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The Biggest Takeaway from Trump’s Tariff Reversal

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What’s in Today’s Report:

  • The Biggest Takeaway from Trump’s Tariff Reversal
  • Why Are the Dollar and Treasuries Falling? (Not Good)
  • Monthly Bitcoin Update

Futures are modestly higher as markets bounce from Thursday’s declines, despite further trade war escalation.

China increased tariffs on U.S. goods to 125%, further escalating the global trade war, although markets, for now, are digesting the move.

Today focus will remain on economic data via PPI (E: 0.02% m/m, 3.4% y/y) and Consumer Sentiment (E: 55.0).  Like Thursday, better than expected numbers won’t help stocks in the near term (they are totally dominated by trade and global macro trends right now) but it will push back on stagflation fears (which is an underlying positive).

Looking at the Fed, there are several speakers again today, including Collins (9:00 a.m. ET), Musalem (10:00 a.m. ET) and Williams (11:00 a.m. ET), although they shouldn’t move markets.

Finally, earnings season begins in earnest and important reports today include:  JPM ($4.62), BLK ($10.43), WFC ($1.23), and MS ($2.23).

MMT Chart: A Rare Oversold Condition

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What’s in Today’s Report:

  • Market Multiple Table Chart:  A Rare Oversold Condition

Futures are moderately lower (down around 1%) as investors take profits following Wednesday’s massive rally.

There was no new tariff or trade news overnight and investors digested the good news/bad news of no punitive global reciprocal tariffs (positive) but still-in-place 125% tariffs on China and 10% tariffs on most U.S. imports (negative).

Today focus will turn back towards economic data and the two key reports are CPI (E: 0.1% m/m, 2.6% y/y) and Jobless Claims (E: 225K).  A weaker than expected CPI and lower than expected jobless claims will push back against stagflation concerns and help stocks potentially extend yesterday’s rebound.

Turning to the Fed, there are multiple speakers today but they are unlikely to move markets (the Fed is in “wait and see” mode like the rest of us).  Speakers today include:  Barkin (8:30 a.m. ET), Logan (9:30 a.m. ET), Schmid & Bowman (10:00 a.m. ET), Goolsbee & Harker (12:00 p.m. ET).

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).

 

It’s Not Too Late to Send Clients A Quarterly Letter!

Market volatility has surged in the wake of tariffs and clients are nervous.  If you are behind, please let us help! Our Q1 ’25 Quarterly Letter was delivered to subscribers last week, complete with compliance backup and citations.

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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.

The name is still too expensive to buy, Essaye said

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The name is still too expensive to buy: Tom Essaye Quoted on Yahoo Finance

Palantir (PLTR) Is Called Too Expensive by Schwab Guests

Similarly, Essaye said that PLTR should be examined “in a context of reasonable valuation.” Although the shares are down a great deal from their highs, the name is still too expensive to buy, Essaye said. He added that the stock is being pressured by worries over the AI sector and fears about lower spending on contracts by Washington.

“Federal contracts are a large part of the company’s business,” Essaye noted.

Expressing his view of PLTR more bluntly, Essaye said that it “can continue to decline,” adding that it would have to drop a great deal more before he would “become interested” in it.

“It’s a good company, but it’s so richly valued that it can fall quite a bit more before value buyers step in,” he warned.

Also, click here to view the full article featured on Yahoo Finance published on April 1st, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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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.

 

Sevens Report Quarterly Letter Delivered Today

Our Q1 ’25 Quarterly Letter will be released today.

We use our strength (writing about the markets) to help you:

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You can view our Q4 ’24 Quarterly Letter here. To learn more about the product (including price) please click this link.  If you’re interested in subscribing, please email info@sevensreport.com.

 

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.

Hard Landing/Soft Landing Scoreboard

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What’s in Today’s Report:

  • Hard Landing/Soft Landing Scoreboard
  • Composite PMI Flash Takeaways – Another Whiff of Stagflation

Futures are back to flat after trading lower overnight on profit taking as traders digest the latest trade war headlines and subsequent rally off the 2025 stock market lows.

Economically, Germany’s Ifo Survey was mostly upbeat as the headline Business Climate Index firmed to 86.7 vs. (E) 87.0 and Business Expectations jumped to 87.7 vs. (E) 86.8. The solid data is helping support gains in EU markets.

Looking into today’s session, there are several economic reports due to be released starting with a few housing market releases: Case-Shiller Home Price Index (E: 4.5%), the FHFA House Price Index (E: 0.2%), and New Home Sales (E: 679K).

Then after the open, the most important economic report of the day is due out: Consumer Confidence (E: 94.2) and investors will want to see a less-dismal data set in the survey-based release as the February consumer reports weighed heavily on risk assets.

Additionally, there is one Fed speaker: Williams (9:05 a.m. ET) and a few late-season earnings reports from MKC ($0.64 and GME ($0.09), but neither are likely to move markets today.

 

Sevens Report Q1 ’25 Quarterly Letter Coming Next Tuesday

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