The markets were not all that giddy about the Time Magazine interview with Pres Trump. The article addressed several key international and economic issues.
- He expressed no or little concern about the bond market turmoil earlier in April, stating confidence in his economic direction.
- On foreign policy, he asserted that Crimea would remain with Russia and maintained that peace is possible even with Vladimir Putin in power
- When asked about potential U.S. involvement if Israel goes to war with Iran, he clarified he didn’t commit to staying out.
- He confirmed that China’s President Xi had contacted him
- He also emphasized that high tariffs—i.e. 20% to 50%—are part of a long-term strategy to bolster the U.S. economy, calling such a scenario a “total victory.”
- Trump noted upcoming trade deal announcements and reiterated his openness to taxing millionaires.
- He also entertained the oft-mentioned expansionist ideas such as acquiring the Panama Canal, Greenland, and making Canada the 51st U.S. state.
Although stocks were lower to start the trading day, they did ease into the open and moved into positive territory in the morning session.
The Michigan consumer sentiment index was a positive at least relative to the preliminary data, although still near the lowest levels going back to at least 2009. The inflation readings were also elevated with one-year inflation at 6.5%, but at least it was lower than the 6.7% preliminary.
That helped to keep the stocks in positive territory. As Pres. Trump said today the market seem to be getting used to the tariffs (until there used to or the impact from inflation/supply shocks make the markets nervous again). Nevertheless, today was the fourth consecutive day higher in major US stock indices. The NASDAQ index after losing over -2.5% clawed back those declines and added 6.7% more for the week. The S&P index closed higher by 4.59% for the trading week after also climbing by about -2.5% on Monday.
For the trading day:
- Dow industrial average rose 0.05%
- S&P index rose 0.74%
- NASDAQ index rose 1.26%
European shares also advanced today and for the week:
- German DAX rose 0.81% for the day, and 4.89% for the week.
- UK’s FTSE 100 rose 0.09% for the day and 1.69% for the week
- CAC rose 0.45% for the day and 3.44% for the week.
- Spain’s Ibex rose 1.33% for the day and 3.39% for the week
- Italy’s FTSE MIB rose 1.47 for the day and 3.8% for the week
In the US debt market, yields were lower today, and closed lower for the week as well:
- 2-year yield 3.756%, -3.5 basis points. For the week the yield fell -4.4 basis points.
- 5-year yield 3.875%, -5.2 basis points. For the week the yield fell -6.7 basis points.
- 10 year yield 4.250%, -5.4 basis points. For the week, the yield fell -8.0 basis points
- 30 year yield 4.716%, -4.9 basis points. For the week the yield fell -9.0 basis points
The 2 – 10 year spread reached its highest level since January 2022 this week rising to 64.8 basis points, but is back down to 50.1 basis points at the end of the week.
The 2-30 year spread also reached the highest level going back to January 2022 at 113 basis points, but is closing at 96.2 basis points.
The US dollar is ending the day higher versus all the major currencies. Looking at the changes:
- EUR, +0.25%
- JPY +0.79%
- GBP +0.24%
- CHF +0.12%
- CAD +0.04%
- AUD +0.20%
- NZD +0.60%
For the trading week,, the greenback was mixed with gains versus the EUR, JPY, CHF and losses vs the GBP, AUD and NZD. The USD was near unchanged vs the CAD. A snapshot of the week changes shows:
- EUR +0.26%
- GBP -0.16%
- JPY +1.12%
- CHF +1.44%
- CAD unchanged
- AUD -0.35%
- NZD -0.54%
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