This week, we dive into the latest market movements and the impact of recent geopolitical events on various asset classes.

Market Overview:

• Tariffs and Market Reactions: The week started with concerns over new tariffs imposed on April 2nd. This decision led to significant market movements, with the US 10-year Treasury yield fluctuating between 4% and 4.6%. However, on Wednesday, the pressure on the Bond Market forced President Trump to announce the removal of tariffs above 10%, except for those on China.

  

  U.S. 10 year with yields up 50bps since the 2nd of April Announcement.

• Flight to Safety: The volatility in the market led to a sell-off in stocks and not the usual flight to safety in bonds. The recent sell-off in US Treasuries by foreign investors, particularly from Japan and China, added pressure on the market.

Key Players and Their Moves:

• Trump Administration: The administration’s decision to remove tariffs above 10% was seen as a response to market pressure. This move is expected to benefit tech stocks like Apple and Nvidia, which were previously affected by semiconductor tariffs.
• On the announcement of the removal of Tariffs above 10%, stocks experienced an historical move up.

  

   

• Federal Reserve: The Fed is expected to cut rates three times by the end of the year, with the first cut anticipated around July. This is in response to the market’s volatility and the need to stabilize the economy.

Asset Performance:

• Stocks: The S&P 500 is down 9% year-to-date, while the NASDAQ is down 13%. European markets are outperforming, and the US dollar has weakened significantly.

  

   

• Gold: Gold has seen a strong performance, reaching new highs as investors seek safe-haven assets.

  

• Oil: Oil prices have been under pressure, trading around $60 per barrel.

Technical Analysis:

• S&P 500: The index is expected to find support around 4,800-4,900 which could now be seen as the Trump Put. On the way up 5,700 is resistance.

  

• Euro-Dollar: The Euro has strengthened significantly against the US dollar, moving from 1.10 to 1.14 over the week.

Upcoming Events:

• Earnings Season: The earnings season has started, with key reports from Bank of America, Citigroup, and Netflix expected this week.

  

   

• Economic Data: Retail sales data and the ECB rate decision are key events to watch. The ECB is expected to cut rates by 25 basis points. Markets will be closed on Friday due to Easter.

  

   

   

Conclusion:

• The market remains volatile, with geopolitical events and economic data driving significant movements. Stay tuned for more updates and insights in our next episode.

For those looking to deepen their market knowledge, consider joining our 4×4 Video Series https://duponttrading.com/4×4-course/

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Have a good Trading Week! And Happy Easter!

Greg📩 Contact: greg@duponttrading.com