Pakistan’s military says it shot down an Indian spy drone in the Kashmir region, soon after the country’s defense chief warned that intelligence shows an Indian army incursion is ‘imminent’.

The unmanned drone reportedly breached the Line of Control (LOC) in Kashmir, Pakistani state-run media said, and it was subsequently shot down amid the air space incursion. Pakistani defense officials described to The Associated Press that the drone flew hundreds of feet into Pakistani-administered Kashmir.

Defense Minister Khawaja Asif the day prior confirmed the nation’s military is currently on high alert and he had “reinforced our forces” – after multiple days of sporadic exchanges of gunfire along unspecified border posts.

“In that situation, some strategic decisions have to be taken, so those decisions have been taken,” Asif told Reuters, also ominously describing that Islamabad would only consider using its nuclear arsenal in response to “a direct threat to our existence.” 

There’s as yet been no noticeable incursion, and it remains unclear what evidence for this forecast Pakistan’s military and intelligence services might have.

Last Tuesday’s deadly militant attack on tourists in Kashmir, which saw 26 Indian tourists get executed after the gunmen sought to identify Hindus among the group, resulted in the Indian government promptly accusing Pakistan of harboring the Islamist terrorists which committed the atrocity, which Islamabad angrily rejected.

The nuclear-armed neighbors have already fought two historic wars over the Kashmir region, and fears are rising that another one may soon be on the horizon – also after both sides have sent military reinforcements to the respective regions they administer. Amid a massive manhunt, India identified two detained suspected militants as Pakistani.

The New York Times described Saturday that “Pakistani solders fired at an Indian position first and India responded in kind, according to local news reports, which said that “the exchange was brief and that there were no casualties.” Precise locations of these live fire incidents have not been disclosed.

Missile and nuclear saber-rattling has meanwhile ensued:

India’s navy test-fired missiles on Sunday, showcasing its ability to carry out “long-range, precision offensive” strikes, as tensions with Pakistan rise after last week’s terrorist attack in Indian-administered Kashmir that killed 26 civilians.

“Indian Navy ships undertook successful multiple anti-ship firings to re-validate and demonstrate readiness of platforms, systems, and crew for long-range precision offensive strike,” the navy posted on X, as the prime minister, Narendra Modi, promised a “harsh response” to the attack at a tourist site, the deadliest against civilians in Kashmir in 25 years.

As for the other side, a Pakistani minister, Hanif Abbasi (though he’s not in defense or security) days ago warned that Pakistan’s nuclear arsenal of more than 130 missiles was “not kept as models” and was aimed “only for India … these ballistic missiles, all of them are targeted at you” – The Guardian noted.

The United Nations has urged restraint, and Pakistan has called for an independent investigation into the Kashmir terror attack, which it says it had nothing to do with. It has also called on Russia and China to mediate and assist with a potential investigation.

If gunfire continues to be exchanged between the two militaries, also amid reports that Pakistani visa holders are being promptly booted from the country amid the diplomatic crisis – clashes could accelerate toward open war. 

India’s Chief Minister of Jammu and Kashmir Omar Abdullah has meanwhile said there must be a “decisive fight against terrorism and its origin.” Indian officials have continued to heap accusations that ultimately Islamabad either supports these groups or at least turns a blind eye.

Pakistan ACCUSES India of running terror network

Armed Forces spox claims NO EVIDENCE to suggest Pakistan’s role in Pahalgam attack pic.twitter.com/xwdPOMpWUo

— RT (@RT_com) April 29, 2025

More observations via Rabobank…

* * *

Pakistan just warned of imminent India military action against it in response to a recent terror attack in Kashmir, to which China stated: “As Pakistan’s ironclad friend and all-weather strategic cooperative partner, China fully understands Pakistan’s legitimate security concerns and supports Pakistan in safeguarding its sovereignty and security interests,” with rumours it and Turkey are sending Pakistan weapons. 

India will surely be looking for mirroring statements and actions from those who want more trade with it. The UK and the EU aren’t going to provide them; BRICS is a joke given what C just said about I, via P; and that only leaves the US.

Update (1215ET):

On Tuesday morning, U.S. Commerce Secretary Howard Lutnick provided clarity on the highly anticipated auto tariff relief, confirming it will apply to all U.S.-built vehicles.

Lutnick said tariffs will apply to those produced by foreign automakers with plants in the US. He added that the relief would be phased in over three years, giving manufacturers time to shift their supply chains back to the U.S. 

