The State of Markets: “Global Equities: A Brutal Week – Now What?”
It was a brutal week in equity markets. Most key country equity indices were down between 6 – 10% over the course of the week (see chart). The Italian market (one of the strongest performers over the past 12 months) led the way, closing 10% lower (although it’s still just up for the year, i.e. +2.4% YTD). The NDX100 and US Russell 2000 were also both down around 10% (on the week), while the S&P500 fell by 9%. Conversely, bonds rallied sharply (closing with a 4.01% yield on Friday), while the dollar fell (although bounced on Friday). Bucking the ‘risk off’ trend, Bitcoin (an indication of speculative liquidity) was stable on Thursday and Friday.
Wednesday’s worse than expected tariffs announcement (by Trump after-market hours) was the main trigger. After closing higher on Monday, Tuesday, and Wednesday, the S&P500 index fell by 5% on Thursday and a further 6% on Friday. As a result of that accelerating weakness at the back end of the week, various market participants are discussing the parallels with the October 1987 crash. In the middle of that month, after a difficult Wednesday, Thursday, and Friday (with the market down 3.0%, 2.3% & 5.1%, respectively), the index then fell by 21% on Black Monday (19th October 1987). Whilst anything is possible on Monday, it should be noted that comparisons with 1987, and other similar crash events, usually surface during pullbacks and sharp SELL-offs (in other words, fear engenders more fear). In that respect, all eyes will be on policy makers this weekend. Will they make any announcement (attempt) to calm market nerves?
We updated our latest tactical views on Wednesday last week (with further updates in the Longview on Friday) – see below.
Next week, the main focus will be on price action and policy developments. Elsewhere, in terms of macro, key events include US & Chinese consumer price inflation on Thursday, Chinese total social financing on Friday, along with US Michigan consumer sentiment and the start of the US Q1 quarterly earnings season (in earnest – with various major banks reporting on Friday).
Please see below for a full list of key macro data and events this coming week.
Key chart: Various global equity markets (performance last week, %)
Upcoming important data/events this week:
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Events: |
Fed minutes from March meeting (Wed, 7pm); RBNZ policy decision (Wed, 3am); NY Fed’s Williams gives speech on monetary policy (Fri, 4pm). |
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Monday: |
German industrial production (Feb, 7am). |
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Tuesday: |
US NFIB small business optimism (Mar, 11am). |
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Wednesday: |
N/A |
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Thursday: |
US headline & core CPI (Mar, 1:30pm); Chinese headline CPI & PPI (Mar, 2:30am). |
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Friday: |
US headline & core PPI (Mar, 1:30pm); US Michigan sentiment (April first estimate, 3pm); Chinese total social financing, new yuan loans, and M0, M1 & M2 money supply (Mar, time tentative). |
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Key earnings: |
JPMorgan, Wells Fargo&Co, Morgan Stanley, BlackRock (Fri). |
Key Research
Longview on Friday, 4th April 2025:
“Relief Rally Incoming? PLUS, What Happened to American Exceptionalism?”
Trump’s upfront economic agenda, that is the ‘re-ordering of the global trading system’ (implementation of tariffs), the shrinking of US Government spending, and the deportation of illegal immigrants, is driving investors to question the US exceptionalism narrative.
As we wrote in our Longview on Friday publication, 19th April 2024: “Is America Exceptional?”, that exceptionalism is part true, part fiscal profligacy.
