Markets Believe in a Trump Reprieve

Apr 07, 2026

∙ Paid

Key Takeaways

Junk Bond Redemptions Causing Concern: Equity markets are firm to start the day, as investors shrug off the Trump bombing threats. All in, both the Asia-Pac and Emerging Market equity indices are on pace to post +0.8% advances. If there is pain, it has been in the junk bond market, where redemptions are on the rise. Jamie Dimon’s client letter, especially his warnings on private credit, is well worth a read.
Tourism and Consumer Discretionary Take a Huge Hit: Losers in the Iran war have been global travel/tourism and consumer discretionary spending in general. So far, the gasoline shock has drained $150 billion out of household cash flows at an annual rate. If there is a winner, it is China, which planned for this war some time ago, as it did previously with the tariff file.
Fade the Friday Payroll Report: We wonder why practically every economist has been gushing over Friday’s payroll report, which is destined to be revised and likely lower, as has been the case over 90% of the time in the past year. The hallmark of Friday’s report that was missed was that both average weekly earnings and the index of aggregate hours worked dipped in March (-0.1% MoM for the former; -0.2% for the latter). That’s a hot labor market? The two going down in tandem is basically a one-in-ten event.