Financial markets are always pricing in uncertainty and risk, but the task has become dramatically more challenging in recent weeks after the US upended its longstanding trade policy. A repeat performance sentiment-roiling activity appears in store for the days ahead as investors wrestle with a series high-stake unknowns.
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Macro Briefing: 21 April 2025
China warns countries it will retaliate if governments engage in agreements with the US that threaten Beijing’s interests. “Appeasement cannot bring peace, and compromise cannot earn one respect,” a Chinese Commerce Ministry spokesperson said. “China firmly opposes any party reaching a deal at the expense of China’s interests. If this happens, China will never accept it and will resolutely take countermeasures.” On Friday, China’s Shanghia Stock Exchange Composite Index closed at a roughly middling level relative to recent history.
Will Tariff-Related Inflation Derail The Bond Market’s Rally?
Rising US bond prices have offset the slide in US equities so far this year, but the outlook for fixed income may be more precarious than the current rear-window perspective suggests.
Macro Briefing: 17 April 2025
Federal Reserve Chairman Powell outlined a plan on Wednesday for a scenario of higher inflation and slower growth. “The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he said at the Economic Club of Chicago. “For the time being, we are well positioned to wait for greater clarity” regarding policy changes linked to immigration, taxation, regulation, and tariffs, he noted. The policy-sensitive US 2-year Treasury yield eased yesterday, closing near the low of recent months and signaling that the market is still expecting rate cuts at some point in the near term.
Low-Volatility Strategy Is 2025’s Upside Outlier For Equity Factors
Standing alone among US equity factors this year, the low-volatility strategy is holding on to a modest gain year to date. In sharp relief, the rest of the factor field is posting varying degrees of loss, based on a set of ETFs through yesterday’s close (Apr. 15).
Macro Briefing: 16 April 2025
The New York Fed Manufacturing Index continued to reflect contracting business conditions in April. Although the Empire State Manufacturing Survey general business conditions index rebounded in this month, it remained below zero at -8.1, which indicates contraction in the sector.
Defensive Sectors Are A Lifeboat For US Equity Investors In 2025
US stocks have taken a hit this year, but the pain – as usual – varies widely by sector. The spread between the best and the worst performing sectors year to date has widened sharply to more than 19 percentage points, based on a set of ETFs through Monday’s close (Apr. 14).
Is The Market Pricing In A Higher Risk Premium For US Treasuries?
One week of trading doesn’t change decades of precedent for the world’s primary “safe” asset, but reports that the global marketplace is rethinking risk for US government bonds is deeply unsettling for several reasons.
Macro Briefing: 14 April 2025
The US Treasury market will be closely watched this week as investors consider if the risk premium for the world’s “safe asset” is in the process of resetting high. A possible warning sign: the 10-year yield rose sharply last week despite growing concerns that US economic growth is slowing. The flight-to-safety trade, which usually benefits Treasuries and the US dollar, was conspicously absent in recent days. “The market is re-assessing the structural attractiveness of the dollar as the world’s global reserve currency and is undergoing a process of rapid de-dollarization. Nowhere is this more evident than the continued and combined collapse in the currency and US bond market as this week comes to a close,” Deutsche Bank strategist George Saravelos wrote in a note to clients Friday.
Book Bits: 12 April 2025
● The Thinking Machine: Jensen Huang, Nvidia, and the World’s Most Coveted Microchip
Stephen Witt
Review via The Economist
Jensen Huang co-founded Nvidia in 1993 and has run it since, making him one of Silicon Valley’s longest-serving CEOs. He is among the most approachable—happy to entertain journalists when other tech bosses skulk behind a PR firewall—and, with his signature black leather jacket, among the most recognisable. Yet he remains an elusive subject. Nvidia’s $73bn in net profit last year, not far behind Microsoft’s $88bn, points to a strategic genius at work. His rambling disquisitions on earnings calls scream dumb luck. Which is it?
A new book suggests the answer is both. “The Thinking Machine” by Stephen Witt, a journalist, is the second such corporate biography; “The Nvidia Way” by Tae Kim, a former equity analyst, was published in December and covers similar ground. But Mr Witt approaches his subject with a more critical eye and more verve. He weaves together the story of the man, his company and the computer science that led to large language models (llms) such as ChatGPT, which brought “generative” AI to the masses in 2022.