Commerce Secretary Howard Lutnick confirms that tariff relief is coming to the auto sector, saying that tariff relief will be available to all US-built vehicles and cars that are finished in the US. pic.twitter.com/mFz5LbmXPS

— Yahoo Finance (@YahooFinance) April 29, 2025

Headlines:

• LUTNICK: TARIFF RELIEF AVAILABLE TO ALL U.S.-BUILT VEHICLES

• LUTNICK: TARIFF WILL APPLY TO FOREIGN CAR MAKERS BUILDING CARS IN THE U.S

• LUTNICK:  TARIFF RELIEF TO BE PHASED IN OVER THREE YEARS TO ALLOW AUTOMAKERS TO PRODUCE SUPPLY CHAINS IN THE U.S.

• LUTNICK: ALL CARS THAT ARE FINISHED IN U.S. THAT HAVE 85% DOMESTIC CONTENT WILL HAVE NO TARIFFS

• LUTNICK: MANUFACTURERS OF U.S.-BUILT AUTOS WILL GET 15% OFFSET FOR VALUE OF THOSE VEHICLES AGAINST PARTS IMPORTS

• LUTNICK: AUTO MANUFACTURERS WILL PICK THE HIGHEST TARIFF THAT COMES WITH THEIR GOODS AND THEY WILL ONLY PAY ONE

• LUTNICK: AUTO MAKERS WILL PAY EITHER STEEL OR AUTO TARIFF, WHICHEVER IS HIGHER

• LUTNICK: TWO YEARS WAS AGREED TIME TO GIVE MANUFACTURERS SUFFICIENT TIME TO BUILD UP SUPPLY CHAIN

• LUTNICK: THERE IS NO THIRD YEAR OF RELIEF

*   *   * 

Global stocks were steady overnight, with U.S. equity futures marginally higher, as sentiment improved following reports that President Trump plans to ease tariffs on foreign auto parts used in U.S.-made vehicles. The news comes as Trump marks his first 100 days in office, ahead of a rally in Michigan scheduled for this evening. 

The Wall Street Journal, citing multiple sources familiar with the plans, reported that the proposed tariff rollback would offer major relief to automakers producing vehicles within the U.S. borders. These companies have been battered by the trade war due to their deeply entrenched supply chains spanning Asia and Europe. 

Sources added more color to what the tariff reprieve looks like: 

The decision will mean that automakers paying Trump’s automotive tariffs won’t also be charged for other duties, such as those on steel and aluminum, according to people familiar with the policy.

The move would be retroactive, the people said, meaning that automakers could be reimbursed for such tariffs already paid. The 25% tariff on finished foreign-made cars went into effect early this month.

The administration will also modify its tariffs on foreign auto parts—slated to be 25% and effective May 3—allowing automakers to be reimbursed for those tariffs up to an amount equal to 3.75% of the value of a U.S.-made car for one year. The reimbursement would fall to 2.5% of the car’s value in a second year, and then be phased out altogether.

Commerce Secretary Howard Lutnick told WSJ in a statement about Trump’s move to ease the pain for automakers: 

President Trump is building an important partnership with both the domestic automakers and our great American workers.

This deal will be a major victory for the president’s trade policy by rewarding companies who are already manufacturing domestically, while providing a runway to manufacturers who have expressed their commitment in investing in America and expanding domestic manufacturing.

In a separate statement to Bloomberg, Lutnick said:

This deal is a major victory for the president’s trade policy by rewarding companies who manufacture domestically while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing.

Trump’s trade war is an urgent move to shift critical supply chains out of China, either by relocating them to a friendlier shore or reshoring them. 

Ford CEO Jim Farley commented on the WSJ report:

Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers.

We will continue to work closely with the administration in support of the president’s vision for a healthy and growing auto industry in America. Ford sees policies that encourage exports and ensure affordable supply chains to promote more domestic growth as essential. 

This news comes ahead of Trump’s trip to Michigan to celebrate the first 100 days of his second term in office. The president will speak at Macomb Community College in Warren, about 20 miles north of Detroit, around 6:00 p.m. local time.

Ahead of Trump’s first 100 days, crazed Michigan Democratic Rep. Shri Thanedar filed articles of impeachment against the president, stating:

I have introduced articles of impeachment against President Trump. When Trump ignores the Constitution, Congress, and the courts, he is not ‘fighting for America.’ He is tearing it down and endangering our democracy.

Trump’s pivot on auto tariffs represents the latest development in his ever-changing trade strategy to friend-shore or re-shore critical supply chains.

Authored by Naveen Athrappully via The Epoch Times,

The homeownership rate in the United States declined to 65.1 percent in the first quarter of this year, 0.6 percentage points lower than in the previous quarter, the U.S. Census Bureau said in a statement on April 28.

“This quarter’s homeownership rate is the lowest since Q4 of 2019,” real estate listings website Realtor said in an April 28 report. 

“The homeownership rate spiked in early 2020 before settling in the mid 65% – 66% range through the pandemic and the years following.”

