A typical summer trading session with most asset classes trading in tight ranges. USD ticked higher though on low volumes, while equity sentiment holds higher, boosted by tech earnings. Fed's Daly said disappointing jobs data, and limited tariff impact on inflation mean we may need more than two rate cuts which drove UST flattening on Monday, which has since reversed.
We are upgrading W to Buy. We had downgraded to Neutral after initial tariff announcements and missed real upside, but still upgrade to Buy as the tariff macro has been less of an impact than expected, execution has continued (we never doubted this), and Wayfair has demonstrated that it’s very well positioned to capture share amidst market disruption.
The Stoxx Europe 600 index is down 12% since the close on 2 April, prior to the announcements of US tariffs and subsequent retaliatory measures. We update our estimated net income sensitivity to market declines, as originally set out in our 2025 outlook: Quid games (published 6 January 2025).
This week, we hosted our 20th annual Cleveland Clinic event highlighted by meaningful physician discussions on trends in cardio, diabetes/obesity, myeloma, autoimmune, and respiratory diseases.
Quiet start to Tuesday with G10 FX trading in tight ranges against the USD, US equity futures flat while USTs are weaker, led by the back-end. Reports suggest that India could cut its tariffs on US imports to avoid April 2 measures, following Trump's headlines on Monday on a potentially softened and/or targeted approach.
Markets got a reprieve from the Fed as it slowed the pace of QT while leaving two cuts on the table. Powell's comments also signaled willingness to look through tariff price level impacts as transitory inflation.
President Trump said that he would add an extra 25% tariff on Canadian steel and aluminum - raising those tariffs to 50% - if Canada does not remove the 25% tariff it placed on electricity from three US states. Ontario's Premier Ford said that he agreed to suspend the 25% electricity surcharge.
