/ April 04
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Thursday:
Initial Jobless Claims (225K exp.)
ISM Services PMI (53 exp.)
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Friday:
Non Farm Payrolls (128K exp.)Unemployment Rate (4.2% exp.)
Fed Chair Powell Speech
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Thursday:
N/A
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Friday:
N/A
Daily Briefing
*The stock market experienced a sharp selloff following President Donald Trump's announcement of sweeping tariffs on nearly all U.S. trading partners; the Dow Jones Industrial Average plunged more than 1,500 points, the Nasdaq Composite slumped -6.0%, and the S&P 500 fell -4.8%;
*The administration imposed 10% tariffs on global imports, effective April 5; higher rates were imposed on specific countries, effective April 9, including a 34% tariff on top of the 20% tariff on imports from China; Japan, Vietnam, and India face tariff rates of 24%, 46%, and 26%, respectively; the EU is subject to a 20% rate now;
*SPY has violated our technical stop level and is now being excluded from our main asset allocation strategy — Enterprise; as far as we can tell, there is no obvious level of support until $505 - $510 downside (S2); the chart below is strictly technical (non-adjusted for fundamentals);
*With the break of support, the MACD signal has tipped negative, signaling continued selling pressure in the days ahead;
*Fears about an economic slowdown also hit small and mid cap stocks; the iShares Russell 2000 ETF (IWM) closed -6.47% lower, while Mid-Caps (MDY) lost -6.67%; yesterday’s declines were by no means concentrated in mega caps; Emerging Markets (EEM) and Foreign Developed Markets (EFA) fared better, with losses only slightly worse than -2% (note the chart below starts from -2%);
*Apple (AAPL, -9.3%) was a significant drag on the broader equity market, along with NVIDIA (NVDA, -7.8%) and other semiconductor shares;
*Among the top 20 S&P 500 constituents, relative outperformers included Costco (COST, +0.21%), UNH (+3.5%) and PG (+1.65%) — all defensive stocks in sectors like Healthcare and Consumer Staples;
*Slowdown worries also translated into lower oil prices due to fears about softening demand; WTI crude plunged back to $67/bbl, contributing to the decline in the energy sector (-7.5%); it was the worst performer, along with technology (-6.9%) and transports (-10.02%);
*In relative to SPY terms, Staples (XLP), Utilities (XLU) and Healthcare (XLV) were the clear winners;
*Treasuries surged as stocks slid, resulting in sharply lower rates; the 10-yr yield dropped 14 basis points to 4.06%, and the 2-yr yield dropped 18 basis points to 3.72%;
*TLT is sitting on the cusp of a technical breakout, with resistance at $92;