Weekly Market Update

The Friday afternoon downgrade of US Government debt by Moody’s (Aa1 from Aaa) has Treasury yields higher and a risk-off tone in equities to start the week. Moody’s (a lagging indicator per Treasury Secretary Bessent) becomes the last major rating agency to make the downgrade, and it comes as the House struggles to get past…

Treasuries open the final trading day of the week rallying after reaching some key yield levels yesterday. The buying is a sign that investors continue to find value, and perhaps more importantly that foreign buyers remain in the game, which was a fear coming after the “Liberation Day” tariff announcement. Also, the latest inflation report…

Weekend talks between the US and China produced a lowering of tariffs between the two countries for 90-days and that has sparked a robust risk-on rally to open the week (Dow futures up over 1000 points). Much like the US-UK “deal” was more a framework to quide negotiations, this new deal is also short on…

While plenty of details of the US-UK trade “deal” remain to be hammered out, and despite talking points that highlight a more limited agreement than comprehensive, the market sees an opening for more deals and that is the operative theme this morning. The attention will quickly turn to this weekend’s China meeting.   With Inflation Week…

Meeting Highlights  As widely anticipated, the Fed held the target rate range at 4.25% – 4.50%.  The updated rate forecast, or dot plot, still has 50bps in rate cuts in 2025, same as the March and December forecasts.  However, the margin is narrower. In March, 11 of 19 participants called for two or more cuts…

News that the US and China are indeed in trade negotiations has put a risk-on mood into early trading, even with the FOMC rate decision on tap for this afternoon (2pm ET). With no expectation of a change in monetary policy, traders are taking full advantage of the trade talk news to push equities, but…

April nonfarm payrolls rose 177 thousand, easily beating the 133 thousand expected and 185 thousand in March (revised down from an initial 228 thousand).  The average monthly gain over the last 12 months is 152 thousand, so April was slightly better than the average. Speaking of revisions, February was revised down by 15 thousand jobs…

The initial estimate of first quarter GDP was negative (-0.3% YoY), owing to the huge front-running in import purchases, but the hotter-than-expected inflation numbers from the report also concern traders as it may limit the Fed’s response function to a slowing economy. As a result, we’re seeing an early risk-off trade that is keeping Treasury…

It’s a busy week of first-tier economic reports, headlined by Friday’s April release of nonfarm payrolls. The question is, with much of the data coming pre-tariff impact, will it matter much to investors as tariff “negotiations” continue in the background? Equity futures are quiet as is Treasury trading as the data flow doesn’t get started…

A quiet start to Friday has Treasuries trading similarly while equities are finding a bit of profit-taking in play after a couple strong up days for stocks. The data calendar is limited and that has investors looking ahead to next week’s deluge of employment numbers, assuming the headlines from DC don’t upset the apple cart….

With President Trump shifting his comments and tone to a more market-friendly stance regarding Fed Chair Jay Powell’s future and China tariffs, markets are feeling frisky, both Treasuries and equities. We’ll see if that positive tone remains throughout the day. Currently, the 10yr is yielding 4.28%, down 10 bps on the day, while the 2yr…

The question of Fed independence is the next worry for markets, and it has generated a risk-off tone as trading begins. President Trump’s comments last week expressing unhappiness with Fed Chair Powell and the claim he can oust him if he wants to, has unnerved financial markets already dealing with non-stop tariff news. It’s a…