The State of Markets: “Rising Uncertainty”
This week remained eventful for markets. Yesterday, for example, Powell’s speech was seen as hawkish (with a focus on inflation concerns, as a result of tariffs). With that, he signalled caution on loosening policy, and also ruled out the idea of a ‘Fed put’ for the stock market. That was not well received by markets, with sharp moves lower in key US equity indices (e.g. the NASDAQ100 -3.0%; & Philly SOX: -4.1%). It was also not well received by Trump who said that Powell’s termination “cannot come fast enough”. Uncertainty therefore remains high and, with that, US indices have rolled over this week. European markets, in contrast, have outperformed (see key chart below).
As such, the key question is: Having rallied sharply from recent lows, is the relief rally over? Are US equities entering into another wave of selling? Or is the near term trend still up? We outline our views on those questions in recent research.
Next week’s key US macro data includes the Conference Board Leading Index on Monday, with S&P Manufacturing and Service sector PMIs due Wednesday. Durable goods orders are on Thursday while new and pending home sales data is out on Wednesday & Thursday respectively. Elsewhere the Fed releases the Beige Book (Wednesday), and several Fed presidents are giving speeches (including Waller, Harker, and Goolsbee, amongst others). US markets are closed tomorrow for Good Friday, while most European markets are closed both tomorrow and Monday. Please see below for a full list of next week’s key data and events.
Key chart: Various US/European equity indices (YTD performance, local currency, %).
Upcoming important data/events this week:
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Events: |
China policy decision (Mon, 2am); Fed releases Beige Book (Wed, 7pm). |
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Monday: |
US Conference Board leading index (Mar, 3pm). |
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Tuesday: |
Eurozone consumer confidence (April first estimate, 3pm). |
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Wednesday: |
Manufacturing and service sector PMIs for Australia (12am), Japan (1:30am), France (8:15am), Germany (8:30am), Eurozone (9am), UK (9:30am), & the US (2:45pm). |
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Thursday: |
US durable goods orders (March first estimate, 1:30pm); Japanese machine tool orders (February first estimate, 7am). |
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Friday: |
UK retail sales (Mar, 7am). |
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Key earnings: |
Tesla, GE Aerospace (Tues); Philip Morris, IMB, AT&T, EssilorLuxottica (Wed); Amazon.com, P&G, T-Mobile US, BNP Paribas, Unilever (Thurs); ICBC, Agricultural Bank China (Fri). |
Key Research
Monthly Global Asset Allocation No. 61, 15th April 2025:
“US Treasury SELL-off: What Next?”
Treasury yields backed up sharply last week. The key question is: Why? Is this the start of a sustained move higher? And will it result in stress in funding markets and other parts of the financial system? Lots of answers are doing the rounds, with no clear consensus.
In reality, most of those answers have some merit. For choice, though, points 1 & 2 are most compelling. That is, the recent move higher in yields is primarily positioning related (and also largely complete/in the rear view mirror).
Key North American macro data & events:
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Events: |
Fed releases Beige Book (Wed, 7pm); speeches by the Fed’s Jefferson & Harker at the Economic Mobility Summit (Tues, 2 & 2:30pm), Goolsbee at the Philadelphia Fed’s economic mobility summit (Wed, 2pm) Waller on key opportunities and challenges shaping the economy (Wed, 2:30pm) & Hammack on the balance sheet (Wed, 11:30pm). |
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Monday: |
US Conference Board leading index (Mar, 3pm). |
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Tuesday: |
US Philadelphia Fed service sector activity (Apr, 1:30pm); US Richmond Fed manufacturing index (Apr, 3pm). |
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Wednesday: |
US S&P manufacturing & service sector PMIs (April first estimates, 2:45pm); US new home sales (Feb, 3pm). |
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Thursday: |
US Chicago Fed national activity (Mar, 1:30pm); US durable goods orders (March first estimate, 1:30pm); Canadian employment change (Feb, 1:30pm); US weekly jobless claims (12:30pm); US pending home sales (Mar, 3pm); US Kansas City Fed manufacturing sector activity (Apr, 4pm). |
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Friday: |
Canadian retail sales (Jan, 12:30pm); US Michigan Sentiment (April final estimate, 3pm); US Kansas City Fed service sector activity (Apr, 4pm). |
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Key earnings: |
