What Makes It Better & What Makes It Worse

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What’s in Today’s Report:

  • What Makes It Better & What Makes It Worse

U.S. equity futures are stabilizing and market volatility is easing modestly thanks to some positive tariff news overnight.

On the trade war front, optimism about tariff negotiations between the U.S. and Japan sent the Nikkei higher by 6%+ while Chinese shares rallied after the PBOC pledged stimulus efforts to shore up financial markets amid recent volatility.

Economically, the NFIB Small Business Optimism Index fell to a new post-election low of 97.4 vs. (E) 98.9 in March, the latest report to highlight deteriorating business confidence (dovish for Fed policy outlook).

There are no notable economic reports today however the Treasury will hold a 3-Yr Note auction at 1:00 p.m. ET. A strong auction will reiterate last week’s dovish shift in Fed policy outlook amid growing economic uncertainty and add to prospects that a sustainable relief rally is taking shape.

Finally, there is one Fed official scheduled to speak today: Daly (2:00 p.m. ET) and investors will be looking for more encouraging commentary about the outlook for the economy (but without taking a hawkish tone).

 

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Bull vs. Bear: Which Argument Makes More Sense?

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What’s in Today’s Report:

  • Bull vs. Bear:  Which Argument Makes More Sense?
  • Weekly Market Preview:  Will There Be Any Tariff Relief?
  • Weekly Economic Cheat Sheet:  Focus Turns to Inflation (CPI on Thursday)

Futures are sharply lower again (down close to 2%) as there was no meaningful tariff relief over the weekend while administration officials reiterated their support for the current tariff policy.

Trump, Bessent and Lutnick all downplayed the market declines and doubled down on the current tariff policy.

On tariff relief, Vietnam, Japan, the UK and others expressed a desire to negotiate tariffs lower, but nothing concrete occurred.

Today focus will remain on tariff headlines and any headlines that imply tariff relief could cause a sharp rebound, given the intensity of the recent declines.  There is one Fed speaker today, Kugler (10:30 a.m. ET), but she shouldn’t move markets.

The Bull Case vs. the Bear Case (Updated Post Tariffs)

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What’s in Today’s Report:

  • The Bull Case vs. the Bear Case (Updated Post Tariffs)
  • Jobs Day

Futures are sharply lower again (down more than 2%) as there were no incrementally positive trade headlines overnight.

Unsurprisingly, messaging from the White House was contradictory overnight, as President Trump said he’s open to negotiations on tariff reduction while aides said the opposite and the mixed messaging is only increasing investor angst.

Today, trade headlines will continue to dominate markets and any continued mixed/contradictory messaging from the White House will only pressure stocks further, while any evidence that tariff reduction is possible could cause a bounce.

Away from trade, today is the jobs report and expectations are as follows:  131K Job-Adds, 4.2% Unemployment Rate, 4.0% y/y Wage Growth.  If the jobs report is soft, it’ll only make the selloff worse as recession fears rise, while a strong jobs report will likely be dismissed as “outdated” now that we have the new tariff regime.

Finally, Fed Chair Powell speaks at 11:25 a.m. ET and if he’s dovish there could be a mild bounce in stocks, but I’m afraid the Fed can’t really fix this problem for the markets.  There are two other Fed speakers,  Barr (12:00 p.m. ET) and Waller (12:45 p.m. ET) but they shouldn’t move markets.

Is the Tariff Announcement A Bearish Gamechanger?

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What’s in Today’s Report:

  • Is the Tariff Announcement A Bearish Gamechanger?
  • Jobs Report Preview

Global markets are sharply lower as S&P 500 futures fall three percent in response to President Trump’s worse than feared reciprocal tariff announcement.

President Trump announced baseline 10% tariffs on virtually all imports and dramatically higher tariffs on numerous major trading partners, dramatically intensifying the global trade war and spiking global recession concerns.

Today focus will remain on trade and any hint that the announced tariffs could be negotiated lower will help stocks bounce, while the administration dismissing negotiations will only add more downward pressures to markets.

Away from trade, there are several important economic reports today including Jobless Claims (E: 226K) and the ISM Services PMI (E: 53.0).  If those numbers disappoint, the selling will get worse as recession fears surge.  Finally, there are two Fed speakers today, Jefferson (12:30 p.m. ET) and Cook (3:30 p.m. ET), although they shouldn’t move markets.

Tariff Preview (Good/Bad/Ugly)

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What’s in Today’s Report:

  • Tariff Preview – Good/Bad/Ugly
  • Table: U.S. Trade Grievances Visualized
  • ISM Manufacturing PMI and JOLTS Takeaways

A modest risk-off move in global markets overnight intensified during the last hour thanks to reports that China is “restricting companies from investing in the U.S.,” adding to trade war angst ahead of Trump’s tariff announcement.

There were not noteworthy economic reports overnight and no market moving headlines aside from the China/U.S. investment news.

Looking into today’s session, traders will be watching several important economic reports including: The ADP Employment Report (E: 120K), Factory Orders (E: 0.5%), and monthly Motor Vehicle Sales (E: 16.0 million) and there is one Fed official scheduled to speak after the close: Kugler (4:30 p.m.ET).

Unless there are any premature tariff details leaked or released ahead of time, however, the market’s main focus today will be on President Trump’s “Make America Wealthy Again” remarks regarding the administration’s tariff plans which are scheduled to be delivered from the Rose Garden at 4:00 p.m. ET.

Is the Bond Market Warning About an Economic Slowdown?

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What’s in Today’s Report:

  • Is the Bond Market Warning About an Economic Slowdown?

Markets are trading with a risk-off tone to start Q2 this morning with equity futures modestly lower while safe-haven Treasuries and gold rally as traders look ahead to the Trump administration’s looming tariff announcements.