Realtor attributed the decline in homeownership rate in the first quarter to a lack of affordable housing.

“Though inventory levels continue to rise on an annual basis, the number of homes for sale is still below pre-pandemic levels, which has kept upward pressure on home prices and limited affordable options for many households,” it said.

The homeowner vacancy rate, which is the proportion of properties owned that are vacant and for sale, was 1.1 percent higher than in the first quarter of 2024 but remained the same in the fourth quarter of 2024. This was higher in major cities compared to the suburbs. The vacancy rate was the lowest in the Northwest and highest in the West.

According to Realtor, vacancy rates had remained below the 1 percent level from the first quarter of 2022 to the third quarter of 2024, which emphasized “the lack of for-sale inventory,” it said.

“Though recent inventory gains have kept vacancy at a recent high, there are still far fewer vacant homes than was typical in the years pre-pandemic, suggesting that inventory still has some ground to cover,” it said.

Overall, roughly 89.5 percent of all housing units in the United States were occupied in the first quarter of this year, with the properties occupied by either homeowners or renters, the bureau said.

In a Feb. 10 report, JP Morgan said the lower vacancy rates suggest potential supply constraints in the market.

“Vacancies indicate that there are enough homes available, but these may not be the right type, in the ideal location, or at an affordable price point,” it said, adding that the housing market demand was “seriously suppressed” by elevated interest rates.

The weekly average rate on a 30-year fixed-rate mortgage has remained above 6.5 percent for the entire first quarter of this year, according to data from Freddie Mac.

The elevated rates make mortgage payments more expensive, thus deterring prospective buyers seeking affordable homes.

John Sim, head of securitized products research at JP Morgan, said the housing market situation “is not going to change until we get mortgage rates back down toward 5 percent, or even lower.”

“And we aren’t forecasting mortgage rates to breach 6 percent in 2025—they should ease only slightly to 6.7 percent by the year-end,” Sim said in a statement.

Easing Housing Conditions

There are signs that housing costs are cooling down as home prices fall. In the four weeks ending April 20, the median sales price of homes fell year over year in 11 out of the 50 populous metros in the United States, real estate brokerage Redfin said in an April 24 statement.

“Home prices are falling in many major metros—and price growth is decelerating nationally—because many house hunters are backing off, but the number of homes for sale is holding up,” the brokerage said.

“Home tours are slowing, mortgage-purchase applications are falling, and Redfin agents in many parts of the country report that would-be buyers are ultra-cautious amid high housing costs and widespread economic uncertainty.”

Chen Zhao, Redfin’s economic research lead, advised sellers to price their homes “fairly.” Sellers may have to lower their asking prices in order to “sell quickly and avoid giving concessions,” he added.

As for mortgage rates, Sam Khater, chief economist at Freddie Mac, highlighted in an April 24 statement that the 30-year fixed-rate mortgage rate has fluctuated by less than 20 basis points over the past couple of months.

This stability bodes “well for buyers and sellers alike,” he said.

Meanwhile, a bipartisan group of lawmakers reintroduced the Rural Housing Service Reform Act this month, aimed at strengthening the supply of affordable housing in rural communities and small towns, according to an April 3 statement from the office of Sen. Tina Smith (D-Minn.).

The Act proposes several key measures, including requiring the Department of Agriculture to expedite the loan approval process and updating rules for home repair loan programs to make it less burdensome to obtain smaller loans.

“Improving homeownership opportunities, particularly in rural areas, is critical for the well-being of South Dakota families,” Sen. Mike Rounds (R-S.D.), one of the lawmakers who introduced the bill, said in a statement.

The Act “would streamline federal programs and remove barriers to homeownership, making this dream a reality for more South Dakotans. It would also preserve existing affordable housing and rental assistance in rural areas,” he said.

Ukraine’s President Volodymyr Zelensky has blasted President Putin’s unilaterally declared three-day ceasefire set for May 8-10, which correspondents with Russia’s Victory Day celebrations, as an “attempt at manipulation.”

“Now there’s a new attempt at manipulation: for some reason, everyone has to wait until May 8,” Zelensky said in his daily address Monday evening. This will mark the 80th anniversary for Moscow’s World War 2 commemorations, a major national civic holiday.

Ukraine has instead offered an immediate truce with Russia for “at least 30 days.” Ukrainian Foreign Minister Andrii Sybiha previously questioned, “If Russia truly wants peace, it must cease fire immediately. Why wait until May 8?“

Moscow has rejected any premature longer term truce ahead of lasting settlement and territorial concessions from the Ukrainian side, fearing that it would just be used to regroup and rearm along the front lines.

Russia has further rejected this new call for a 30-day truce instead of the three day ceasefire. “It’s difficult to agree to such a long-term truce without answers to the questions raised by Putin,” Kremlin spokesman Dmitry Peskov told reporters.