Tesla, GE Aerospace, Verizon, Rtx Corp, Intuitive Surgical, Danaher, Chubb, Lockheed Martin, Elevance Health, Northrop Grumman, Moody’s, 3M, Capital One Finance (Tues); Philip Morris, IMB, AT&T, ServiceNow Inc, Thermo Fisher Scientific, Boston Scientific, NextEra Energy, Texas Instruments, Boeing, CME Group (Wed); Amazon.com, P&G, T-Mobile US, Merck&C0, PepsiCo, American Express, Caterpillar, Gilead, Union Pacific, Comcast, Fiserv, Bristol-Myres Squibb, Intel, Republic Services (Thurs): AbbVie, HCA, Aon, Colgate-palmolive (Fri). |
Fig B: US Conference Board leading index (Y-o-Y %)
Key European macro data & events
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Events: |
Speeches by the ECB’s Ceteno & Krugman at a conference in Lisbon (Mon, 3pm), Knot at PIIE in Washington (Wed, 11am), Villeroy at Atlantic Council in DC (Wed, 7pm), Lane at IIF in Washington (Wed, 8:15pm) & Lane in DC (Thurs, 2pm); market holiday in various countries on account of Easter Monday (Mon). |
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Monday: |
N/A |
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Tuesday: |
Eurozone government debt to GDP ratio (2024 first estimate); Eurozone consumer confidence (April first estimate, 3pm). |
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Wednesday: |
HCOB manufacturing & service sector PMIs for France (8:15am), Germany (8:30am) & Eurozone (9am) – all April first estimates; Eurozone construction output (Feb, 10am); Eurozone trade balance (Feb, 10am). |
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Thursday: |
Eurozone new car sales (Mar, 5am); French INSEE consumer confidence (Apr, 7:45am); Spanish mortgage approvals (Feb, 8am); Spanish PPI (Mar, 8am); German IFO business climate (Apr, 9am). |
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Friday: |
French INSEE business & manufacturing confidence (Apr, 7:45am). |
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Key earnings: |
EssilorLuxottica, Danone (Wed); Sanofi, Air Liquide, Rex, BNP Paribas, Vinci, Thales (Thurs); Safran (Fri). |
Fig C: Eurozone consumer confidence (index)
Key UK macro data & events
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Events: |
Speeches by the Bank of England’s Pill at the University of Leeds (Wed, 11:30am), Bailey in Washington (Wed, 6:15am), Breeden in Washington (Wed, 7pm), Lombardelli at Peterson Institute for International Economics (Thurs, 2:25pm) & Greene on ‘Inflation, growth, and monetary policy’ (Fri, 8:15pm); market holiday on account of Easter Monday (Mon). |
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Monday: |
N/A |
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Tuesday: |
N/A |
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Wednesday: |
Public sector finances (Mar, 7am); S&P manufacturing & service sector PMIs (April first estimates, 9:30am). |
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Thursday: |
CBI industrial trends survey (Apr, 11am). |
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Friday: |
Gfk consumer confidence (Apr, 12:01am); Retail sales (Mar, 7am). |
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Key earnings: |
Unilever (Thurs). |
Fig D: UK S&P manufacturing & service sector PMIs
Key Asia-Pacific macro data & events
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Events: |
China policy decision (Mon, 2am); market holidays in Australia and New Zealand on account of Easter & ANZAC Day (Mon & Fri). |
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Monday: |
N/A |
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Tuesday: |
N/A |
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Wednesday: |
Australian S&P manufacturing & services sector PMIs (April first estimates, 12am); Japanese Jibun Bank manufacturing & services sector PMIs (April first estimate, 1:30am); Japanese Tertiary industry index (Feb, 5:30am). |
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Thursday: |
Japanese PPI services (Mar, 12:50am); Japanese machine tool orders (February first estimate, 7am). |
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Friday: |
Japanese headline & core CPI (Apr, 12:30am). |
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Key earnings: |
Kweichow Moutai, Shin-Etsu Chemical, Canon, China Petrol A (Wed); Chugai Pharmaceutical, China Life Insurance, China Yangtze Power, China Citic Bank, Daiichi Sankyo, Fujitsu (Thurs); ICBC, Agricultural Bank China, China Construction, PetroChina, Ping An Insurance, China Shenhua Energy, Industrial Bank, Hitachi, Mitsubishi Electric, NEC Corp (Fri). |
Fig E: Japanese Jibun Bank manufacturing & services sector PMIs
Last week:
Longview on Thursday, 17th April 2025:
“Is Inflation ‘Transitory’?”
Monthly Global Asset Allocation No. 61 15th April 2025:
“US Treasury SELL-off: What Next?”
Prior 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:
“Price Action Post a Crash”