The Path from “America First” to “Europhoria”

European equities are outperforming the S&P 500 by a long shot

Highlights

• European equities are outperforming the S&P 500 by a long shot

• Global stock markets pull back as reciprocal tariffs loom

• High yield spreads widen as risk sentiment wanes

• Cooling services inflation outweighs tariff concerns in the bond market

Key Takeaways

• Tariff Chaos Hits Markets: Global stock markets are on track for their fourth consecutive losing session, with “Liberation Day” just 48 hours away (reciprocal tariffs) and chaos set to face global supply chains in COVID-like style. Today’s WSJ reports that most trading partners will be facing tariff rates of up to 20%. The administration has already set the table, having imposed 25% steel and aluminum tariffs, an additional 20% tariff on China, 25% tariffs on most goods from Canada and Mexico that aren’t covered by the USMCA, and a 25% tariff on all imported cars starting April 3^rd.