What’s important in today’s US and global markets
Mike Dolan, Editor, Financial Industry, Financial Market
It’s Friday, so today I’ll give you a brief overview of what’s going on in the global market, then provide weekend reading suggestions from the headline.
Today’s market
*US President Donald Trump on Thursday opened a new front in the world trade war that threatened to slap 200% tariffs on wine, cognac and other alcohol imports from Europe, struck financial markets and caused a recession horror.
*On Thursday, U.S. Senate Democrat Chuck Schumer said he would vote to advance the Republican suspension funds bill, indicating his party would offer a vote to avoid government shutdowns.
*The European Central Bank has given UnicRedit approval to buy up to 29.9% of Commerzbank, Italian Bank said Friday, adding that it is likely they will wait until next year before deciding whether to pursue the acquisition.
*German waiting Prime Minister Friedrich Merz on Thursday supported a proposal to skeptical lawmakers to significantly increase the state’s borrowing, framing them as a test to protect the safety of Europe, taller and Europe at the global stage.
*China’s Hong Kong and Macauers offices reposted a commentary on Friday that would sharply drop stocks in the Hong Kong-based conglomerate after being criticised for CK Hutchison’s port contract and China’s betrayal with BlackRock in the US.
Shutdown grace
The S&P 500 on Thursday recorded a technical 10% revision from the recent high for the first time since 2023, but some easing could be at the end of the frenzy of the week from signs that partial US government closures could be avoided.
With a loss of more than 4% in the week from Thursday to the end of Thursday, the S&P 500 continued its course in its worst week of two years, but the futures bouncing overnight as one of the multiple clouds hanging in the market appeared to have passed after the bell.
US Senate Democrat Chuck Schumer said he will vote to advance the Republican suspension funding bill, informing him that his party will provide the necessary votes to avoid government shutdowns before the midnight deadline Friday.
However, the risk of a partial government shutdown is just one of the uncertainties of stock weight. This includes the escalation of the world trade war, which could lead to a rare economic downturn with falling.
There will be few economic updates this week, and with the latest Federal Reserve policy meeting scheduled for next week, the market will today focus on the latest research into consumer trust at the University of Michigan.
Economic anxiety appears to undermine investment trust beyond stocks as high-yield bond risk premiums have expanded from their recent lows without further decreasing the Benchmark Treasury yields.
The so-called junk spread sub-investment grade corporate bond index expanded to its largest in over six months on Thursday, expanding to 340 basis points, reaching its highest high yield volatility gauge since November 2023.
The overseas equity index took a break on Friday as Wall Street futures stabilized despite continued losses in some European sectors.
Mainland China stocks rose more than 2% to fresh domestic stimulus wishes. China’s financial regulators pledged in a statement Friday to ease consumer credit quotas and loan terms, urging institutions to step up their support for consumption.
Meanwhile, the dollar surged high, while gold surged to another record high.
Weekend reading suggestions
Here are some articles that go away from daily headlines that you may find interesting.
*Ragram Rajan, former Reserve Bank boss of India and former IMF chief economist, will entrust “Trambonomics” in a project syndicate post and ask if Trump’s agenda is worth it if prices are “exorbitant privileges” in America.
*The International Finance Institute in Washington examines Trump’s policies today and is concerned about the sustainability of the US debt trajectory, with the model showing tax or spending reductions of more than 2.5% of GDP required to stabilize the ship.
*Voters’ regret? Reuters shows how Doge’s cuts to work are causing pain for Trump supporters.
*This week’s quarterly review of International Village Banks spoke about the risks faced by the market and the economy due to “customers surrounded by uncertainty” and “competition between growth and debt trajectories.”
*This year’s Economic Research Award at Central Banking Magazine Central Banks will be presented to Adrian, Boyarchenko and Giannone for its “risk growth” model and its use of financial position to measure its use.
*As European defence and fiscal policy changed this year and defence stocks spiked, Reuters reporters have shown how many European money managers will review ESG policies and find ways to take part in the shift.
* Meanwhile, former Airbus boss Tom Enders is urging Europe to prepare for the worst by leading the race to build armed robots.
*As Adnan Mazaray’s Peterson Institute of International Economics explains, the messy world of sovereign debt restructuring and “unhappy debt” turns into Syria.
* Speaking of “unhappy debt,” some financiers are looking into what happens when people on the US Treasury Department’s rif drive consider long-standing unpaid British debt from World War I to America.
* As Emma Batha of Thomsonreuters explains her characterisation as “UK parents quit their jobs to care for a long covid child,” the world looks back on five years since the pandemic, many are still directly affected.
Today’s Chart:
Next week will bring about a sweep of major central bank meetings that will normally host global markets in Throul. However, the scale of uncertainty in US policy and the development of the world trade war means that money easing over the past year is likely to halt as central bankers move on the bystanders and consider fallout.
Today’s Events to Watch:
*University of Michigan March Consumer Sentiment Survey. Manufacturing and sales in January Canada
*European Central Bank Board member Piero Cipollone speaks
*US corporate revenue: Hudson Global, Drilling Tools, Weride, Gogo
*Mark Latte, NATO Executive Director, Washington
(Edited by Mike Dolan, Anna Szymanski, mike.dolan@thomsonreuters.com)
