-thirds of survey respondents anticipate federal relief measures similar to those implemented during the previous trade war, hoping for financial support amidst declining market conditions.

Notable Quotes:

• Kristin Owen, Managing Director at Oppenheimer:
  “[22:17] “Compensation like the billions in federal relief paid to farmers during the last Trump administration trade war.””

• Josh Gackle, American Soybean Association:
  “[23:10] “Farmers would much, much rather have an open and fair and free market that we can sell our products to.””

Community Impact: In rural areas, the local economy is tightly interwoven with agricultural performance. Discussions among farmers about crop prices reflect widespread anxiety, as shifting trade policies directly influence their livelihoods.

---

Service Industry Challenges: A Case Study of a Vinyl Listening Bar

Bad Medicine in Cleveland, Ohio The episode features Brian Tetrakis, co-owner of Bad Medicine, a unique vinyl listening bar facing operational challenges amid rising costs.

Operational Insights:

• Cost Management:
  Rising prices of key ingredients, such as eggs used in cocktails, force the bar to innovate with alternatives like Aquafaba (chickpea water) to maintain product quality without increasing prices.

• Financial Strain:
  Initial months were financially negative due to high expenditures associated with establishing the business. However, recent months have shown positive cash flow as the business stabilizes.

Notable Quotes:

• Brian Tetrakis, Co-Owner of Bad Medicine:
  “[26:20] “The bar has been negative the first couple months, but it was predominantly because we were doing so much spending as we were learning the space.””

• Lindsey Owens:
  “[15:07] “At least until the summer. Bedard expects to have Mirages available on his lot after that.”” (Note: Context might refer to another segment; ensure quotes are correctly attributed.)

Creative Outlet and Personal Fulfillment: Brian emphasizes the importance of the bar as a creative outlet, providing personal satisfaction that contrasts with the financial pressures of running a business under current economic conditions.

---

Automotive Sales Surge Ahead of Tariffs

Ford's Retail Sales Spike In a final economic highlight, Kristen reports a noteworthy 5% increase in Ford Motor Company's retail sales last quarter, attributed to consumers rushing to purchase vehicles before the new tariffs take effect.

Details:

• Ford Maverick:
  The compact pickup truck set an all-time monthly sales record in March, underscoring consumer urgency to bypass impending tariff-induced price hikes.

Notable Quotes:

• Daniel Ackerman:
  “[14:51] “How much planning can you do for the next few months or the year ahead? Or is it just more of a day by day, in the moment kind of work?”” (Related to tariffs and business planning.)

• Lindsey Owens:
  “[15:30] “The biggest driver we see for consumer spending is really do people have jobs and are their incomes growing.”””

Market Implications: The surge in vehicle purchases reflects consumer attempts to mitigate the impact of rising costs due to tariffs, indicating a short-term shift in spending behavior driven by policy changes.

---

Conclusion

Kristen Schwab's episode on "The Negative Wealth Effect" offers a comprehensive exploration of how shifting economic policies and market dynamics influence various sectors. From the resilience and vulnerabilities within the labor market to the strategic pivots in the automotive industry, and the psychological ramifications of declining asset values on consumer behavior, the episode underscores the intricate interplay between policy, market forces, and individual livelihoods. Through expert analysis and real-world stories, Marketplace provides listeners with a rich understanding of current economic challenges and their multifaceted impacts.

---

Notable Contributors:

• Kristen Schwab: Host and Reporter
• Ron Hetrick: Senior Labor Economist, Lightcast
• Pavlina Cherneva: Economist, Hubbard College
• Lindsey Owens: Executive Director, Groundwork Collaborative
• Patrick Olson: Editor-in-Chief, Carfax
• Gretchen Blau: Customs Broker Manager, Logistics Plus
• Jessica Caldwell: Head of Insights, Edmunds
• Rob Hayworth: U.S. Bank Asset Management
• Olivia Mitchell: Wharton School Economist
• Brian Tetrakis: Co-Owner, Bad Medicine Bar
• Josh Gackle: American Soybean Association

For more insights and detailed discussions, tune into the full episode of "Marketplace."

