Good Wednesday evening MacroEdge Readers & Community,
As we wind down the month of April (insanity) and turn towards May - we can shift towards an early Summer mode for both macro & markets. In the past week - we’ve seen extensive intervention on the part of the fiscal policymakers (really everything ex-Fed) as of today - as they continue to relentlessly talk and thus walk, equity markets back above the ‘Liberation Day’ date price levels - where the equity selloff worsened eventually dipping to almost 30% off on the IXIC, and similar in other indices. Today we also confirmed a rather ugly GDP picture - driven largely by the Q1 import surge - that contributed to the first negative QoQ print since 2022 (GDP-Adv). In earnings data as we anticipated in March, things are holding up well for the largest companies - particularly the MAGS - as we’ve yet to see any real tariff impact hit these companies. Even though guidance has been either pulled/cautionary for many businesses that have reported - markets have focused on the positives in the last few weeks.
Let’s dive in.
Relentless Fiscal Intervention
The relentless fiscal intervention has expanded of late - with one of our contributors noting today that Trump has now mentioned the stock market explicitly more in one month than Biden did throughout his four years. This is a force that is difficult to overcome (as are global CBs — noted in an early April macro note when the BoJ intervened in markets, along with the BoK), for now. The next catalyst will have to be driven by both a combination of something not priced in (times) - which we discuss below.