Futures on the main Wall Street indices are all up by 0.2%. The cheer was partly courtesy of upbeat earnings from financial giants like JPMorgan Chase, Wells Fargo, and BlackRock after reporting positive first-quarter results.

Meanwhile, the trade war between the U.S. and China continued its soap opera. China decided to up the ante, increasing tariffs on U.S. imports to 125% in retaliation to Donald Trump's tariff hike on Chinese goods to 145%. This tit-for-tat has kept the stock market on a rollercoaster, with investors bracing for the next twist. Trump even brought up his old tune again yesterday, talking about his “friend” Xi, with whom he would like to conclude a trade agreement. With friends like that, there's no need to look for enemies. Xi, for his part, will be preaching to the converted in Vietnam, Malaysia and Cambodia next week, just to mark his territory. Beijing has also put the kibosh on imports of Hollywood films. Fewer visas for superheroes.

In the realm of economic data, the U.S. Producer Price Index (PPI) for March threw a curveball, unexpectedly declining by 0.4% against the predicted 0.2% increase. This followed a modest 0.1% rise in February. Energy prices took a dive, falling 4%, while food prices slipped by 2.1%. The core PPI, stripping out food and energy, also dipped by 0.1%, defying expectations of a 0.3% gain. Year-over-year, the PPI rose by 2.7%, and the core PPI increased by 3.3%, both slower than February's pace. These numbers hint at a cooling of inflation at the producer level, which could squeeze retail profits if not passed on to consumers. All this unfolds amid worries about tariffs' impact on global growth and inflation. Treasury yields stayed lofty, with the 10-year note yield at 4.393%, flirting with its February highs. Traders are betting on over 90 basis points of interest rate cuts by the Federal Reserve this year, starting in June. Safe-haven currencies, such as the Japanese yen and Swiss franc, also gained strength against the dollar. 

After Wednesday's dazzling recovery, thanks to Trump stepping back from universal tariffs, the stock indices took a slight dip yesterday. As we head into the weekend, volatility remains high. This is driven by the sharp rise in U.S. bond yields, a declining dollar, and a wave of risk aversion that has sent gold soaring past $3,200 an ounce - up more than 20% since the start of the year.

All the major asset classes are in the red in 2025, except gold. Equities, emerging market equities, listed real estate, high-yield bonds, investment-grade bonds, commodities, and bitcoin all dropped. Even the historic rise on Wall Street on Wednesday (+10% for the S&P 500 in one session) was not enough to restore balance.

The storm triggered by the White House's tariffs, followed by the subsequent U-turns and controversies, have permanently damaged something in international economic relations. US stocks fell sharply again yesterday (-3.5% for the S&P 500) despite continued signs of détente between Washington and most of the countries that had been hit by the salvo of tariffs that Donald Trump ended up pausing. 

Navigating the investment landscape these days feels like trying to dance on a tightrope. While a handshake between the two global giants, the U.S. and China, seems the most probable outcome, the diplomatic fallout is already significant. The ripples extend far beyond the usual Sino-American rivalry, shaking up international relations across the board.

The heart of the matter is a growing lack of confidence in the U.S. administration. Recent hasty decisions have only added to the discomfort. The White House's plan to cut operating costs and reduce national debt hinges on a patchwork of strategies. Unfortunately, some are faltering, leading to a sense of disarray, regardless of whether there was ever a coherent plan. Just take a look at the bewilderment of Jamieson Greer, the U.S. trade representative, who appeared before a House committee on Wednesday. In a viral video, he looks genuinely shocked to learn that Donald Trump has suspended customs duties for 90 days without informing him, despite his central role in trade matters.

As we have explained at length recently, it's necessary to keep a close eye on the US bond market to anticipate the next moves. For the White House's blue sky scenario to work, one of the pillars is the decline in Treasury bond yields. However, after falling back, they have skyrocketed again in a brutal and spectacular manner. It is even the biggest weekly rise seen in the US 10-year bond since 2001. This development is worrying because it is the result of massive sales of US bonds due to liquidity needs and the loss of investor confidence, particularly among non-US holders. A trend confirmed by the violent slide of the dollar. This situation is not necessarily long-lasting, but it is not tenable for long. If the “transition period” mentioned by Donald Trump, i.e. the period during which the Americans will be suffering, lasts too long, a vicious downward spiral could set in. Several influential voices on Wall Street have recently pointed out that the Americans do not take pain very well.

The first-quarter earnings season will pick up pace next week, with financial Bank of America, Citigroup, and Morgan Stanley, due to reveal their own fiscal tales. 

In Asia Pacific, the fall on Wall Street is causing turmoil. Japan fell 3%, losing ground for the third consecutive week. South Korea and Australia are down 1%. It's up in Taiwan, because TSMC is up 10% and the stock accounts for 40% of the market. India also rose 1%, but was catching up with Wednesday's American rise because the Bombay stock exchange was closed yesterday. Finally, China held up well, rising slightly on the mainland and more vigorously in Hong Kong (+1.1% for the Hang Seng). European indices are in the red.

Today's economic highlights:

On today's agenda: the harmonized CPI of the euro area and the CPI in Germany; the monthly GDP of the United Kingdom; in the United States, the final demand PPI and the University of Michigan sentiment. See the full calendar here.

