The State of Markets: “Equities - Major Lows In?”
US equities made a major low last week. In particular, S&P500 futures reached 4,830 in Monday’s trading session. That level is 22% below the highs from early February and is the bottom of the long term uptrend that’s been in place since the 2020 pandemic lows (see key chart below). Trump then paused tariffs on Wednesday (for 90 days), which generated historically large one-day rallies in key indices (e.g. the Philly SOX, which closed up 18.7% on the day).
The key question, therefore, is: Will equities hold onto their gains? Is a relief rally underway, and likely to be sustained? OR will Monday’s lows be tested (or even broken) in the near term? And will signs of stress in the bond market continue to build? We outline our views on those questions in recent research (e.g. see recent ‘Daily Risk Appetite’ publications, as well as Tuesday’s ‘Tactical Equity Asset Allocation’ Update).
Next week’s US macro data has a strong housing theme, with updates on the NAHB homebuilders’ index on Wednesday, followed by housing starts and building permits on Thursday. Retail sales data for March is due on Wednesday and there are several Fed presidents giving speeches (including Powell, also on Wednesday). In Europe, the UK CPI inflation report for March is due on Wednesday and the ECB policy decision is on Thursday. Earnings season continues in the US this coming week with more banks reporting on Monday (including Goldman Sachs, Bank of America, and Citigroup). Please see below for a full list of upcoming data and events.
Key chart: S&P500 futures candlestick shown with its 50 day moving average
Upcoming important data/events this week:
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Events: |
Bank of Canada policy decision (Wed, 2:45pm); ECB policy decision (Thurs, 1:15pm); speech by the Fed’s Powell to the economic club of Chicago (Wed, 6:15pm); market holiday in major worldwide countries (e.g. US, Canada, Germany, UK etc.) on account of Good Friday (Fri). |
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Monday: |
N/A |
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Tuesday: |
UK employment, jobless claims & average weekly earnings (Mar/Feb, 7am). |
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Wednesday: |
Chinese GDP (Q1, 3am); UK headline & core CPI, RPI & PPI (Mar, 7am); US retail sales (Mar, 1:30pm); US NAHB homebuilders index (Apr, 3pm). |
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Thursday: |
US housing starts & building permits (Mar, 12:30pm). |
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Friday: |
Japanese headline & core CPI (Mar, 12:30am). |
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Key earnings: |
Goldman Sachs (Mon); J&J, Bank of America, Citigroup (Tues); ASML Holding (Wed); UnitedHealth, Blackstone, Hermes International, L’Oreal (Thurs). |
Key Research
Longview ‘Tactical’ Alert No. 90, 8th April 2025:
“Start Re-BUILDing OW in Tactical Portfolio”
Having moved NEUTRAL equities in early February, we recommend starting to re-BUILD the OW position.
The rationale is fivefold and includes (i) the BUY/strong BUY message from our medium term models; (ii) signs of panic (and capitulation) in markets; (iii) bearish positioning; (iv) the proximity of key support levels; and (v) the shift in the balance of ‘trade war risks’...
Key North American macro data & events:
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Events: |
Bank of Canada policy decision (Wed, 2:45pm); speeches by the Fed’s Harker on the role of the Fed (Mon, 11pm), Bostic in a fireside chat on policy (Tues, 12:40am), Hammack in a moderated Q&A (Wed, 5pm), Powell to the economic club of Chicago (Wed, 6:15pm), Schmid & Logan on banking (Thurs, 12am) & Daly in a moderated conversation (Fri, 4pm); market holiday in the US & Canada on account of Good Friday (Fri). |
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Monday: |
US New York Fed 1 year inflation expectations (Mar, 4pm). |
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Tuesday: |
Canadian housing starts (Mar, 1:15pm); Canadian manufacturing & wholesale sales (Feb, 1:30pm); US Empire manufacturing (Mar, 1:30pm); Canadian core CPI (Mar, 1:30pm); US imports and exports price index (Mar, 1:30pm); Canadian existing home sales (Mar, 2pm). |
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Wednesday: |
US retail sales (Mar, 1:30pm); US New York Fed service sector business activity (Apr, 1:30pm); US industrial & manufacturing production & capacity utilisation (Mar, 2:15pm); US NAHB homebuilders index (Apr, 3pm); US business inventories (Feb, 3pm); US total TIC flows (Feb, 8pm). |
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Thursday: |