Transcript

[Tim Bedard]

And here we have a specimen from the early 2000s, a legacy investing platform.

[Kristen Schwab]

Please don't touch the exhibit folks. It could crash.

[Tim Bedard]

Ready to step out of the Financial history museum? At public.com you can invest in almost everything stocks, bonds, options and more.

[Kristen Schwab]

You can even put your cash to.

[Tim Bedard]

Work at an industry leading 4.1% APY.

[Kristen Schwab]

Leave your clunky, outdated platform behind.

[Tim Bedard]

Go to public.com and fund your account in five minutes or less.

[Kristen Schwab]

Paid for by Public Investing, Inc. Member FINRA and SIPC.

[Daniel Ackerman]

Full [e-mail] Disclosures Certified financial planners are ethical, educated and experienced professionals committed to acting in your best interest. That's why when it comes to your finances, it's gotta be a cfp. CFP Professionals commit to high ethical standards and must pass a rigorous exam before becoming a Certified Financial Planner. CFP Professionals offer financial planning services that take a more comprehensive view of your personal circumstances and and are customized for your needs. Find your CFP professional [e-mail] today we'll.

[Kristen Schwab]

Talk jobs, dwindling 401ks and the disappearance of the subcompact car. And of course, we'll cover tariffs too. From American Public Media, this is Marketplace in New York. I'm Kristen Kristen Schwab in for Kaira's doll. It's Tuesday, April 1st. Good to have you with us. The headline number of the day has nothing to do with the T word, though we will get to tariffs in a bit. Today we kick things off with the Jolts report or the Job Openings and Labor Turnover Survey out this morning from the Bureau of Labor Statistics. Changed little is the phrase of the day. February saw 7.6 million job openings and 5.4 million hires, both about the same as in January. And the number of quits and layoffs didn't change much either. Remember, February's numbers do not reflect the bulk of federal layoffs. We might get a better picture of that come the March jobs report out on Friday. Overall, though, this Jolts data shows what looks like a steady, decent labor market. With one asterisk. Layoffs were up at the smallest of small businesses. That's companies with fewer than 10 workers. Marketplace's Daniel Ackerman looked into small business staffing decisions.

[Ron Hetrick]

Eric Saunders runs Carolina Landscaping and Cleanup near Myrtle Beach, South Carolina. He's got just a couple full time employees and with major question marks over how much his customers are willing to spend these days, he sure isn't hiring.

[Gretchen Blau]

Yeah, holding steady unless the market changes to where people aren't so worried about every little cent they have. It's kind of hard to do anything.

[Ron Hetrick]

Right now with laborers holding steady in the face of uncertainty was kind of the theme of today's Jolts report, says Ron Hetrick, senior labor economist with Lightcast.

[Kristen Schwab]

Workers don't want to go anywhere, Employers don't want to hire.

[Ron Hetrick]

Everybody just freezes, really. Small businesses, though, were laying off workers at a higher rate than anyone else. Pavlina Cherneva, an economist at Hubbard College, says that's an indicator to watch because even though firms with fewer than 10 workers report represent just about one eighth of total employment, to me their behavior.

[Lindsey Owens]

Is bellwether for overall trends in the economy, cherneva says.

[Ron Hetrick]

That's because small firms have no choice but to respond quickly to a changing economy.

[Lindsey Owens]

A small business owner really is working day to day, month to month. They don't have savings, liquidity, access to credit nearly to the same extent as a big company would.

[Ron Hetrick]

So when small businesses feel the need to cut costs, reducing workforce is a tempting lever to pull, says Lindsey Owens, executive director of progressive think tank Groundwork Collaborative.

[Daniel Ackerman]

Our measures of small business uncertainty have skyrocketed. And so for me, it is no surprise at all that we're starting to.

[Kristen Schwab]

See the layoffs in small businesses.

[Ron Hetrick]

But sentiment has soured among businesses of all sizes, says Guy Berger of economic research nonprofit the Burning Glass Institute. It's just that a large enterprise is.

