Indices
Dow 40,212, +1,898, or+4.95%.
Nasdaq 16,724, +1,137or+7.30%.
S&P 5,363, +289or+5.67%.
MSCI EAFE 2297.70, +16.5or+0.72%.
USD10Y 4.493%, +50.8bpor +12.9%.
WTI Crude $61.48/bbl, -$0.84or -1.35%.
Tariff Chaos Equals Volatility and Uncertainty
After shedding nearly another 2% the first two trading days following the weekend, the administration flip-flopped and announced a 90-day pause on their inane tariff policy with several exceptions. The baseline 10% that applies to nearly all of the U.S.’s trading partners would stay in effect. China’s tariffs which have climbed to a whopping 145% will continue as will 25% levies on imports of aluminum and autos from Mexico and Canada not explicitly covered by the Trump negotiated USMAC agreement of 2020. Markets rallied strongly on Wednesday, fell sharply again on Thursday, and rallied somewhat on Friday. On Friday, after the market closed, the administration flip flopped yet again and exempted smartphones, computers, semiconductors and other electronics from the Liberation Day policy. On Sunday, the President and the Commerce Secretary appeared to deliver different messages with the former seemingly suggesting that the exemption for electronics would be temporary while the latter suggested that electronics would be subject to a different electronics tariff.
Corporate Fallout
Delta Airlines (DAL), which reported a strong quarter, refused to confirm 2025 guidance, and their CEO expressed concern that the economy is likely to fall into a recession. Alcohol distributor Constellation Brands (CEG) also reported a strong quarter but slashed fiscal 2026 projections citing uncertainty regarding tariff policy. Walmart (WMT) pulled its first quarter operating income guidance citing the uncertainty surrounding tariffs but reaffirmed its full year 2025 guidance at least for now. And on Friday, all three CEOs from JPMorgan Chase (JPM), Blackrock (BLK), and Wells Fargo (WFC) cited the uncertainty caused by the tariff announcements.
Economic Data
The economic data this week was mixed. While the inflation data from the Consumer and Producer Price Indices was better than expected, the results were quickly discounted by the markets given the effects of the tariff announcements have yet to be felt. On the flip side, preliminary April Consumer Sentiment was the second worst reading since 1952 and one and five-year inflation expectations soared.
The Upcoming Week: Apr 14 – Apr 18
Economic data is light with only U.S. Retail Sales to peruse on Wednesday. Week two of Q1 earnings season sees financial companies Goldman Sachs (GS), Citigroup (C), Bank of America (BAC), and American Express all reporting. Rail freight and logistics company CSX, consumer staples company Johnson and Johnson (JNJ), and United Airlines are also on the docket.
Economic Calendar
Monday – N/A. Earnings: Goldman Sachs (GS).
Tuesday – N/A. Earnings: Johnson and Johnson (JNJ), Citigroup (C), Bank of America (BAC), United Airlines (UAL).
Wednesday – March U.S. Retail Sales. Earnings: CSX (CSX).
Thursday – Initial Jobless Claims. Earnings: American Express (AXP).
Friday – N/A. Earnings: N/A.
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