“We haven’t heard the Kyiv regime’s reaction, and it’s unclear whether they plan to join the truce,” Peskov said. “Nevertheless, we hope the Russian president’s peace initiative will be appreciated,” he added. “The first step is to start the negotiation process — everything else is secondary.”

Kiev did appear to observe the prior Easter truce, though each side accused the other of some violations. But it set a precedent which Moscow is hoping to follow on with in pushing the V-Day ceasefire; however, skeptics have said this is really to ensure no disruptions happen at national public commemoration events (such as inbound drones in the Moscow region).

Trump admin officials have called this week “critical” for determining whether lasting peace in Ukraine can be forged:

Rubio said that the coming week will be “very critical” for the White House as it makes a “determination about whether this is an endeavor that we want to continue to be involved in.”

“There are reasons to be optimistic, but there are reasons to be realistic,” Rubio said, adding: “We’re close, but we’re not close enough.”

“Throughout this process, it’s about determining, do both sides really want peace and how close are they or how far apart they are after 90 days of effort here … that’s what we’re trying to determine this week,” Rubio said of negotiations.

But it’s unclear what this ultimatum of sorts (given to both sides?) really means. Will the US stop arming Ukraine if no peace deal is reached? Will more sanctions simply be piled onto Moscow?

Trump is increasingly frustrated with leaders of both Russia and Ukraine: White House.

Trump is increasingly frustrated with leaders of both Russia and Ukraine — White House.

🇺🇦 Meanwhile, Ukraine: “We agree to an unconditional ceasefire. Every day. Constantly. We’re literally begging: just stop the fire. We are ready. No conditions — just STOP killing us.”

🤡… pic.twitter.com/572n3UCezc

— Maria Drutska 🇺🇦 (@maria_drutska) April 28, 2025

President Trump has warned the Russians that his patience will soon run thin, amid accusations from hawks that Moscow is simply stalling for the sake of battlefield gains. Putin this month declared the full liberation of Kursk region, leaving Zelensky with no cards to play at all. Trump himself has acknowledged that Zelensky has no real leverage at this point.

Novo Nordisk is teaming up with major telehealth companies to sell its blockbuster weight-loss drug Wegovy directly to U.S. consumers at a steep discount through its new direct-to-consumer pharmacy platform. For many, the monthly cost of Wegovy will now be more affordable than the average monthly payment for a new vehicle.

Bloomberg reported that NovoCare will begin offering Wegovy through telehealth firms Hims & Hers Health, LifeMD, and Ro. The weight-loss drug will be offered as subscription models on Hims and Ro. Hims will sell Wegovy for $599 monthly, including a membership offering clinical and nutritional support. Ro will charge $499 monthly for Wegovy, plus a $145 membership fee after the first month. Both of these monthly prices are being offered at more than 50% of the drug’s retail price in the U.S. market. 

“The strategy comes as rival Eli Lilly & Co. has teamed up with telehealth firms like Ro to distribute lower-cost vials of its own obesity medication, Zepbound. Lilly doesn’t have a similar partnership with Hims, which sells Zepbound independently at a premium compared to Lilly’s discounted offering,” Bloomberg noted. 

We noted in early March that Novo was preparing for a direct-to-consumer launch to take on Lilly’s Zepbound.

Andrew Dudum, CEO and founder of Hims, said Novo’s new partnership is “delivering the future of healthcare” by offering Americans affordable, breakthrough medicine that improves long-term health outcomes.

“Beyond this initial collaboration, the companies are developing a roadmap that combines Novo Nordisk’s innovative medications with Hims’ ability to deliver access to quality care at scale, with the goal of improving long-term outcomes for more people living with chronic disease, and doing that more affordably,” said Dave Moore, Novo’s executive vice president for U.S. operations. 

Last year, elevated demand for Wegovy and Zepbound led telehealth companies — including Hims and Ro — to sell compounded versions of these wonder drugs at steep discounts. 

Moore told Bloomberg that more affordable pricing and increased partnerships are a “change” for Wegovy and that “this is different than where we have been in the last couple of years.” 

In markets, shares of Hims in New York surged as much as 30% in premarket trading. On the year, shares are up nearly 18% as of Monday’s close. 

The short interest in Hims recently touched 34.33% of the float, or about 61 million shares short. 

The US merchandise-trade deficit unexpectedly widened in March to a record as companies continued importing goods to get ahead of tariffs.

The shortfall in goods trade grew 9.6% from a month earlier to $162 billion, Commerce Department data showed Tuesday.

Imports rose 5% to $342.7 billion, led by consumer goods, while exports increased 1.2% as firms scrambled to get ahead of President Trump’s ‘Liberation Day’ tariffs…

Imports of consumer goods surged 27.5%, while inbound shipments of motor vehicles and capital goods also increased.

