Indices
- Dow41,583,-402,or -0.96%.
- Nasdaq17,322,-462or -2.60%.
- S&P 5,580,-87or -1.54%.
- MSCI EAFE 2451.37, -33.61or -1.35%.
- USD10Y4.255%, +0.3bp or +0.71%.
- WTI Crude$69.04/bbl, +$0.76 or +1.11%.
More Tariffs, Stagflation Looms
Stagflation is looking more and more likely as the administration does its best to destroy what had been a very healthy U.S. economy. Last week both the Consumer Sentiment and Consumer Confidence surveys were down sharply. On Friday, the Atlanta GDP Nowcast published a -2.8% GDP estimate. The same day, the February Personal Consumption Expenditure showed no change in headline inflation but importantly showed an increase in Core inflation. Finally, consumer 1-year and 5-year inflation expectations spiked to +5% and +4.1% respectively.
In response, on Thursday, the administration announced 25% tariffs on all autos made outside of the United States and there are more tariff announcements forthcoming on April 2. As a reminder, prior to this administration, every credible economist had viewed tariffs as anti-growth and a tax on the consumer. While some of those economist opinions have changed, the economic effects of tariffs remain the same.
The UpcomingWeek:Mar 31– Apr4
It's a busy economic data week with final March manufacturing and services data, February JOLTS, and Friday’s Non-Farm Payrolls, Unemployment Report, and Average Hourly Wages.
All is quiet on the earnings front apart from RH (formerly known as Restoration Hardware). Q1 earnings season should commencethe second week of April.
Economic Calendar
- Monday – N/A. Earnings: N/A.
- Tuesday – March Final S&P Manufacturing PMI, March ISM Manufacturing Survey, February JOLTS. Earnings: N/A.
- Wednesday– March ADP Private Payrolls. Earnings:RH (RH).
- Thursday – Initial Jobless Claims.March Final S&P Services PMI, March ISM Services. Earnings: N/A.
- Friday– March Non-Farm Payrolls, Unemployment Report, Average Hourly Wages. Earnings: N/A.
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