By Bill Hornbarger, Chief Investment Officer
Three Things to Watch
- This is a busy week in terms of data, earnings and U.S. Federal Reserve (Fed) speakers, but the focus will remain on the fallout from President Trump’s imposition of tariffs. They were much steeper than expected, and equities declined sharply. The question is whether the two-day repricing of global markets represents a bottom and buying opportunity or whether there is more to come. We expect more headlines suggesting retaliation and escalation, which will keep markets on edge.
- On the data front the March Consumer Price Index (CPI) will be released on Thursday. Both CPI and core CPI are expected to decline on a year-over-year basis to 2.6% and 3.0%, respectively. Inflation and inflation expectations remain top of mind for the Fed, with the new tariffs expected to push prices higher in the months ahead.
- First-quarter earnings season also gets underway with JP Morgan, Wells Fargo and BlackRock all expected to post first-quarter earnings, along with Delta Airlines. The ongoing austerity measure combined with the new trade policy are expected to slow the economy, so forward guidance will be watched closely.
Three Things to Know
- Trump tariffs hit technology and energy stocks the hardest last week, with the average energy stock falling 19.7% and the average tech stock down 14.4% in the two days after Liberation Day (April 2). (Source: Bespoke)
- The S&P 500 fell 10.5% over the last two trading days, which was the fifth biggest two-day decline since 1950. What has happened in the past following the biggest two-day declines? Stocks were substantially higher over the next one, three and five years every time. (Source: Charlie Bilello)
- Duke is the only team to have an NCAA Tournament game with a higher field goal percentage, more free throw attempts, more assists, fewer turnovers and more steals than their opponent and yet still lose (since steals became official in 1986). Teams had been 335-0 when doing all that in the tourney. (Source: OptaSTATS)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.