Because this is the ‘advance’ data release, there is no data for individual nation trade balances or how gold imports have shifted. Remember, gold imports had been soaring through February…

…and blowing up economists’ models of GDP growth.

What we do know is that gold inventories at COMEX have been falling in March, suggesting a slowdown in imports… which will juice GDP forecasts (further confounding all the PhDs)

Finally, we note that Tuesday’s Commerce Department report also showed stockpiles at wholesalers increased 0.5%. Retail inventories fell 0.1% last month, reflecting a decline at car dealers.

Authored by Jill McLaughlin via The Epoch Times (emphasis ours),

California Gov. Gavin Newsom announced on April 23 that California had the fourth-largest economy in the world last year, overtaking Japan.

According to Newsom’s spokeswoman, Tara Gallegos, the governor used preliminary estimates of nominal gross domestic product (GDP) for 2024, issued by the U.S. Bureau of Economic Analysis (BEA).

Nominal GDP measures the value of goods and services for a state or country using current market prices and is not adjusted for inflation. In contrast, real GDP data is adjusted for inflation.

In addition to BEA data, Newsom also cited data released on April 22 by the International Monetary Fund (IMF), ranking each country according to its GDP.

California’s GDP for 2024 was valued at $4.1 trillion by the BEA. According to the IMF, Japan’s GDP was $4.03 trillion in 2024.

In an April 23 statement, Newsom said California’s economy ranked fourth-largest internationally, behind the United States as a whole ($29.2 trillion), China ($18.7 trillion), and Germany ($4.7 trillion).

Newsom said that the state’s 6 percent economic growth in 2024 was a “faster rate than the world’s top three economies.”

The governor touted the strength of the state’s agriculture, high-tech, and manufacturing sectors.

“California isn’t just keeping pace with the world—we’re setting the pace,” Newsom said in a statement. “Our economy is thriving because we invest in people, prioritize sustainability, and believe in the power of innovation.”

University of Southern California professor of business management Michael Mische, however, said California’s ranking has more to do with how other economies did last year.

“California’s number four position has more to do with the poorly performing … economies of Japan and Germany than it does with any in-state specific initiatives,” Mische told The Epoch Times.

California’s economy grew by 13.3 percent from 2019 to 2024, while Japan’s economy saw only a 0.9 percent increase and Germany’s was only 0.3 percent, Mische said.

“So, Japan and Germany grew at less than 1% for the 2019 to 2024 period in real GDP terms,” he said.

Japan has suffered from a prolonged state of decline, while Germany is enduring high labor and energy costs, he added.

Marshall Toplansky, an associate professor and faculty fellow in innovation at Chapman University’s College of Business and Economics, noted that tariffs could slow California’s economy.

“The interesting question here is whether the impact of tariffs will change this,“ Toplansky told The Epoch Times. ”I think we will be feeling a slowdown in trade if the tariffs continue at high levels.”

The issue is how high the tariffs will be and how long they will last, he added.

“The ports of Los Angeles and Long Beach will very likely see a drop in volume, and it is not clear to what extent they will hurt overall GDP for the state,” Toplansky said.

Newsom filed a lawsuit on April 16 in federal court challenging President Donald Trump’s tariffs, claiming they will hurt states, consumers, and businesses.

US equity futures were unchanged, erasing a modest gain and loss earlier, after General Motors pulled earnings guidance for 2025 and put share buybacks on hold until it has more clarity on the impact of US tariffs. As of 8:15am, S&P futures were flat, while Nasdaq futures were down 0.2% as TSLA rose +1.0% pre-mkt, followed by MSFT +0.5% and AMZN +0.5%. GM dropped in premarket trading, reversing an earlier gain, as it said it would suspend $4 billion of share repurchases. Bond yields and USD are higher (2-, 5-, 10-yr yields are 1.6bp, 2.9bp, 2.7bp higher). Commodities are mixed with WTI futures dropping 1.7%, adding to sharp losses seen Monday, Base Metals higher, and Precious Metals mixed. WSJ repeated a report from last week that Trump may ease his auto tariffs today; Elsewhere, Scott Bessent set July 4 as the goal to pass Trump’s tax cut package; he will announce the debt-ceiling X-date this week or next. Today, the key macro focus will be JOLTS Job Openings and Conf. Board Consumer Confidence.

