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📈 Markets Recover After Five-Week Sell-Off
🚀 SpaceX Files For IPO
🏭 Resilient Economic Activity
👷 Labor Demand Cooling
📊 Index Strength, Weak Breadth
🌍 President Trump Says Iran Conflict Nearing Completion
QUOTE OF THE WEEK:
“The easiest people to fire are the people you haven't hired yet, which again is why you see the hiring of recent college graduates heading down and the underemployment rate over 50%. The unemployment rate among college graduates is now the same or higher than non-college graduates for the first time in history.” - Andrew Yang, Noble Mobile founder and CEO
KEY US ECONOMIC EVENTS NEXT WEEK:
MARKET CLOSE:
CNBC EOD 4/4
WEEKLY MARKET WRAP:
Good Afternoon. Markets recovered this week after 5 week sell-off. As I mentioned last week, the tech stocks had come down from 28x PE to 21x. The war is still going on, and it’s still not clear what will happen over the next two weeks. Macro data is still decent, and no issues with earlings. If geopolitical risk subsides, markets for sure will rally from here.
Below are the key things to note this week:
This week’s data showed a softer hiring backdrop, but firmer realized activity. JOLTS and ADP pointed to weak labor demand, yet retail sales, ISM manufacturing, claims, and payrolls suggested the economy entered April with more resilience than the softer labor indicators implied.
JOLTS Job Openings: Job openings fell to 6.88 million in February from 7.24 million, while hires slipped to 4.85 million. The labor market continues to weaken through slower hiring, not broader layoffs.
ADP Employment: ADP showed private payrolls rose just 62,000 in March. Hiring remained selective, reinforcing the view that labor demand is cooling even if the labor market is not breaking.
Retail Sales: Retail sales rose 0.6% m/m, and core retail sales increased 0.5%. Consumer spending remained firm, suggesting demand held up better than the softer labor data alone would imply.
ISM Manufacturing PMI: ISM manufacturing rose to 52.7 from 52.4, extending the sector’s expansion. Manufacturing looked more resilient in terms of activity, though labor conditions inside the sector remained softer.
Unemployment Claims: Initial claims fell to 202,000 from 211,000. Layoffs remain contained, and the claims data still do not point to a meaningful deterioration in the labor market.
Non-Farm Payrolls: Payrolls rose 178,000 in March, well above expectations and a sharp rebound from February. The report suggested hiring was broader and stronger than earlier private and survey-based indicators indicated.
Unemployment Rate: The unemployment rate fell to 4.3% from 4.4%. But the decline was partly offset by a drop in labor force participation, making the improvement less clear-cut than the headline suggests.
Average Hourly Earnings: Average hourly earnings rose 0.2% m/m, below expectations. Wage growth continues to cool, which should help with inflation but also points to softer labor income momentum.
Takeaway: The week did not confirm a labor market reacceleration, but it also did not support a breakdown narrative. The cleaner read is that the economy remained resilient into April, while the labor market stayed in a slower-hiring, lower-wage-growth phase.For the week:
The S&P 500 is up 3.36%, the Nasdaq is up 2.20%, and the Dow 30 is up 1.18%.
CNN's Fear & Greed Index now stands at 19 (Extreme Fear) out of 100, up 9 points from last week. Details here
The top five trending stocks on Reddit are SPY, DTE Energy, NVIDIA, Tesla, and VOO. Read More
Liquidity:
Banking Reserves + ON RRP: Banking reserves remain at approximately $3 trillion. ON RRP balance remains immaterial.
Standing Repo Operations: The New York Fed’s standing repo operation (primarily reflecting SRF take-up) as of April 2nd is $0.75bn.
Here is a summary of this week’s key economic releases:
Target Rate Probabilities for April 29th FOMC Meeting:
CME FedWatch
CURATED INSIGHTS & ANALYSIS:
Index Strength, Weak Breadth:
Ben Carlson’s latest piece is a good reminder that strong index performance can hide real damage underneath the surface. The broader market may still look healthy, but a meaningful share of stocks remain in correction or bear-market territory, underscoring how narrow leadership has become.The more important takeaway is that bottom fishing is not a strategy by itself. A stock being down sharply doesn’t make it cheap, and mean reversion only works when valuation, business quality, and durability still hold. The cleaner way to view these drawdowns is as a watchlist for further work, not an automatic buy list.
Apollo’s Outlook:
Apollo’s April outlook for public and private markets pushes back on the recession-heavy market narrative. The broader message is that growth still has support from AI capex, industrial policy, and fiscal stimulus, while the bigger market risk is not an oil shock or an imminent downturn, but a higher long-rate regime driven by heavy Treasury supply, rising debt, and a higher term premium.Oil is a headwind, not a macro break: Apollo argues a sustained $100 oil scenario would lift headline inflation, but the drag on growth would still be modest by historical standards.
Growth support remains intact: AI investment, reindustrialization, and fiscal policy continue to provide a base for activity, even as parts of the consumer backdrop look weaker.
Rates are the real pressure point: Credit is improving, which weakens the hard-landing case, but long-end yields may stay elevated as supply and term premium rise.
Bottom line: The report is less a recession call than a higher-growth, higher-inflation, higher-rate framework. The key implication is that markets may be underestimating how difficult it will be for long-term yields to fall materially.
FRONT PAGES:
Treasury Flags Private Credit Risks: The U.S. Treasury will meet insurance regulators through early May as concerns over the $2 trillion private credit market broaden to liquidity, leverage, ratings consistency, and offshore reinsurance, amid tighter bank lending and rising private fund withdrawal limits. Read
SpaceX Files for IPO: SpaceX confidentially filed with the SEC, putting it on track for a potential June 2026 listing that could become the biggest-ever IPO and position it ahead of expected public-market moves by OpenAI and Anthropic. Read
Powell Says Fed Can Wait: Powell said the Fed can stay in wait-and-see mode as the impact of the Iran war on inflation remains unclear. He flagged downside labor-market risk against upside inflation risk, said expectations remain anchored, and noted rates were left at 3.50%-3.75%. Read
Trump Says Iran Conflict Nearing Completion: Trump said U.S. operations in Iran were “nearing completion,” and that key military objectives had largely been achieved, aiming to reassure markets and the public. But the address offered no clear end-state or timeline, leaving policy uncertainty intact. Read
Blue Owl Caps Redemptions: Blue Owl limited withdrawals from two funds after historic Q1 redemption requests as AI-related fears hit software credit. Investors sought to redeem 40.7% of its $6.2 billion tech-focused fund and 21.9% of its $36 billion credit fund; the firm plans to meet only 5% of requests. Read
EARNINGS UPDATE:
Nike Beat: Revenue was $11.3B, flat reported and down 3% currency-neutral. Wholesale rose to $6.5B, up 5% reported and 1% currency-neutral, while NIKE Direct fell to $4.5B, down 4% reported and 7% currency-neutral. Gross margin declined 130 bps to 40.2% due to higher North America tariffs. Diluted EPS was $0.35, net income $520M, with cash and short-term investments at $8.1B and dividends of about $609M, up 3%.
EARNINGS PREVIEW:
Date | Symbol | Name | Time |
7-Apr | LEVI | Levi Strauss & Company Cl A | After Close |
8-Apr | DAL | Delta Air Lines Inc | Before Open |
13-Apr | FAST | Fastenal Company | Before Open |
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This newsletter's content is for informational and educational purposes only and should not be considered trading or investment recommendations. All the opinions in this newsletter are personal and do not belong to any organization.
