Daily Newsletter 4/11/25
Good morning.
The U.S.-China tariff war has escalated significantly, with both nations imposing steep duties on each other's goods, leading to heightened global economic uncertainty. This ongoing conflict underscores the challenges of achieving stable trade relations between the world's two largest economies.
The United States and China are engaged in an economic conflict that is likely to be resolved through mutual compromise.
The situation is marked by excessive uncertainty, compounded by frequent shifts in tariff policies.
Everyone will be impacted by the U.S.-China trade war. In today's interconnected global economy, no country remains unaffected by the U.S.-China trade war.
The profit-taking on Thursday was justified given the scale of Wednesday's rally.
The dollar continued to decline following China's increase in tariffs, while U.S. futures shifted downward. Meanwhile, gold rose, reinforcing its position as a safe-haven asset. Oil prices are declining and are set to record a second consecutive week of losses.
As markets seek direction, any news, regardless of its significance, can temporarily influence market direction.
We still anticipate a moderate recession. Uncertainty surrounding tariffs and supply chains, the potential implementation of a 10% general tariff, government layoffs, and insufficient spending reductions and tariff revenue to support a tax cut are the primary contributors.
Given these circumstances, closely tracking consumer and business sentiment, as well as Federal Reserve speeches, has become critically important. Closely following Federal Reserve actions on interest rates and, more importantly, its commitment to maintaining independence is absolutely essential.
Economic Data Releases in the U.S.:
PPI:
Producer Price Index (PPI) for March is expected to show no change (0%), while Core PPI (excluding food and energy) is forecasted to increase by 0.2%.
Year-over-year Core PPI is projected at 3.6%, down from the previous 3.4%.
The Michigan Consumer Sentiment Index:
The Michigan Consumer Sentiment Index's preliminary reading for April 2025 is scheduled to be released today, at 2:00 PM EST. The previous final figure for March was 57.0, marking a significant decline from February's 64.7 and reflecting ongoing concerns about inflation, unemployment, and economic policies.The Current Economic Conditions Index (CECI) and the Consumer Expectations Index (CEI) both experienced significant drops.
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