In premarket trading, Magnificent Seven stocks are mixed as futures whipsaw )Amazon +0.2%, Alphabet +0.2%, Microsoft +0.1%, Apple +0.1%, Tesla -0.1%, Meta -0.1%, Nvidia -0.7%). General Motors (GM) shares fall 2.4% premarket after the automaker withdrew 2025 earnings guidance and paused $4 billion in share repurchases until it has more clarity on tariff impacts. Hims & Hers Health Inc. (HIMS) shares soared as much as 46% as it’s among companies Novo Nordisk A/S is partnering with to offer its popular weight-loss drug Wegovy to more US patients at a reduced price. Here are some other notable premarket movers:

• Crown Holdings (CCK) shares rise 3.3% after the beverage can maker reported adjusted earnings per share for the first quarter that beat the average analyst estimate. Analysts note strong volumes in Europe and Brazil
• Honeywell International Inc. (HON) shares gain 4.7% after the company raised its full-year guidance for earnings per share.
• PayPal (PYPL) shares are down 4.1% in premarket trading after the company reported fewer payment transactions in the first quarter than analysts expected.
• Okta (OKTA) shares rise 3.8% after S&P Dow Jones Indices announced that the stock will replace Berry Global in the S&P MidCap 400 before trading opens May 1.
• Regeneron (REGN) shares fall 7.5% after the drugmaker reported profit and sales for the first quarter that fell short of expectations.
• Ultra Clean (UCTT) shares are down 10% after the semiconductor manufacturing company reported first-quarter results that missed expectations and gave an outlook that is below the analyst consensus.
• UPS (UPS) shares are up 2% after the company reported adjusted earnings per share in the first quarter above what analysts expected
• Waste Management (WM) shares fall 1.7% after the firm’s first-quarter update missed revenue expectations and free cash flow dropped, with analysts saying that investors could have been hoping for more in order to support the stock’s year-to-date rally
• Wolfspeed (WOLF) shares are up 10% as the chipmaker is set for its sixth session of straight gains to match February’s winning streak

As Bloomberg notes, after weeks of intense volatility, markets now seem to be in a holding pattern. Gold is consolidating after hitting record highs, the DXY dollar index remains below its key 100 level, and oil is drifting lower. For investors, it’s difficult to find consensus, with risk management, confidence, and the guiding narrative on US exceptionalism upended by tariffs.

“With the uncertainty created by the tariffs we need to start pricing at least a probability of a US recession,” Johanna Kyrklund, chief investment officer at Schroders Plc, told Bloomberg TV. “As we analyze each company stock-by-stock, we’re looking for that risk to growth.”

Tariff sentiment continues to drive price action, with investors weighing plans by the Trump administration to ease the impact of auto tariffs by lifting some levies on foreign parts for cars and trucks made inside the US. However, it doesn’t look like a trade resolution is coming anytime soon. China’s top diplomat warned countries against caving in to US tariff threats, and Trump’s tactics are only serving to make China’s Xi Jinping more popular. At home, Treasury Secretary Bessent set a July 4 goal to pass a multi-trillion dollar tax cut package to appease voters getting fed up of Trump’s handling of the economy.

Still, with just over a third of S&P 500 companies reporting quarterly results, of those, 75% have beat estimates, according to data compiled by Bloomberg. S&P 500-listed companies worth $20 trillion are set to deliver results this week in one of the heaviest for 2025 earnings seasons. But the next few days are key: companies worth $20 trillion are set to deliver results this week in one of the heaviest for 2025 earnings seasons.  

Beyond the plethora of earnings, investors will be tracking data for clues on economic resilience in the face of tariffs. Prospects for Federal Reserve interest-rate cuts will be guided by Friday’s US non-farm payrolls figures. Sentiment earlier was boosted by signs of easing trade tensions after a White House official said imported automobiles would be given a reprieve from separate tariffs on aluminum and steel. 

In Canada, the Liberal Party is projected to win a fourth consecutive election, giving a mandate to former central banker Mark Carney.

European stocks rise 0.4%, with risk sentiment improving after the US said imported autos would be given a reprieve from separate tariffs on aluminum and steel. Miners, travel and banks are the strongest-performing European sectors, while the IBEX lags peers, dropping 0.5%, as Spain deals with the fallout of a massive blackout. In earnings, Deutsche Bank shares rise after its trading unit hit a record. HSBC climbs after announcing a fresh share buyback. BP shares fall after the oil major cut its buyback as profit missed forecasts. Here are some of the biggest movers on Tuesday:

