A new world order has emerged in the three weeks since President Trump on Apr. 2 announced “Liberation Day” and rolled out US tariffs. From an investing perspective it’s safe to say it’s been a shock heard around the world, and markets are furiously repricing a new set of risk factors for a radically different outlook for economic activity, financial assets, trade policy, and assumptions about safe havens.
Macro Briefing: 22 April 2025
Gold surged to another record high in Monday’s trading, closing near $3,432 an ounce, and in early trading today it reached $3,500. “As tariff tensions continue to move at a fevered pitch, we continue to see gold prices move to the upside as a safe haven response,” said David Meger, director of metals trading at High Ridge Futures.
Markets Face Another Week Of Extreme Policy Uncertainty
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.
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.