[Patrick Olson]

Like we always joke, is a supertanker, right? It takes time to turn around, so.

[Ron Hetrick]

Changes to headcount might take an extra month or two to play out. I'm Daniel Ackerman for Marketplace Wall street.

[Kristen Schwab]

Today a little up, a little down as it waits to hear more on tariff policy. We'll have the details when we do the numbers tomorrow. On April 2, or what President Trump has been calling Liberation Day, the US intends to impose a 25% tariff on imported vehicles, light trucks and auto parts, which were announced last week. There may be other tariffs on the table, but Trump has not yet announced his full plan. The thing about ever shifting and unannounced plans is they're hard to plan for. So we called up one of our regulars. Gretchen Blau is a customs broker manager at Logistics plus in Erie, Pennsylvania. Hi Gretchen. How are you?

[Lindsey Owens]

Good.

[Kristen Schwab]

Is that a loaded question right now?

[Lindsey Owens]

Yeah, this week it kind of is.

[Kristen Schwab]

Can you catch me up on what's happened since we last heard from you? What is work like right now?

[Lindsey Owens]

Well, it's a little crazy. We have the steel and aluminum tariffs that are in effect, and then we have a bunch of other tariffs that are going into effect tomorrow. The steel and aluminum, that has the 25% tariff on it with no exclusions, no exceptions. But there's also some finished goods that have this tariff on it as well, where if a large component of steel or aluminum in the finished good, we basically need to break everything out into a bill of material and then that 25% only applies to the steel or the aluminum and then the rest doesn't have the 25%. So that's presenting a problem for a lot of our importers because none of us were expecting that if they don't have that information, then everything has the 25% apply to the entire good. Which no one really wants that to happen either. But you have to weigh what costs more, the storage or the tariff at this point.

[Kristen Schwab]

Right? Well, that's a lot of ins and outs. How do you even, how do you even keep track of all the nitty gritty when the rules are constantly changing and you know, I assume you guys dot all your I's and cross your t's.

[Lindsey Owens]

Oh, it's not always easy. Mostly we're relying on the Federal Register when it's updated, but that's not always updated right away. We used to have fact sheets available on the government websites and those seem to have gone away. So we're relying a lot on just news publications and whatnot to get a lot of the information as to how things are going to apply because we don't have things readily available. So we're trying to keep our customers up to date and our operations folks up to date. And it's not always easy to do that when we're not quite sure what's going to happen. For example, tomorrow there's scheduled to be 25% on Canada and Mexico and also retaliatory tariffs which we aren't quite certain what those are going to include for other countries.

[Kristen Schwab]

You know, I talked to, I talked to a small scale banana importer yesterday who was talking about how she just doesn't have a lot of alternatives. She's got to import from Mexico.

[Lindsey Owens]

Right.

[Kristen Schwab]

What are you hearing from your clients about buying in America or buying American?

[Lindsey Owens]

Well, you know, you see that a lot on comments on Facebook posts and whatnot. But that's not always, that's not always realistic. There's a lot of stuff that you can buy that's made in America that has foreign components and you know, it hurts manufacturers here because now they have to pay more for their components. Buy America. It's not always the alternative. And the other thing is if the manufacturing does come back to the United States for these component parts, it's going to take some time to build the plants and get things operational in order to source them here in the U.S. hmm.

[Kristen Schwab]

You know, as somebody who has an intimate look on the ground of how tariffs are impacting businesses, also your own work, how much planning can you do for the next few months or the year ahead? Or is it just more of a day by day, in the moment kind of work workplace right now?

[Lindsey Owens]

Well, it tends to be just an in the moment type thing. It's really, it's really hard to plan when, as we saw, as we saw with the tariffs with Canada and Mexico, they're on again, they're off again, they're on again, they're off again. You don't know what's going to happen from day to day sometimes. And plus the retaliatory tariffs, we don't even know what those are going to be.

[Kristen Schwab]

Do you have a long day ahead of you? What are your work days like right now?

