Markets Update

US stocks were lower last week again, with the S&P 500 back near correction territory (-10% from recent highs). The index is now down 5 of the last 6 weeks, with fairly broad-based weakness across sectors but big tech takes the brunt of the losses. Ongoing trade wars, and total lack of clarity around tariffs in general, continue to dominate news flow. The risks to the American consumer, and the inflationary impacts of the tariffs, is and will be a talking point for months. We’re also continuing to see signs of a stretched consumer. March consumer confidence was down for a 4th straight month, and now sits at its lowest level in 2 years. Lululemon also highlighted an increase in consumer caution on their earnings call last week. The buy-the-dip narrative also feels a bit tired as US equities saw the biggest weekly outflow of the year last week (-$20.3b).

While all of this points to near-term negative sentiment, there are still some positive developments that markets can try to focus on. 1) Trump said the all-important April 2nd tariff announcements will include ‘very lenient’ reciprocal tariffs while Europe is reportedly ready to announce some concessions, 2) Trump is also pointing to reduced tariffs on China to get a deal done with TikTok, 3) Employment data continues to look solid for the time being, and 4) US households continue to hold record wealth supported by a strong labor market that is yet to budge from what we can tell.

Charts that stuck out:

Just about all of last week’s -1.5% move happened on Friday