Market Report.
🍿 If you think we’ve had an incredible week, well, just wait and see, it’s not over yet. Today we have two of the most volatile market data, the NFP and the US unemployment rate. In addition, the chairman of the body in charge of protecting Wall Street, the Fed, will give a speech. With the way the week is going so far, you’d better grab some popcorn and enjoy yourself.
📉 The biggest drop since the pandemic hit in March 2020, Reuters said this morning after the Asian session. That’s how the mood is.
🛠️ A U.S. jobs report to show a slowdown in hiring is expected, while Fed Chair Powell is set to address the economic outlook in the wake of the tariff announcement. However, yesterday’s US data continues to show strength. The PMI data continues to show economic expansion above 50. Unemployment claims came out lower than expected, 219k compared to the expected 225k. And the trade balance is improving. What if everyone is wrong and the US really does manage to generate investment and growth by slowing down the rest of the world?
📊 The tariffs, with the exception of the 25% car charge, have yet to take effect. Trump’s universal 10% tariffs will go into force on April 5, while the apparently “reciprocal” duty rate will be implemented on April 9.
🧮 Some claim to have found the formula for calculating tariffs, and it does not seem that they have spent much time on the subject. In 2024, the US sold goods to Europe worth $370.2 billion, but bought $605.8 billion, generating a trade deficit of $235.6 billion. If we divide that deficit by the imports of $605.8 billion, we get 39% – the figure that appears in the White House tables.
🤝 According to Reuters, US President Donald Trump has stated that he would be willing to negotiate tariffs with foreign countries if they offered something extraordinary. But Trump’s senior trade adviser, Peter Navarro, told CNBC that the broad tariffs are “not a negotiation.”
⚔️ Countries around the world have threatened to retaliate against the sweeping tariffs announced by President Trump, which are seen as a major blow to global trade and economic cooperation. Leaders from Canada, China, the EU, and others have vowed to implement countermeasures if negotiations with the U.S. fail.
📉 The tariffs have already caused a global market meltdown, with stocks, the U.S. dollar, and oil prices all plunging. Major U.S. companies with overseas production, like Apple and Nike, have also seen their shares tumble.
💻 The seven major tech companies that make up the “Magnificent Seven” index collectively lost over $1 trillion in market capitalization on the day Trump’s tariff plan was unveiled. This lead the broader Nasdaq Composite to its worst single-day performance since 2020.
📉 Apple was hit the hardest, dropping over 9% as the personal tech giant faces concerns about its overseas production being impacted by the tariffs. Amazon also fell around 9%.
💾 Other tech giants like Nvidia, Microsoft, and Meta Platforms also saw significant declines of 5-9% as the risk-off sentiment swept through the market.
💬 White House officials have downplayed the market reaction, with the Treasury Secretary attributing it to poor performance by tech companies rather than the tariff policy.
💵 The U.S. dollar has sunk significantly, falling towards a 6-month low against the euro and yen, as traders weigh the fallout from Trump’s aggressive new tariff measures. Traders are now predicting 4 interest rate cuts from the Federal Reserve for the rest of 2025, reflecting concerns that the tariffs could trigger a global economic slowdown and stoke inflation. There are warnings of a potential “crisis of confidence” in the U.S. dollar, as the tariffs raise the risk of disorderly currency movements as capital flows shift.
📉 According to Lindsay Rosner, head of multi-asset fixed income at Goldman Sachs, Trump’s tariff plan might delay GDP and raise prices, perhaps leading to stagflation. However, we at ATFX humbly think that they could be wrong. To date, we have seen large companies announce that due to tariffs, they will invest and produce from the US. In the case of TSMC, they announced an investment of 100 billion dollars. These types of moves, high investment, mean greater future production in the US, increasing the supply of goods produced, which in turn, in the medium and long term, could lower prices, or at least neutralise tariffs.
📉 In Europe, the European Stoxx 600 fell 2.57% Thursday. Major retailers were among the poorest performances. Adidas lost 11.7%, JD Sports declined 7.9%, and Burberry dropped 8.8%. Maers, the shipping behemoth seen as a benchmark for global trade, fell 9.5%.
💶 The European Union has been struck with 20% levies, whereas the United Kingdom has been hit with only 10%, owing to its more balanced trading relationship with the United States. Just as we warned our readers would happen.
📉 The EU authorities foresee a base tariff of 20% on 290 billion euros in EU exports, which will result in sanctions worth 58 billion euros. A 25% tax on EU car exports will affect €66bn in goods exports and €26bn in metal exports, further compounding concerns.
🇫🇷 French President Emmanuel Macron has asked European firms to delay investments in the United States, as the government considers actions against the country’s digital companies.
⚔️ Geopolitics:
⚙️ Meanwhile, the German military has begun deploying its 45th Armored Brigade to Lithuania, near the border with Russia-allied Belarus, in what is Germany’s first permanent foreign troop deployment since World War II. This deployment represents a significant shift in German defense policy, as post-WWII Germany had previously limited foreign military assignments to temporary contributions to NATO operations. German officials have warned that Russia could launch an attack on NATO by 2029 or 2030, though Moscow rejects these claims. This permanent deployment marks a major escalation of Germany’s military presence abroad.
📉 Market View:
🛑 The day of America’s liberation arrived and unleashed a storm in the financial markets. There was no mercy. Even hours later, the screens are still dyed red. The Mini S&P 500 futures continue at lows, trading at 5,415 points. Meanwhile, Nasdaq 100 futures fell below 18,500 points in the last few hours, although they have recovered slightly to 18,625 points at the moment.
📉 The dollar index fell to 101.25 points, accumulating a loss of 2.8% since Wednesday. This decline has allowed the EUR/USD pair to exceed the 1.1050 level.
📉 US bond premiums have plummeted, reflecting the fact that a significant amount of capital has sought refuge in Treasury bonds in the face of market panic. Currently, the 2-year bond yield stands at 3.65%.
📉 In Europe, DAX futures have lost 22,000 points, falling to 21,840 points at the moment. Similarly, EuroStoxx 50 futures are at 5,025 points. There are still no signs of a possible upward rebound in European stock markets.
📉 The crude oil market is experiencing a severe fall, plummeting 8.50% since Wednesday, with a barrel of Brent reaching $69.15. This collapse reflects the first signs of fear of a slowdown in world trade.
📈 On the other hand, gold futures remain relatively stable in the $3,125 per ounce zone, showing calm in the midst of generalised chaos.
💎 Bitcoin, on the other hand, has managed to keep its prices stable. It seems to have anticipated on Wednesday the falls that affected the rest of the markets yesterday, discounting them in advance. As a result, it is now holding firm in the $83,000 zone.