[Lindsey Owens]

My work days are answering a lot of questions. A lot of upset importers right now, kind of, you know, explaining everything to everyone, having people that aren't too happy because they had something on the water in order to import it, it cost 25% more than they were expecting. And people try and explain to me that, you know, they've had this purchased for six months, why do they have to pay this now? And I really don't have a good answer for them because I'm just the messenger, unfortunately.

[Kristen Schwab]

Gretchen Blau is a customs broker manager at Logistics plus in Erie, Pennsylvania. Gretchen, thanks so much for coming back on the show.

[Lindsey Owens]

Thank you.

[Kristen Schwab]

As we just talked about, cars are likely to get more expensive because of tariffs. And this is against the backdrop of the trend of cars getting more expensive because recently the auto industry has been phasing out some of its lowest priced vehicles. Mitsubishi ended production of the Mirage in December, so it'll likely be gone from dealer lots by this summer. And Nissan reportedly plans to discontinue the Versa after this year. These are the last two new car models with starting prices under $20,000, according to Car and Driver Marketplace's Henry Epp reports on the disappearing slight subcompact.

[Tim Bedard]

There's nothing fancy about the 2024 Mitsubishi Mirage. It's a small car available as a hatchback or a sedan. Tim Bedard shows me the sedan version in black at the Mitsubishi dealership he owns near Burlington, Vermont.

[Lindsey Owens]

It has the power locks, the windows, cruise control tilt steering wheel, air conditioning. You know, it has enough amenities to.

[Tim Bedard]

Make it comfortable, but there's no getting around the fact that that there's just not a lot of room inside. Though its small size, Bedard says, contributes to its real selling points, the beauty.

[Lindsey Owens]

Of the car is price TAG warranty.

[Tim Bedard]

Fuel efficiency $18,000 10 year warranty 39 miles per gallon better than any car that isn't a hybrid. And that sticker price $30,000 less than the average new car right now, according to Kelley Blue Book. Bedard says it makes sense that about a third of the new vehicles he sells are Mirages, though they're not likely many heads.

[Gretchen Blau]

No one's like, oh wow, you have a Mirage.

[Kristen Schwab]

Wow.

[Gretchen Blau]

Cool.

[Tim Bedard]

Clayton Seams of Toronto bought a 2021 Mirage a couple years ago. He's an editor with the Canadian automotive publication Driving CA, and he had some strict criteria when he was shopping for his own car.

[Gretchen Blau]

I had $15,000 cash. I want a car I could buy without a car loan or a lease.

[Tim Bedard]

And he wanted something that was easy to drive and park in the city. The Mirage fit the bill, and despite its limitations, it's very noisy at highway.

[Gretchen Blau]

Speed and the stereo is honestly not very good.

[Tim Bedard]

He actually really likes it.

[Gretchen Blau]

It just felt like driving a car from the 90s that was back and it was simple. It had a manual transmission. It was charming in a way of how basic it was.

[Tim Bedard]

But basic is not what most car buyers are looking for these days, says Jessica Caldwell, head of insights at edmunds.

[Kristen Schwab]

We like SUVs, trucks, vehicles with just more cargo capacity. So even if it is a bit on the smaller side, it still is more of an SUV format rather than a sedan format with a trunk.

[Tim Bedard]

For years now, she says, sales of larger vehicles have been climbing. Affordable smaller cars, on the other hand.

[Daniel Ackerman]

We'Re just seeing the demand for these.

[Kristen Schwab]

Vehicles go away, despite the fact that.

[Daniel Ackerman]

A lot of Americans are dealing with.

[Kristen Schwab]

Financial difficulties right now, Caldwell says.

[Tim Bedard]

Automakers have responded to that declining demand by dropping smaller vehicles from their lineups. The Ford Fiesta, Toyota Yaris, Honda Fit. All gone. But the change isn't just about consumer preferences. Bigger vehicles are more profitable because making a subcompact isn't that much cheaper than making an SUV, says Patrick Olson, editor in chief at Carfax. Some newer SUVs are even built on the same platforms as the old subcompacts. Honda's HR V, for example, is the sibling of that discontinued Honda Fit.

