Of Jamie McGEVer
Orlando, Florida (Reuters) – Negotiation Day
Give meaning to the forces that drive global markets
Of Jamie McGEVer, markets columnist
Switch up, move too fast
A relatively quiet day on Monday with some locked key markets saw that Asian and European actions expanded their recent rebound, but Wall Street stumbles after the last Tariff Salvary of the President of the United States, Donald Trump, despite more underlying signs in the United States economy.
U.S. stocks have strongly rejected the liberation liberation a month ago. But is this general positivity justified? More information on this, but first, a launch of the main market is moving.
I would like to know, so please please contact the comments at jamie.mcgever@thomsonreuters.com. You can also follow me at @reutersjamie and @retersjamie.bsky.social.
If you have more time to read, here are some articles that I recommend to help you make sense of what happened in the markets today.
1. The President of Taiwan calls on the end of “fake” news about the conversations of USForex 2. Japan says there is no plan to threaten the sale of treasury at Ustrade Talks 3. Deep cuts or none? There is a Golf in Fed opinions: Mike Dollan 4. Fed policy makers hoped to keep the Astariffs Roil Outlook constant rates 5
The key movements of today’s market
* Taiwan’s dollar meets another 3% up to a maximum of three years for 30.00 per US dollar. Its 6% gain since Friday is a passage. Pass agreement. * Japan’s yen is the largest movement in the G10 FX space, increasing around 0.5% to 144.00 per dollar. * United States Treasury Records increase through the table, up to 5 BPS AS in the final final, carry the curve. * Oil Falls Again – Brent Cru and WTI Futures Slide Tofsh 4 Years of Closing of $ 60.32/BBL and $ 57.13 respectively. * Gold comes from the lower recent drift, increasing 2.4% to $ 3,320/Oz. * Wall Street ends lower, with the DOW by lowering 0.2%, NASDAQDown 0.7%, and S&P 500 reaching its maximum winner 2004 Streaksinge to close 0.6%lower. * Actions in Berkshire Hathaway fall almost 5% after 94 years, CEO, Warren Buffett, announces that he is going down. * The Stoxx 600 European Index increases for a dozen consecution, its longest victory since August 2021. * The Dax of Germany climbs 1.3% – its ninth consecutive gain – Towithin touching the record distance of 23,476 points in March.
Fare uncertainty is still deep
World markets are in Limbo, with investors waiting for specific progress in the Washington Bilateral Agreement with dozens of countries, but worries that the rally in risk assets last month could lose impulse.
Sunday’s Trump’s decision to make a 100% slap on the films made abroad incorporated in the United States was a sign that perhaps did not become as conciliatory as investors had expected. Or it may be a memory of how erratic is still his agenda of fare policies.
In any case, it was enough to help on Monday on Monday nine days of Wall Street, in contrast to the key markets in Asia and Europe that kept their longer winning stripes for years. Will they run out of puff on Tuesday?
It could be a low bar, but there were two new features over the weekend, which could help investors to maintain a half -filled glass view of the markets: Trump pledged not to set fire to Fed Fed President Jerome Powell, and Japan finance minister Katsunobu Kato, said that Japan has no expected to sell 1 trilion trilions of three trilions. commercial with Washington.
And the secretary of the Treasury, Scott Bessent, on Monday repeated that the rates, along with the administration’s tax cuts and the deregulation agenda, will promote growth up to 3% this time next year.
North -American economic data are mainly achieved on the stronger side of expectations, giving the Fed more breathing space, although it remains to see how long it takes.
Some Asian coins are achieving the biggest gains for years, and on Monday, the Ford car giant obtained annual guidance. The fare uncertainty continues to function.
Wall Street’s “fever dream” could end cold sweat
The recent Wall Street rebound of its April lows suggests that capital investors have a benign price for the United States economy, which clearly contrast with the worst signals from oil, gold and fixed income markets. Is this justified confidence or dangerous complacency?
If you had deactivated all the communications on April 2 and re -login, you will find the S&P 500 inalted, without any sign of the 15% fall that suffered on the days immediately after the announcement of Rates on April 2 of President Donald Trump.
The S&P 500 has increased nine days in a row until May 2, its best daily victory in 21 years. In the meantime, the “S&P 493” – the wide index that excludes the “magnificent seven” technological megacaps – is flat for the year so far, since the tumult for the last four months.
Contrast -with other markets.
Oil was on Friday the lowest end in four years and dropped 25% year after year. Although this partially reflects the calls to the OPEC+output ascents, the macroeconomic signals that flash are quite clear: weak demand, slow growth and deflation.
Gold, meanwhile, increased by 25% this year and still above its “liberation day” closes, although it was reduced from the recent $ 3,500 record. Although this is not an indication of the augmented fear of disinflation, it is a high -scale sign in general. The attractiveness of Bullion as the main asset of Safe-Haven in the world has rarely been stronger.
And what about the treasures? The two -year performance has rejected in recent days, but it is still 40 lower basic points this year, and the rates traders still provide for at least three federal reserve cuts this year. Both have an important price for financial slowing.
Cold sweat
This is simply an example of the old adage that capital investors are paid to be optimistic, while bond investors pay to be pessimistic?
Maybe, but there is some justification for Wall Street’s optimism. It is largely rooted that the economic damage caused by the rates will not be as bad as it feared a few weeks ago, partly because the Trump administration has been reduced to the face of the market’s ruse. In other words, the “Trump Put” has returned.
Investors also have reason not to be too concerned about GDP contraction of 0.3% in the first quarter, as it largely reflects the frontal load of imports, a statistical anomaly that will be reversed rapidly.
It was a “gross distorted product”, according to the economists of Goldman Sachs, who provide for an expansion of the GDP of 2.4% in the second quarter.
In addition, while “gentle” economic data, such as the indicators of consumer sentiment, continue to blink in red, much of the “hard” data, such as the employment figures, remain well.
And even if the actual growth this year is only 0.5%, the estimation of Goldman, which is at the lower end of the forecasts, still involves nominal growth of about 5%, if inflation exceeds 4%, as many economists expect.
It is important to note that the results are based on nominal growth rates. Although the results of the first quarter are obviously the numbers of “posterior mirror” in the context of the trade war, about 74% of the 357 S&P 500 companies that have reported so far have defeated the estimates of the analysts, according to Tajinder Dhillon de LSEG. This is compared to a long -term average of 67.0%.
And the growth expectations of 12 months for the S&P 500 continue to operate with 10%poignant.
But it is not the whole story. Many companies have reduced their forecasts or refused to give any guidance.
Although Trump seems very likely to mark his number of initial rates, the cost of doing international business will still increase significantly. Whether this cost is more borne by companies or consumers, it is left to see, but in the broadest context of economic activity and corporate profitability, the effect will be the same.
The rates have not yet bitten, but they will. In an interview with Bloomberg TV on Friday, Gene Seroka, executive director of the port of Los Angeles, the largest in the country, did not punch: “The CEOs told me,” hit the pause button. “Help, out of the table.
Bob Elliott, CEO of Unlimited Funds, believes that actions are priced as if last month was a “fever dream”. The risk is that investors occur in cold sweat in the coming months.
What could the markets move tomorrow?
* Non-official box services of China PMI (April) * Price inflation of the euro area producer (March) * Trump to meet with the Canadian Prime Minister Mark Carney at the House House * U.S. Treasury 10 Years Auction * United States Commerce (March)
The opinions expressed are those of the author. They do not reflect the opinions of Reuters’ news, which, according to the principles of trust, are committed to the integrity, independence and freedom of bias.
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(By Jamie McGEVer, edition of Nia Williams)