• Rheinmetall shares rise as much as 7.3% after smashing expectations across the board with analysts praising a blowout quarter.
• Deutsche Bank shares gain as much as 4.6% after the lender posted a strong set of results, led by its trading unit hitting a record in the first quarter amid high market volatility.
• Neste shares gain as much as 13% after the Finnish refiner posted an increase in margins within its renewable product unit in the first quarter results.
• HelloFresh shares jump as much as 12% after the meal-kit company reported first-quarter adjusted Ebitda that beat estimates by roughly 30%, a sign that the firm is hastening its pivot to profitability as it cuts fulfillment and marketing expenses.
• Amundi shares slide as much as 2.4% after the investment manager’s first-quarter earnings showed a mixed performance that could weigh on consensus estimates, according to analysts.
• Porsche shares fall as much as 7.6%, their steepest drop since early February, after the luxury carmaker issued another profit warning.
• Deutsche Boerse shares fall as much as 5.7% after the German stock-exchange operator reported earnings for the first quarter that missed the average analyst estimate.
• Lufthansa shares fall as much as 2.9%. Results for the first quarter are largely in line and the carrier expects strong demand during the second quarter, though analysts note that weakening demand on the North Atlantic presents warning signs ahead of the peak summer season.
• Volvo Cars shares fall as much as 11% to a record low after the Swedish automaker posted first-quarter results that missed estimates and withdrew guidance for this year and next due to uncertainty around US tariffs.
• Elekta shares drop as much as 6.2% after an unidentified holder offered up to 15m shares via Goldman Sachs at a discount of 5.5% vs. Monday’s close, according to terms seen by Bloomberg.
• Nordic Semi shares slide as much as 9.4% after the chipmaker forecast 2Q sales below consensus estimates, citing increased risks from trade tensions and tariffs.

Asian equities advanced, rising to the highest level this month, on a rally in some Chinese technology shares and a sentiment boost from further signs of the US dialing down its trade rhetoric. The MSCI Asia Pacific Index gained as much as 0.7% Tuesday. TSMC and Meituan provided the biggest boost to the gauge, while India’s Reliance Industries extended its rally triggered by better-than-expected earnings. Benchmarks advanced in Hong Kong, Taiwan, India and South Korea. Japanese markets were closed for a holiday. Asian markets have largely recovered from the hit sparked by President Donald Trump’s reciprocal tariff announcements on April 2 amid hopes for trade deals. In the latest positive sign, Trump is on track to ease the impact of his auto tariffs, with changes sought by the industry that would lift some levies on foreign parts made inside the US.

• Australia: S&P/ASX 200 +0.92%, extending its winning streak to a 4th straight session as investors brushed off global trade uncertainties. Domestically, expectations are growing that the RBA will deliver another 25-bps cut in May, amid rising economic uncertainty and escalating global trade concerns. Investors are now awaiting Australian inflation data, due Wednesday, for further insight into the RBA’s next move.
• Taiwan: TAIEX +1%, was once again the best performing market in the region as sentiment continues to improve following recent rally in the US. TSMC 2330 TT +0.6% led the way as it closed above TWD900 for the first time since the tariff selloff in the first week of April. Small/mid-caps continued to outperform, as OTC index have rallied for 6th straight days, while beaten down AI ROBOTICS/BBU plays surged today.
• Korea: KOSPI +0.65%, rebounded. led by locals’ inflow. Locals extended their net buying streak for 3 consecutive days, mainly buying Tech (+$69mn) and Financials (+$94mn) today while foreigners remained as net sellers of equities, mainly selling Transport Equipment (-$231mn, comprised heavily of Shipbuilders, Defense, and Autos). Hanwha Ocean 042660 KR -12.1% as the name plunged after Co’s shareholder KDB announced to raise up to W1.1trn (c. $735mn) through a block deal. Meanwhile, Korean Autos (KRXAUTO +1.6%) gained as President Trump is expected to soften the impact of this auto tariffs.
• Japan: The market is closed today (Showa Day) and will resume trading on April 30th.
• China: SHSZ300 -0.2%, traded choppy as Sino-US trade uncertainty weighed on sentiment. China reiterated that it is not involved in trade talks with the US. Small cap and TMTs overthrown large cap but neither of them gave a strong conviction. Innovance 300124 CH +4% post earnings beat. Healthcare rebounded, but A is lagging H. Xinqi pharma 300573 +14% post earnings 3x in 1Q. There is also a peer bank report released yesterday calling for China HC re-rating, especially in the domestic pure revenue names like Ping An Good Doctor, and Ali health.
• HK: HSI +0.2%. SB turned net seller of -US$827mm today, continuing general trend of outflows from last week. On the flows front, the desk saw active managers sell into liquidity from passive buying. Wuxi AppTec 2359 HK +4.2% after 1Q25 earnings beat on both top and bottom line. Geely 175 HK also +4.2% after subsidiary Volvo indicated they would reduce costs. In contrast, BYD 1211 HK -2.6% as concerns of waning demand from yesterday persisted.