[Patrick Olson]

So for not a lot more cost and material in terms of aluminum or steel to build the car, they could put a higher price tag on it because there was more demand for that vehicle.

[Tim Bedard]

Federal fuel economy regulations play a role, too. The Trump administration is currently reviewing them, but right now they require smaller vehicles to get better mileage than bigger ones. Olson says that gives carmakers an incentive to go large, bigger SUVs, bigger pickup.

[Patrick Olson]

Trucks, because it's easier to meet those standards than it is for the smallest of vehicles.

[Tim Bedard]

The industry's increasing focus on larger vehicles has thrown the new car market out of whack, according to Burlington Mitsubishi owner Tim Tim Bedard.

[Lindsey Owens]

With the influx of SUVs and crossovers.

[Kristen Schwab]

That have taken over the market, we.

[Lindsey Owens]

Kind of lost sight that life was and has gotten very expensive for most people and can't afford an average crossover SUV of $30,000. What's the consumer do now?

[Tim Bedard]

At least until the summer. Bedard expects to have Mirages available on his lot after that. A used vehicle might be the price conscious consumer's best option, but they're 32% more expensive than they were just before the pandemic. I'm Henry App for Marketplace.

[Gretchen Blau]

Coming up, biggest cost fluctuations we're looking at right now. As you can imagine, eggs.

[Kristen Schwab]

Eggs are everywhere. Not just bakeries and breakfast joints, but cocktail bars too. But first, let's do the numbers. The Dow Jones Industrial Average lost 11 points, essentially flat to close at 41,989. The Nasdaq gained 150 points, 9.10percent to finish at 17,449 and the S&P 500 found 21 points, 4.10percent to end at 56.33. The Department of Justice is reportedly close to approving Capital One's buying of Discover for $35 billion. Capital One Financial Corporation lost 0.6%. Discover Financial Corporation fell 1 10%. Meanwhile, the mortgage company Rocket this week announced its acquisition of rival Mr. Cooper Group in a $9.4 billion deal. Rocket shares grew 4 and 4. 10%. Mr. Cooper Group added 4 and 6% tenths percent. Bonds rose. The yield on the ten year T note fell to 4.16%. You're listening to Marketplace.

[Daniel Ackerman]

This podcast is supported by Odoo. Some say Odoo business management software is like fertilizer for businesses because the simple, efficient software promotes growth. Others say Odoo is like a magic beanstalk because it scales with you and is magically affordable. And some describe Odoo's programs for manufacturing, accounting and more as building blocks for creating a custom software suite. So Odoo is fertilizer magic Beanstalk Building Blocks for Business Odoo exactly what businesses need, sign [e-mail] that's o d o o.com this podcast is supported by Masterworks. Is the Smart Money Leaving the US While the S and P struggles to break even, the most popular ETFs for investing in Europe and China keep climbing. Institutional investors are shifting trillions from stocks into alternative investments like private credit and blue chip art. It's estimated that by next year, ultra high net worth individuals could devote up to 11% of their portfolios to fine art and collectibles. Fortunately, diversifying your own portfolio into art no longer requires billions or special connections. Masterworks Art Investing Platform has over a billion dollars of invested capital from active investors. With legends like Picasso and Banksy featured in their previous art offerings, each of Masterworks exits has been profitable, distributing over 60 million to investors. Marketplace listeners get priority [e-mail] marketplace as with any investment, past performance is not indicative of future returns. Investing involves risk Sale returns are not inclusive of unsold works. Important Regulation A disclosures can be [e-mail].

[Kristen Schwab]

CD this Marketplace podcast is supported by Commvault. Businesses can recover data as well as cloud applications and platforms after a cyber.

[Lindsey Owens]

Attack in just minutes with Commvault, so.

[Kristen Schwab]

They can become a continuous business. This is Marketplace. I'm Kristen Schwab. The first business quarter of the year has officially closed. With that comes envelopes and emails of quarterly statements for 401ks IRAs and mutual funds. And unfortunately, those summaries will be full of minus signs showing how much investors lost over the last three months. On this show we often, especially over the last handful of years, we often talk about the wealth effect. Basically how when assets like stocks and homes go up in value over time, people feel richer, even if it's just on paper and are likely to spend more because of it. So what happens when investments shrink? Marketplace's Mitchell Hartman reports.