Key North American macro data & events:
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Events: |
Fed minutes from March meeting (Wed, 7pm); speeches by the Fed’s Kughler on inflation dynamics, Barkin at the Economic Club of Washington (Wed, 4pm), Logan gives welcome remarks (Thurs, 2:30pm), Goolsbee at the Economic Club of New York (Thurs, 5pm), Harker on fintech (Thurs, 5:30pm), Musalem on the US economy (Fri, 3pm) & Williams on monetary policy (Fri, 4pm). |
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Monday: |
US consumer credit (Feb, 8pm). |
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Tuesday: |
US NFIB small business optimism (Mar, 11am). |
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Wednesday: |
US wholesale sales & inventories (Feb, 3pm). |
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Thursday: |
US headline & core CPI (Mar, 1:30pm); US weekly jobless claims (1:30pm); Canadian building permits (Feb, 1:30pm); US Federal budget balance (Mar, 7pm). |
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Friday: |
US headline & core PPI (Mar, 1:30pm); US Michigan sentiment (April first estimate, 3pm). |
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Key earnings: |
Progressive (Thurs); JPMorgan, Wells Fargo&Co, Morgan Stanley, BlackRock, Bank of NY Mellon, Fastenal (Fri). |
Fig B: US Michigan sentiment (index)
Key European macro data & events
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Events: |
Speeches by the ECB’s Cipollone in Rome (Mon, 10:45am), Guindos in Madrid (Tues, 10am), Cipollone introductory statement at hearing on the digital euro before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament (Tues, 3pm), Holzmann in Vienna (Tues, 2pm) & Knot & Cipollone in Amsterdam (Wed, 8:35am & 1:30pm), Lagarde at Eurogroup press conference (Fri, 10:45am). |
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Monday: |
German industrial production (Feb, 7am); German imports/exports, & trade balance (Feb, 7am); Eurozone Sentix investor confidence (Apr, 9:30am); Eurozone retail sales (Feb, 10am). |
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Tuesday: |
French exports/imports, & trade balance (Feb, 7:45am). |
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Wednesday: |
N/A |
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Thursday: |
Italian industrial production (Feb, 9am). |
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Friday: |
German headline & core CPI (March final estimate, 7am); Spanish headline & core CPI (March final estimate, 8am); German current account balance (Feb, 8:45am). |
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Key earnings: |
N/A |
Fig C: German industrial production (Y-o-Y %)
Key UK macro data & events
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Events: |
Speeches by the Bank of England’s Lombardelli on a panel (Tues, 5pm) & Breeden at a Market News Internation connect event (Thurs, 2pm). |
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Monday: |
Halifax house price index (Mar, 7am). |
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Tuesday: |
N/A |
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Wednesday: |
N/A |
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Thursday: |
RICS house price balance (Mar, 12:01am). |
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Friday: |
Monthly GDP estimate, industrial & manufacturing production, goods trade balance & construction output (Feb, 7am). |
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Key earnings: |
Tesco (Thurs). |
Fig D: UK RICS house price balance (index)
Key Asia-Pacific macro data & events
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Events: |
RBNZ policy decision (Wed, 3am); speech by the BOJ governor Ueda at the Trust companies conference (Wed); speech by the RBA’s Bullock (Thurs, 11am). |
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Monday: |
N/A |
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Tuesday: |
Australian Westpac consumer confidence (Apr, 1:30am); Australian NAB business confidence (Mar, 2:30am). |
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Wednesday: |
Japanese ESRI consumer confidence (Mar, 6am); Japanese machine tool orders (March first estimate, 7am). |
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Thursday: |
Japanese PPI (Mar, 12:50am); Australian consumer inflation expectations (Apr, 2am); Chinese headline CPI & PPI (Mar, 2:30am). |
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Friday: |
Japanese M2 & M3 money supply (Mar, 12:50am); Chinese total social financing, new yuan loans, and M0, M1 & M2 money supply (Mar, time tentative). |
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Key earnings: |
Seven & I Holdings, Zijin Mining Group (Wed); Fast Retailing (Thurs). |
Fig E: Chinese headline CPI & PPI (Y-o-Y %)
Last 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”
Prior week:
Longview on Friday, 28th March 2025:
“The Shifting Shape of Global Growth”
Quarterly Asset Allocation Update No. 61, 28th March 2025:
“Navigating The Policy Flip: Fiscal to Monetary A.k.a Stay Defensive in Strategic Portfolio”
Valuation Quarterly Asset Allocation Update No. 61, 27th March 2025:
“The US vs. The Rest”
The SHORTVIEW (& market positioning), 25th March 2025:
“Copper (+27% YTD): Tariffs & China”