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Morning Brew April 4 2025
Summary: That went pear shaped quickly
Good morning,
Markets are trying to make sense of the tariffs announced by Donald Trump
He simply put caused the strongest market decline in half a decade by announcing the highest tariffs in a century… HE sparked recession fears across the globe.
The S&P 500 lost 275 points, or 4.85%, to 5,395 points, the Nasdaq lost 1,054 points, or 6%, to 16,547. The Dow Jones fell 1,682 points, or 4%, to 40,543 The broad Russel 2000 shed Russel -6.5% The Nikkei is set for a weekly loss of 0%
Companies with a large import quote from Asia such as Nike(-13.7%), Lululemon (-9.7%) On (-16.5%) or Apple (-9.1%) took a heavy beating.. Adidas lost 11% and Maersk 9.5% Banks also lost on recession fears
The USD most massively, EURUSD rose to 1.1080, GBPUSD 1.31 and USDJPY 145.40.
Oil is down 4.4% this week alone, Gold is stable at 3100 and Silver drastically lower at 31.50.
Where do we go from here?
So far Canada has announced retaliation measures while the rest of the world seems to be considering how to react. The tariffs were higher than expected by far and the calculation is odd to say the least.
The disruption to the economy and markets is so strong that there is speculation the real goal of the exercise is to force the Fed to cut rates and bring down the financing cost of the US.
Regardless, today and the next few days will be driven by trade policies, deals, exceptions or the hopes thereof, retaliatory measures by China, the EU and Japan will be closely watched
Reactions out of the US will be interesting when people realize how expensive things are becoming. An Iphone will become more than 40% more expensive if the tariffs are passed on to consumers.
The Nonfarm payroll will not get too much attention I believe, it will only show from where we head into the US recession, not how deep it will be.
Markets on tilt after Trump's Liberation Day tariff blitz. https://www.home.saxo/content/articles/podcast/podcast-3-april-03042025
Tariff-related recession fears ignite widespread commodities selloff
Trumps Liberation Day tariff blitz sets world on edge
https://www.home.saxo/content/articles/equities/trumps-tariff-tsunami-03042025
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Friday, April 4, 2025
- Germany Industrial Production (February): A measure of industrial activity in Europe’s largest economy (08:00 AM CET).
- US Non-Farm Payrolls & Unemployment Rate (March): The most closely watched labour market report globally (08:30 AM ET).
- Tiff Macklem (BoC Governor): Discussing trade dynamics and monetary policy implications in Toronto.