
Weaker consumer confidence dampens a good week for stocks
Good news on many fronts helped buoy stock markets and lessen inflation risks even if consumers aren't feeling positive.
The greatest US vulnerability in the midst of the tariff war is likely its relatively high level of debt and foreign ownership of it.
There are headwinds facing the European economy from tariff wars, but fiscal stimulus is a powerful countervailing force.
As US earnings season begins, forward guidance is likely to matter more to markets than actual first-quarter earnings.
Last week brought us another chapter in the tariff wars as the US announced a 90-day pause on the implementation of the “Liberation Day” reciprocal tariffs against all countries except China. On Friday night, the US announced exemptions (for electronics and phones) to its tariff policy on China, although officials seemed to walk that back somewhat over the weekend. Not surprisingly, stocks and Treasuries experienced wild swings over the course of the week in response to tariff war developments while gold continued to climb higher.1
Investors are worried about a variety of things, most notably recession — and with good reason. It seems that volatility and uncertainty may be the only certainties going forward. We’ve gotten numerous questions from clients about what we should be watching for now. Here’s a short list of what to watch for in coming weeks:
It seems that fewer countries are trusting the US — and therefore US Treasuries as a “safe haven” asset class. This has resulted in greater buying of gold, which seems to have become the preferred “safe haven” asset class of choice.
Other countries may also want to find ways to use the US’s debt vulnerability as a weapon in the tariff fight, punishing the US for its tariffs by selling US Treasuries and driving up borrowing costs. Some have whispered that the spike in Treasury yields was responsible for the US placing its 90-day pause on Liberation Day tariffs assessed against a number of countries. We’ll want to follow US Treasury yields as that may very well help dictate the course of tariff wars going forward. Recall US Treasury Secretary Scott Bessent’s goal of driving down the 10-year US Treasury yield, which has been thwarted in recent days.
Looking ahead, it’s important for clients to recall their investing time horizon, which is typically far longer than an average recession or a presidential term. That can mean maintaining one’s investment policy, remaining well diversified, and even looking for opportunities to take advantage of the uncertainty and volatility.
Date |
Report |
What it tells us |
---|---|---|
April 14 |
New York Fed US Consumer Inflation Expectations |
Tracks consumer expectations for US inflation. |
April 15 |
UK unemployment rate |
Indicates the health of the job market. |
|
Eurozone industrial production |
Indicates the economic health of the industrial sector. |
|
Eurozone ZEW Economic Sentiment |
Measures economic sentiment in the eurozone for the next six months. |
|
NY Empire State Manufacturing Index |
Rates the relative level of general business conditions in New York state. |
|
Canada Consumer Price Index (CPI) |
Tracks the path of inflation. |
|
China Gross Domestic Product (GDP) |
Measures a region’s economic activity. |
|
China industrial production |
Indicates the economic health of the industrial sector. |
|
China unemployment rate |
Indicates the health of the job market. |
April 16 |
UK Consumer Price Index (CPI) |
Tracks the path of inflation. |
|
Eurozone Consumer Price Index (CPI) |
Tracks the path of inflation. |
|
US retail sales |
Indicates the health of the retail sector. |
|
US industrial production |
Indicates the economic health of the industrial sector. |
|
Bank of Canada Monetary Policy Decision |
Reveals the latest decision on the path of interest rates. |
|
Bank of Korea Monetary Policy Decision |
Reveals the latest decision on the path of interest rates. |
|
Australia unemployment rate |
Indicates the health of the job market. |
April 17 |
Bank of England Credit Conditions Survey |
Reports on trends and developments in credit conditions. |
|
European Central Bank Monetary Policy Decision |
Reveals the latest decision on the path of interest rates. |
Good news on many fronts helped buoy stock markets and lessen inflation risks even if consumers aren't feeling positive.
A China-US tariff de-escalation, the Federal Reserve stays in wait-and-see mode, and the Bank of England strikes a hawkish tone while cutting rates.
In our monthly market roundup for April, Invesco experts give a rundown of a mixed month for global equity markets, as well as an update on fixed income markets.
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