[Patrick Olson]

Things were going really well for the stock market until they weren't anymore, says Rob Hayworth at U.S. bank Asset Management.

[Kristen Schwab]

In the middle of February we had the S&P 500 touching new all time highs and we finished the quarter in negative territory.

[Patrick Olson]

For the year so far, S&P 500 down 4.5%, Nasdaq down 10%. Economist Kathy Bostjancik at Nationwide says there'll be a psychological impact when you see.

[Lindsey Owens]

This sharp decline in equity prices. That's the negative wealth effect. Consumers start to pull back.

[Patrick Olson]

But here's the thing. For a lot of Americans, the majority of their wealth is in their homes.

[Lindsey Owens]

Latest data continued to show appreciation in home prices, so that in terms of like a wealth effect is still intact.

[Patrick Olson]

And as for stocks, Sam Stovall at CFRA Research says history shows that a sharp decline followed by a quick rebound like we've seen recently doesn't usually lead to a prolonged downturn. But he says most small investors probably don't know that they're the ones that.

[Kristen Schwab]

Are most likely to allow their emotions.

[Patrick Olson]

To become their portfolio's worst enemy. One group that's especially nervous right now, people 55 and up seeing their retirement accounts decline in the midst of rising economic uncertainty, says Olivia Mitchell at the Wharton School.

[Lindsey Owens]

A lot of financial advisors advocate just ride the bumps, you'll be all right in the long run.

[Patrick Olson]

Mitchell is over 70 and not really listening.

[Lindsey Owens]

I myself got basically completely out of US equities about two weeks ago.

[Patrick Olson]

As for whether recent losses on stocks will translate into less spending on stuff, Rob Hayworth at US bank says declines of this magnitude don't always squelch retail sales.

[Lindsey Owens]

The biggest driver we see for consumer.

[Kristen Schwab]

Spending is really do people have jobs and are their incomes growing more, he.

[Patrick Olson]

Says, than the negative wealth effect from a falling stock market? I'm Mitchell Hartman for Marketplace.

[Kristen Schwab]

We got a window this morning into how farmers and ranchers are feeling about the economy. Purdue University's farmer sentiment index slipped in March. Farmers have weaker expectations for the future, with more than 40% of them citing trade policy as the top driver of pessimism. And five year expectations for ag export markets hit an all time survey low. Marketplace's Savannah Peters has more on agriculture's cloudy outlook.

[Kristin Owen]

Farmers are used to dealing with the unknown, says Kristin Owen, managing director with the research firm Oppenheimer.

[Daniel Ackerman]

We usually think about uncertainty coming from weather, coming from pests, and we usually.

[Kristin Owen]

Think of federal policy as insulating the farm economy from those chaotic forces. But right now it's piling on. Owen says farmers who were already stressed about breaking even in a tough commodity price environment now have bigger things to worry about.

[Daniel Ackerman]

Where do we send grain and where.

[Kristen Schwab]

Do we send agricultural products globally?

[Kristin Owen]

If countries targeted by Trump administration tariffs respond with tariffs of their own, demand could fall for American corn and soybeans and other ag exports. Michael Langemeyer, who runs the Purdue survey, says it's sort of surprising farmer sentiment wasn't lower in March.

[Kristen Schwab]

A lot of the respondents are thinking that, yes, it looks like we're going.

[Lindsey Owens]

To have tariffs, they're going to have.

[Gretchen Blau]

A negative impact on farm income, but.

[Lindsey Owens]

They'Re expecting some compensation.

[Kristin Owen]

Compensation like the billions in federal relief paid to farmers during the last Trump administration trade war. Two thirds of respondents to the Purdue survey are expecting something similar. Josh Gackle is with the American Soybean Association.

[Kristen Schwab]

Farmers would much, much rather have an open and fair and free market that we can sell our products to.

[Kristin Owen]

Gackel farms soybeans, corn and barley in Coolum, North Dakota, where he says the mood is pretty jittery.

