1/ T-Day
2/ Sentiment
3/ Unemployment
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1/
T-Day
UNCERTAINTY…
It’s the word of 2025 so far.
We are swimming in a sea of uncertainty.
The Fed used the word, CEO’s are using the word consistently on their conference calls and the market hates it. Maybe, just maybe, we get a little more clarity from the White House this Wednesday.
T-Day. Will April 2nd give the market and its participants some certainty as the President has declared it “Liberation Day”? This is the day in which he is scheduled to announce his proposed tariffs and to whom they will be imposed upon.
Once announced, how dramatic will they be and what retaliatory tactics will be implemented against the U.S.?
It’s anyone’s guess as to what may occur as numbers keep getting bandied about and negotiations behind the scenes continue as global leaders attempt to avoid any dramatic implementation.
Going into this week investors took cover anticipating the worst and took risk off the table as selling accelerated into the weekend. At this point the event itself may likely get a rally. In this case it feels more like a sell the rumor and buy the news event.
2/
Sentiment
Consumer sentiment is at historically low levels. How bad is it? Thanks to Bespoke for the following data…
The survey came in above 50% bearish for the fifth straight week. This was only the fourth time since 1987 that the sentiment was this low for this long. The last two occurrences were 2008 during the Financial Crisis, and in October 2022 which marked the beginning of the current bull market.
Will this contrarian indicator work again and might the current correction and sentiment readings be as bad as it gets?
3/
Unemployment
Unemployment. Friday marks the first monthly unemployment update since the Fed’s last meeting where they projected a year-end rate of 4.4%. That projected number which is higher than the current 4.1% didn’t cause the Fed to budge in their stance for two more cuts by year end.
However, any number hotter than current levels may cause the Fed to change their stance. The best bet for the market is for this number to be in-line with expectations and we can get the focus back on how tariffs may impact inflation.
Lastly, has DOGE had an impact yet? Not likely as seen in the weekly claims but clearly this is something to keep an eye out for going forward. This should be an April/May issue, but an issue to watch nonetheless.
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Originally posted 31st March 2025
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