US housing starts & building permits (Mar, 12:30pm); US Philadelphia Fed business outlook (Apr, 1:30pm); US weekly jobless claims (1:30pm). |
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Friday: |
N/A |
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Key earnings: |
Goldman Sachs (Mon); J&J, Bank of America, Citigroup, PNC Financial (Tues); Abbott Labs, Progressive, Prologis, U.S. Bancorp, Kinder Morgan, Travelers, CSX (Wed); UnitedHealth, Blackstone, Charles Schwab, Marsh McLennan, Truist Financial Corp (Thurs); HCA (Fri). |
Fig B: US NAHB homebuilders index
Key European macro data & events
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Events: |
ECB policy decision (Thurs, 1:15pm) followed by Lagarde press conference (1:45pm); ECB releases bank lending survey (Tues, 9am); market holiday in most major European countries on account of Good Friday (Fri). |
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Monday: |
N/A |
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Tuesday: |
French headline & core CPI (March final estimate, 7:45am); German & Eurozone ZEW survey – expectations & current situation (Apr, 10am); Eurozone industrial production (Feb, 10am). |
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Wednesday: |
ECB current account (Feb, 9am); Italian headline CPI (March final estimate, 9am); Italian current account balance (Feb, 9:30am); EZ headline & core CPI (March final estimate, 10am). |
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Thursday: |
German PPI (Mar, 7am). |
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Friday: |
French retail sales (Mar). |
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Key earnings: |
Louis Vuitton (Tues); ASML Holding, Heineken (Wed); Hermes International, L’Oreal (Thurs). |
Fig C: Eurozone industrial production (Y-o-Y %)
Key UK macro data & events
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Events: |
Market holiday on account of Good Friday (Fri). |
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Monday: |
Rightmove house prices (Apr, 12:01am). |
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Tuesday: |
BRC retail sales (Mar, 12:01am); employment, jobless claims & average weekly earnings (Mar/Feb, 7am). |
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Wednesday: |
Headline & core CPI, RPI & PPI (Mar, 7am); Land Registry house price index (Feb, 9:30am). |
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Thursday: |
N/A |
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Friday: |
N/A |
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Key earnings: |
Rio Tinto PLC (Tues). |
Fig D: UK headline & core CPI (Y-o-Y %)
Key Asia-Pacific macro data & events
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Events: |
RBNZ chief economist speaks about forecasting (Mon, 10:30pm); RBA releases minutes of April policy meeting (Tues, 2:30am); BOJ’s Nakagawa speaks in Gunma (Thurs, 2:30am). |
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Monday: |
Chinese imports/exports, & trade balance (Mar, 3am); Japanese industrial production & capacity utilisation (February final estimate, 5:30am). |
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Tuesday: |
N/A |
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Wednesday: |
Japanese machinery orders (Feb, 12:50am); Australian Westpac leading index (mar, 1:30am); Chinese new & used home prices (Mar, 2:30am); Chinese activity data (industrial production, retail sales, fixed asset, property investment & unemployment rate – Mar, 3am); Chinese GDP (Q1, 3am). |
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Thursday: |
Japanese imports/exports, & trade balance (Mar, 12:50am); Australian employment data (Mar, 2:30am). |
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Friday: |
Japanese headline & core CPI (Mar, 12:30am). |
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Key earnings: |
BHP Group LTD (Wed). |
Fig E: Chinese real GDP growth (Q-o-Q %)
Last week:
Longview on Friday, 11th April 2025:
“Is US Recession Risk As High As It Seems?”
Monthly Global Asset Allocation No. 60, 11th April 2025:
“OIL: BUY Case (still) BUILDing”
Longview ‘Tactical’ Alert No. 90, 8th April 2025:
“Start Re-BUILDing OW in Tactical Portfolio”
Longview ‘Tactical’ Alert No. 89, 7th April 2025:
Prior week:
Longview on Friday, 4th April 2025:
“Relief Rally Incoming? PLUS, What Happened to American Exceptionalism?”
Global Macro Report, 3rd April 2025:
“Trump’s Tariffs –> Back to the 1800s! a.k.a. A Few Quick Thoughts (& Charts)”
Quant Monthly Appendix, 2nd April 2025:
“Part II: Country Valuation Overview”
Tactical Equity Asset Allocation No. 255, 2nd April 2025:
“'SELL Any Rallies' a.k.a. ‘Pullback’ and ‘Mid Cycle Slowdown’ Underway”
Quant Monthly Appendix, 1st April 2025:
“Part I: S&P500 Sector Valuation Overview”