[Kristen Schwab]

If you go to the local cafe and you sit down at a table with a group of neighbors, the first thing that comes up in the conversation is what is the price of soybeans today? What's the price of corn? What's the price of wheat?

[Kristin Owen]

In his small town, Gackel says everyone's livelihood is tied up in shifting trade policy. I'm Savannah Peters for Marketplace.

[Kristen Schwab]

Yesterday Sabri Benishore did a story on how things have been a bit tough lately for bars and restaurants. Spending has been down and so has hiring. Here's another service industry story, this time from the co owner of a vinyl listening bar. It's the latest installment of our series My Economy.

[Gretchen Blau]

My name is Brian Tetrakis and I am one of the owners of Bad Medicine in Cleveland, Ohio. We call ourselves a listening bar or a hi Fi bar. So we don't do any streaming whatsoever. No Spotify, no Tidal. Everything's played through vinyl records on a vintage hi fi system. A lot of my friends and family, when they come in the first time, they're usually not empty handed. So I just got some cool records from a friend I haven't seen in a while. Over the weekend he stopped by for the first time and brought an Alice Coltrane. I work at Bad Medicine. I would say part time. I think about it all day, every day. I'm shooting emails and working on things on the side. But I do have a full time day job that pays my salary until the bar can do that. We have four front of the house employees currently not including myself. And we have two back of the house employees. One of them is a chef partner and the other one is a part time line cook. Compensating staff is always something that we talk about and you know, make sure that it's appropriate. We're one of the states where you have a tip tax credit where you can pay below minimum wage. We pay well and above that three to five times more. As a matter of fact, the biggest cost fluctuations we're looking at right now as you can imagine, eggs. So egg white cocktails are very much a thing. People request them all the time. But you know, an egg white costs about a dollar now, so it gets a little. We use like the vegan version called Aquafaba. It's chickpea water. It doesn't have the same taste to it. The texture is pretty similar. But as far as not having to raise prices or charge anyone a surcharge or anything like that, it's been pretty dependable. The bar has been negative the first couple months, but it was predominantly because we were doing so much spending as we were learning the space. And the past two months we have not been in the negative at the end of the month. So we're hoping for greener pastures now. It's stressful owning a bar, but it's also very gratifying. My day job, I don't get to be very creative, so I love to go in there, bounce cocktail ideas. That's my creative outlet. That's my place that I get to go and express my work. It's my acrylics. That's, you know, that's Van Gogh paints. I mix whiskey and sugar together.

[Kristen Schwab]

Brian Tetarakis, co owner of Bad Medicine in Cleveland, Ohio. This series only works with your help. Tell us about your [e-mail] myeconomy this final note on the way out. Another note about cars. Saw this in the Detroit Free Press. Monthly auto sales came out today at Ford Motor Company. Sales were down a bit more than a percent compared to the same quarter last year. That's not really the interesting part here because that number includes sales to car rental companies and the like. The interesting part is retail sales were up 5% last quarter. Analysts attribute the spike to consumers trying to get ahead of tomorrow's tariffs. The Ford Maverick saw an all time monthly sales record in March. The Maverick is built and assembled in Mexico. Our digital and on demand team includes Kerry Barber, Jordan Manji, Dylan Muetanen, Janet Wynn, Olga Oxman, Ellen Rolfus, Edward Silver, Virginia K. Smith and Tony Wagner. Francesca Levy is the executive director of Digital and On Demand. And I'm Kristen Schwab. We'll be back here tomorrow. This is apm. If there's one thing we know about social media, it's that misinformation is everywhere, especially when it comes to personal finance.

[Kristin Owen]

Financially Inclined from Marketplace is a podcast you can trust to help you get.

[Kristen Schwab]

Serious about your money so you can build a life you've always dreamed of. I'm the host, Janelie Espinal, and each week I ask experts important money questions, like how to negotiate job offers, how to choose a college that you can.

[Kristin Owen]

Afford and how to talk about money with friends and family. Listen to financially inclined wherever you get your podcasts.