Economically, China’s March Manufacturing PMI rose to 51.2 vs. (E) 50.6.

In Europe, the March Manufacturing PMI rose to 48.6 vs. (E) 48.7, Narrow Core HICP fell to 2.4% vs. (E) 2.6% y/y, and the UE Rate fell to 6.1% vs. (E) 6.2%.

The mostly encouraging global economic data overnight is helping drive overseas equity markets higher this morning despite the weakness in U.S. futures.

Looking into today’s session, a busy week of domestic economic data releases kicks off with the ISM Manufacturing Index (E: 49.6) and JOLTS (E: 7.6 million) both due to be released shortly after the bell.

Additionally, there is one Fed speaker: Barkin (9:00 a.m. ET). Investors will be looking for a dovish tone from Barkin and “Goldilocks” economic data with stable growth and evidence of cooling or at least steady inflation pressures.

 

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Tariff Week

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What’s in Today’s Report:

  • Tariff Week
  • Weekly Market Preview:  All About Tariffs (How Bad Will It Be?)
  • Weekly Economic Cheat Sheet:  Is the U.S. Economy Rolling Over?  (We Get the Big Three Economic Reports This Week)

Futures are sharply lower as articles over the weekend implied the looming tariff announcements could be both chaotic and more far-reaching than previously thought.

The WSJ, Politico, New York Times and others warned the administration’s tariff policy 1) Isn’t yet finalized (raising fears of more policy whiplash) and 2) Is more intense than articles implied last week.

Economically, Chinese economic data was good as March manufacturing and services PMIs both beat estimates.

This week is a potentially pivotal one for markets with Wednesday’s looming tariff announcements and key economic data but it starts slowly as there are no notable reports today.  As such, we can expect tariff preview articles to drive trading (and the more articles point to intense tariffs, the lower stocks will go).

New ETFs for Your Watchlist

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What’s in Today’s Report:

  • New ETFs for Your Watchlist
  • GDP Details Point to Economic Weakness Emerging in Q4

U.S. equity futures are flat to lower this morning as traders continue to digest this week’s fluid tariff and trade war developments ahead of critical domestic inflation data.

Economically, Germany’s GfK Consumer Climate Index came in at -24.5 vs. (E) -22.0 while the official German Unemployment Rate ticked up 0.1% to 6.3% vs. (E) 6.2%. The downbeat German data is weighing on EU markets.

Today, focus will be on inflation data early with the Fed’s preferred inflation metric due out ahead of the bell: PCE Price Index (E: 0.3% m/m, 2.5% y/y), Core PCE Price Index (E: 0.3% m/m, 2.7% y/y). A cooler-than-expected or in-line number will be well-received by investors.

Then after the open, the University of Michigan’s Consumer Sentiment Index will be released (E: 57.9, 1-Yr Inflation Expectations: 4.9%) and markets will want to see a stabilizing headline and steady or lower 1-Yr inflation expectations in order for markets to stage a rebound.

Finally, there are two Fed speakers this afternoon: Barr (12:15 p.m. ET) and Bostic (3:30 p.m. ET). Fed speak has been on the hawkish/cautious side this week so any encouraging commentary or a dovish tone would be welcomed, especially in the wake of “cool” inflation data.

Sentiment Update: A Somewhat Shocking Discovery

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What’s in Today’s Report:

  • Sentiment Update: A Somewhat Shocking Discovery
  • February Durable Goods Takeaway
  • EIA Data Takeaways and Oil Update

U.S. futures are lower with most global equity markets this morning as President Trump announced fresh details about automobile tariffs and other new trade policies after the close yesterday, further raising trade war angst.

Economically, Chinese Industrial Profits edged down -0.3% in February, an improvement from January’s -3.3% print, but the report was not enough to offset tariff worries.

Today, market focus will be on economic data early in the day with Final Q4 GDP (E: 2.4%), Jobless Claims (E: 225K), International Trade in Goods (E: $-135.5B), and Pending Home Sales (E: 2.9%) all due to be released.

Additionally, there is one Fed speaker: Barkin (4:30 p.m. ET) and a few more late-season earnings reports due from SNX ($2.91) and LULU ($5.87) that could move markets (but likely will not given the focus on global trade policies right now).

Charles Dow Would Be Selling Stocks Now

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What’s in Today’s Report:

  • Charles Dow Would Officially Be Selling Stocks Now
  • Consumer Confidence Takeaways – Another Survey-Based Whiff of Stagflation

Futures are slightly lower after a mostly quiet night of news as this week’s so-far-solid gains are digested with investors weighing favorable inflation data out of Europe against simmering tariff uncertainties.

Economically, U.K. CPI fell from 3.0% to 2.8% vs. (E) 2.9% in February with Core CPI down from 3.7% to 3.5%.  The “cool” inflation data is helping U.K. markets outperform European peers this morning.

Today, there is one noteworthy and potentially market-moving economic report due out ahead of the open: Durable Goods Orders (E: -1.0%). A “Goldilocks” report that is no worse than expected should help equities maintain WTD gains while a “too hot” or “too cold” print could spark some profit taking given the tentative nature of this week’s advance.

Additionally, there are two Fed speakers today: Kashkari (10:00 a.m. ET) and Musalem (1:10 p.m. ET), as well as a 5-Yr Treasury Note auction at 1:00 p.m. ET. Less-hawkish commentary from the Fed officials and healthy but not urgent demand for the 5-Yr Notes should be well-received by investors today.

Finally, there are a few noteworthy, late-season earnings reports due out today from DLTR ($2.18), CHWY ($3.19), and JEF ($0.88), but none are likely to have a material impact on the broader market.