The Trade War Shifts from Canada and Mexico to Asia and Europe

Trump shifts his tariff targets outside of North America...

Highlights

• Trump shifts his tariff targets outside of North America...

• ... prompting a sell-off in global equity markets and a rally in bond yields

• American businesses and consumers are set to feel the brunt of the tariff pain

• Uncertainty is still lingering, weighing on the economy

Key Takeaways

• Short-Covering Rally, Confidence Fading: The U.S. equity market has bounced of late, and it has been purely a short-covering rally. Much damage was done during the correction, and the consumer-sensitive segments of the S&P 500 remain in correction territory. U.S. companies in March announced the fewest share buybacks since October 2022. The IPO calendar has really thinned out this year as well, and junk bond deals have slowed to a trickle. All signs of fading confidence. As for bonds, a different story, as the JPMorgan Chase client survey shows long positions building to their highest level in a month.