Thursday, April 3, 2025
Well, we’re officially “Liberated.” Blanket tariffs of +10% on every country that carries a trade surplus with the U.S., plus the overall trade deficit divided by an additional tariff rate based on each country’s export tally is how this opening salvo in a new global trade war has been calculated. Economists agree this is unlike any tariff policy in U.S. history.
In the immediate term, it’s sensible to detect a sort of shock paralysis as our trading partners — not to mention American businesses that export goods and services elsewhere — seek clarity. What do these rates mean for each country’s trade policy, and which would be the initial course of action. Doubtful it will be straight capitulation, although many high-paid market analysts still seem to have their fingers crossed.
Then again, we might not be so quick to assume counter-tariffs will be forthcoming in the days and weeks ahead. Perhaps they will, but it may be that first a pain threshold will have been realized ahead of upping the trade war. Careful strategy would likely be advised; any trading partner with the U.S. should have already at least mocked-up a scenario that brings us to where we are presently.
Ultimately, we were hopeful “Liberation Day” was going to end the period of uncertainty regarding global trade policy. Perhaps we’re a big step closer to that day, but there is plenty to sort out first — and we all may expect to feel the pinch. For sure, pre-market indexes are already smarting: the Dow is -1280 points, the S&P 500 -200 and the Nasdaq -835 points at this hour.
Trade Deficit Eases in February
The
U.S. Trade Deficit for February is out this morning, with -$122.7 billion still historically deep, but better than the -$123.4 billion expected. The previous month remains the all-time low deficit, -$130.7 billion, but it has been revised cooler by around $700 million from the initial print.
We’d only had a sub-$100 billion trade deficit for one month prior to 2025, where these levels have resided ever since. Both Goods and Services moderated in the month, while Exports grew almost +3%. Due to complexities regarding new tariff policy, it’s tough to say whether they will have any impact on overall deficit levels, though there would appear to be something of a unique opportunity.
Weekly Jobless Claims Depict Still-Healthy Labor Market
Initial Jobless Claims remain at muted levels historically, even with jobs cuts from federal government departments mounting into the tens of thousands over the past two months. A portion of those newly unemployed, however, are opting not to file jobless claims and instead are calling it a career. Headline +219K new jobless claims last week is the lowest print we’ve seen in more than a month and a half. Several weeks ago we hit +243K, but have come back down since.
Continuing Claims did top out over 1.9 million to +1.903 million — the first official read above this level since November of 2021. However, there have been a handful of longer-term claims first reported above 1.9 million, only to be revised beneath it the following week. The previous week’s +1.856 million originally cited gets revised to +1.847 million this morning.
What to Expect from Today’s Stock Market
March
ISM Services and
S&P final Services PMI figures will be released after the opening bell, expected to tick down slightly month over month but still above the 50-level which separates growth from retraction. We don’t expect this will amount to more than a drop in the bucket compared with trade tariff concerns, however.
In fact, Friday’s Jobs Report number hasn’t felt less potentially impactful since the Covid pandemic. Expectations are for 140K new jobs to have been filled in March, with a steady Unemployment Rate of +4.1%. The bigger question from this perch currently is: Will anyone care?
Questions or comments about this article and/or author? Click here>>
Image: Bigstock
Tariff Policies Send Pre-Market Futures Down -4%
Thursday, April 3, 2025
Well, we’re officially “Liberated.” Blanket tariffs of +10% on every country that carries a trade surplus with the U.S., plus the overall trade deficit divided by an additional tariff rate based on each country’s export tally is how this opening salvo in a new global trade war has been calculated. Economists agree this is unlike any tariff policy in U.S. history.
In the immediate term, it’s sensible to detect a sort of shock paralysis as our trading partners — not to mention American businesses that export goods and services elsewhere — seek clarity. What do these rates mean for each country’s trade policy, and which would be the initial course of action. Doubtful it will be straight capitulation, although many high-paid market analysts still seem to have their fingers crossed.
Then again, we might not be so quick to assume counter-tariffs will be forthcoming in the days and weeks ahead. Perhaps they will, but it may be that first a pain threshold will have been realized ahead of upping the trade war. Careful strategy would likely be advised; any trading partner with the U.S. should have already at least mocked-up a scenario that brings us to where we are presently.
Ultimately, we were hopeful “Liberation Day” was going to end the period of uncertainty regarding global trade policy. Perhaps we’re a big step closer to that day, but there is plenty to sort out first — and we all may expect to feel the pinch. For sure, pre-market indexes are already smarting: the Dow is -1280 points, the S&P 500 -200 and the Nasdaq -835 points at this hour.
Trade Deficit Eases in February
The U.S. Trade Deficit for February is out this morning, with -$122.7 billion still historically deep, but better than the -$123.4 billion expected. The previous month remains the all-time low deficit, -$130.7 billion, but it has been revised cooler by around $700 million from the initial print.
We’d only had a sub-$100 billion trade deficit for one month prior to 2025, where these levels have resided ever since. Both Goods and Services moderated in the month, while Exports grew almost +3%. Due to complexities regarding new tariff policy, it’s tough to say whether they will have any impact on overall deficit levels, though there would appear to be something of a unique opportunity.
Weekly Jobless Claims Depict Still-Healthy Labor Market
Initial Jobless Claims remain at muted levels historically, even with jobs cuts from federal government departments mounting into the tens of thousands over the past two months. A portion of those newly unemployed, however, are opting not to file jobless claims and instead are calling it a career. Headline +219K new jobless claims last week is the lowest print we’ve seen in more than a month and a half. Several weeks ago we hit +243K, but have come back down since.
Continuing Claims did top out over 1.9 million to +1.903 million — the first official read above this level since November of 2021. However, there have been a handful of longer-term claims first reported above 1.9 million, only to be revised beneath it the following week. The previous week’s +1.856 million originally cited gets revised to +1.847 million this morning.
What to Expect from Today’s Stock Market
March ISM Services and S&P final Services PMI figures will be released after the opening bell, expected to tick down slightly month over month but still above the 50-level which separates growth from retraction. We don’t expect this will amount to more than a drop in the bucket compared with trade tariff concerns, however.
In fact, Friday’s Jobs Report number hasn’t felt less potentially impactful since the Covid pandemic. Expectations are for 140K new jobs to have been filled in March, with a steady Unemployment Rate of +4.1%. The bigger question from this perch currently is: Will anyone care?
Questions or comments about this article and/or author? Click here>>