Weekly Market Note_03.28.2025
Global Markets & Economic Data:
The April 2nd tariff deadline is looming over markets and the trend appears to be to the downside in risk assets. However, the calendar turn to Q2 might nurture some fresh market narratives to rejuvenate sentiment.
US: Goods imports ramped up ahead of expected tariffs. The Kansas City Fed Manufacturing Survey showed improvement, but cost pressures are rising. Weekly jobs figures reflect continued strength in the labor market. Home sales data remains subdued, but inventories are rising, especially in the southeast.
EU: Loan growth activity is trending higher, driven by residential mortgage demand. Sweden's consumer confidence figures are diving. Norges Bank increased its inflation forecast. Germany's business sentiment rose in March.
Asia: Tokyo CPI surprised to the upside rising above BoJ targets. Japanese investment grade credit spreads are tightening. HK tourist arrivals recently hit the highest level since 2019. The country's fiscal deficit is projected to widen by 11% in 2025 driven by increased domestic stimulus measures.
BUY THE DIP!
Purchasing the market winners of 2024 in recent weeks has been a natural response from US retail investors, who are accustomed to v-shaped recoveries in bull markets.
This phenomenon has, in fact, revitalized the momentum risk factor, which has been outperforming lately.
However, there is now a significant amount of recently acquired inventory at risk of being liquidated if equities continue to face selling pressure.