  • Dollar index: 99,803
  • Gold: $3,218
  • Crude Oil (BRENT): $63.39 (WTI) 59.81
  • United States 10 years: 4.44%
  • BITCOIN: $82,289

In corporate news:

  • Berkshire Hathaway issued yen-denominated bonds totaling 90 billion yen ($626 million).
  • American Airlines experienced an incident where one plane was struck by another on the taxiway at Reagan Washington National Airport.
  • Argenx received US FDA approval for a prefilled syringe version of Vyvgart for home use.
  • TSMC experiences a surge in AI demand ahead of impending US tariffs.
  • Frontier Group is abandoning its forecasts.
  • In Venezuela, PDVSA is suspending oil loading authorizations for Chevron.
  • Google is laying off hundreds of employees in the Android and Pixel group, according to The Information.
  • Harley-Davidson is considering selling its finance subsidiary for more than $1 billion, according to Bloomberg.
  • Lucid is acquiring certain facilities and assets of Nikola in Arizona.
  • Donald Trump has had the security clearances of SentinelOne canceled, guilty of hiring an executive he doesn't like.
  • Shares of Novavax fall after the U.S. health minister expresses concerns about the effectiveness of the company's COVID vaccine.
  • Tesla is launching a new long-range variant of the Cybertruck in the United States, priced at $69,990. Tesla is also suspending the taking of new orders for Model S and Model X on its Chinese website.
    Today's top earnings reports: JPMorgan Chase & Co, Wells Fargo, Morgan Stanley, BlackRock, Bank of New York Mellon, Fastenal ...

Analyst Recommendations:

  • Booz Allen Hamilton Holding Corporation: Goldman Sachs downgrades to neutral from buy with a target price reduced from USD 150 to USD 109.
  • Chevron Corporation: Scotiabank downgrades to sector perform from sector outperform with a price target reduced from USD 160 to USD 143.
  • Donaldson Company, Inc.: Stifel downgrades to neutral from hold and reduces the target price from USD 70 to USD 63.
  • Eog Resources, Inc.: Scotiabank upgrades to sector outperform from sector perform with a price target reduced from USD 150 to USD 130.
  • Everest Group, Ltd.: Jefferies upgrades to buy from hold with a target price raised from USD 376 to USD 415.
  • Huntington Ingalls Industries, Inc.: Goldman Sachs upgrades to buy from sell with a price target raised from USD 145 to USD 234.
  • Northrop Grumman Corporation: Goldman Sachs upgrades to neutral from sell with a price target raised from USD 424 to USD 521.
  • Nxp Semiconductors N.v.: AlphaValue/Baader Europe upgrades to buy from add with a target price of USD 226.
  • Occidental Petroleum Corporation: Scotiabank downgrades to sector perform from sector outperform with a price target reduced from USD 60 to USD 40.
  • Aptiv Plc: RBC Capital maintains its outperform rating and reduces the target price from USD 82 to USD 60.
  • Booz Allen Hamilton Holding Corporation: Goldman Sachs downgrades to neutral from buy with a target price reduced from USD 150 to USD 109.
  • Carmax, Inc.: RBC Capital maintains its outperform rating and reduces the target price from USD 103 to USD 80.
  • Charles River Laboratories International, Inc.: Baird maintains a neutral recommendation with a price target reduced from 155 to USD 101.
  • Deckers Outdoor Corporation: Piper Sandler & Co maintains a neutral recommendation with a price target reduced from USD 210 to USD 100.
  • Devon Energy Corporation: Scotiabank maintains its sector outperform recommendation with a price target reduced from 45 to USD 35.
  • Edison International: Haitong International Research Ltd maintains its outperform recommendation and reduces the target price from 94.89 to USD 70.28.
  • Elf Beauty: JP Morgan maintains its overweight recommendation and reduces the target price from 127 to USD 70.
  • Etsy, Inc.: Piper Sandler & Co maintains a neutral recommendation with a price target reduced from USD 52 to USD 40.
  • Invesco Ltd.: Evercore ISI maintains its in-line recommendation and reduces the target price from 18 to USD 13.
  • Kkr & Co. Inc.: Barclays maintains its overweight recommendation and reduces the target price from 181 to USD 129.
  • Marvell Technology Group Ltd: Citigroup maintains its buy recommendation and reduces the target price from USD 122 to USD 96.
  • Newell Brands Inc.: JP Morgan maintains its neutral recommendation and reduces the target price from 8 to USD 6.
  • Nike, Inc.: Piper Sandler & Co maintains its overweight recommendation and reduces the target price from 90 to USD 70.
  • Skechers U.s.a., Inc.: Piper Sandler & Co maintains a neutral recommendation with a price target reduced from USD 65 to USD 50.
  • Stellantis N.v.: HSBC maintains its hold recommendation with a price target reduced from 13 to EUR 9.
  • T. Rowe Price Group, Inc.: Evercore ISI maintains its in-line recommendation and reduces the target price from 104 to USD 80.
  • Trex Company, Inc.: Citigroup remains neutral recommendation with a price target reduced from USD 78 to USD 60.
  • V.f. Corporation: Piper Sandler & Co maintains a neutral recommendation with a price target reduced from 18 to USD 12.
  • Willscot Holdings Corporation: Jefferies maintains its hold recommendation with a price target reduced from USD 38 to USD 27.