A measure of consumer confidence fell in March to the lowest level in four years on concerns about higher prices and economic outlook amid the Trump Administration’s escalating tariffs. A measure of expectations for the next six months dropped to the lowest in 12 years. However, a gauge of present conditions was essentially unchanged.
The vast majority of sentiment surveys have been dismal of late as households fear a resurgence in inflation, the result of the President’s policies
While the sentiment readings and other “soft data” have been decidedly downbeat in recent weeks, the “hard data” in government statistics suggest the economy is on solid footing.
Writing the obvious, uncertainty is great. What will be the impact? Will the unexpected continue to occur? Has the economy and the geopolitical environment changed so radically that current benchmarks are no longer valid? Or perhaps worse, has the data been corrupted by the political environment?
Equites were mixed on the confidence data perhaps on the belief the averages have run to far, too fast amid risks stemming form a trade war to an economic slowdown and sticky inflation.
Treasuries were relatively unchanged.
What will happen today?
Last night the foreign markets were mixed. London was up 0.22%, Paris down 0.51% and Frankfurt up 0.55%. China was down 0.04%, Japan up 0.65% and Hang Seng up 0.60%.
Futures are flat. There are concerns that liquidity is declining in all markets.
Liquidity or the ease of buying or selling a security without affecting its price has been dwindling for years due to factors such as tighter regulations, the rise of automatic trading and the lack of market stabilizing mechanisms.
Now there is an additional variable according to Bloomberg—tariffs. Bloomberg opines that tariff concerns exacerbate fears in the largest stocks, “feeling like you are getting over run every time the algo trades kick in when volatility spikes.” This is all amplified by the fact that foreign ownership of US securities is at record levels. How will this unfold?
The 10-year is off 7/32 to yield 4.35%.
