The Market Brief
Hey team. U.S. stock futures slipped during early trading on Tuesday, continuing several days of fluctuations as investors contended with persistent uncertainty stemming from the global trade war.
Let-s see what’s ahead for this market!
Impact Snapshot
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Macro Viewpoint
Slow drift higher on Monday with stocks shrugging off a mixed to weaker ISM Manufacturing + negative weekend headlines.
We saw some buying of SPX upside today and some unwinds of QQQ hedges as well. There will be a heavy macro focus this week as we get ISM Services (Wednesday) and NFP (Friday).
Wall St. Prime Intel
The effective tariff rate is likely to end up in the 10-13% rate. This is unlikely to cause recessionary outcomes. Although Risk/ Reward is more balance here , the pain trade continues to be higher as the data is likely to hold.
“The US will be in recession when personal income growth is near zero.” Last month Personal income growth at 0.8% mom. The US consumer health shouldn’t be questioned – This is an income driven cycle.
Risk assets enter June at a critical inflection point, with a conflicting mix of strong economic data, geopolitical uncertainty, and growing technical fragility.
Most expect the data to roll over the next 2 months. This is the pivot window for the Short Risk/ Long Bonds trade.
However, if the data holds up investors will be unpleasantly surprised. This is why the pain trade continue to be higher in Risk.
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