In FX, the Bloomberg Dollar Spot Index rose 0.2% after falling 0.5% on Monday, when a disappointing manufacturing activity report added to concerns over US economic growth; haven currencies the yen and Swiss franc, were the biggest underperformers versus the dollar, down 0.6% and 0.4% respectively

• CAD/USD was little-changed at 1.3831, outperforming other Group-of-10 currencies which were lower across the board
• EUR/USD fell 0.3% to 1.1388; 10-year bund yield fell 3bps to 2.49%
• GBP/USD also slipped, pulling away from a three-year high; gilts edged up, tracking gains in other European bonds

In rates, treasury futures drift lower into early US session, unwinding a portion of gains seen Monday and underperforming core European bonds. US yields cheaper by 1bp to 3bp across the curve with 2s10s steeper by 1bp on the day; US 10-year yields trade back up 3bps to around 4.24% with bunds and gilts outperforming by 4bp and 5.5bp in the sector.

In commodities, WTI drifts 1.6% lower to trade near $61.03. Spot gold falls roughly $29 to trade near $3,315/oz. Most base metals are in the green. Bitcoin climbs to around $95,000. 

The US economic calendar includes March wholesale inventories, February S&P CoreLogic house prices (9am), March JOLTS job openings, April consumer confidence (10am) and April Dallas Fed services activity (10:30am). From central banks, we’ll hear from the ECB’s Cipollone and Holzmann, and the BoE’s Ramsden. The Fed’s talking heads remain mute thanks to the communications blackout ahead of the May 7 FOMC meeting. Finally, earnings releases include Starbucks, Visa, Pfizer and UPS.

Market Snapshot

• S&P 500 mini +0.1%
• Nasdaq 100 mini +0.1%
• Russell 2000 mini +0.1%
• Stoxx Europe 600 +0.2%
• DAX +0.6%, CAC 40 -0.1%
• 10-year Treasury yield +2 basis points at 4.23%
• VIX -0.3 points at 24.86
• Bloomberg Dollar Index +0.2% at 1222.16
• euro -0.2% at $1.1394
• WTI crude -1.4% at $61.17/barrel

Top Overnight News

• Canada’s Liberal Party won a fourth straight election, handing Mark Carney a mandate but with a narrow margin of victory. The loonie was steady. The Liberals led with 168 seats, ahead of the Conservative Party’s 144 but short of the 172 required for a majority. The Bloc Québécois would hold the balance of power in a minority government, raising the likelihood of a looser fiscal policy than Carney wants. Carney vowed to win the trade war with the US and strengthen alliances with other countries. BBG
• President Trump is expected to soften the impact of his automotive tariffs, preventing duties on foreign-made cars from stacking on top of other tariffs he has imposed and easing some levies on foreign parts used to manufacture cars in the U.S. WSJ
• White House said Trump wants tax cuts in this reconciliation package, while it was separately reported that Bessent said he hopes the Trump tax bill can be done by July 4th.
• US Treasury Financing Estimates (Q2): expects to borrow USD 514bln in privately-held net marketable debt, assuming end of June cash balance of 850bln (prev. guided USD 123bln, assuming end of June cash balance USD 850bln).
• China’s copper stockpiles are on track to dwindle to nothing in just a few months, as the market suffers “one of the greatest tightening shocks” in its history on fears of US tariffs. FT
• China said it’s open to working with US companies after halting Boeing jet deliveries. India plans to highlight its large pipeline of Boeing orders and potential for more to secure a favorable trade deal with the US. BBG
• China said the US should stop making threats and pursue dialogue based on mutual respect. Earlier, Foreign Minister Wang Yi warned countries against caving in to tariff threats. BBG
• Eurozone inflation expectations rise, with 12-month climbing 30bp to 2.9% (highest since Apr ’24) and 36-month advancing 10bp to 2.5% (highest since Mar ’24). ECB
• Pakistan’s army said it shot down an Indian spy drone along their disputed border in the Kashmir region, as tensions rise over last week’s militant attacks. BBG
• A union representing West Coast dockworkers has sharply criticized President Trump over his “reckless” tariffs that will hurt American workers. The union noted the tariffs have created tension with allies and are a “direct attack” on the working class. The Hill
• Scott Bessent set a July 4 goal to pass Trump’s multi-trillion dollar tax cut package. He also said the debt-ceiling X date will be announced this week or next. BBG

Tariffs/Trade

• US President Trump is expected to soften the impact of his automotive tariffs by preventing duties on foreign-made cars from stacking on top of other tariffs he imposed and easing some levies on foreign parts used to manufacture cars in the US, according to WSJ citing sources. Furthermore, a White House official said those actions are expected on Tuesday and Commerce Secretary Lutnick said President Trump is building an important partnership with both the domestic automakers and American workers, while Lutnick added this deal rewards companies who manufacture domestically, as well as provides a runway to manufacturers who have expressed commitment to invest in America and expand their domestic manufacturing.
• Chinese Foreign Minister Wang Yi said concession and retreat will only make the bully more aggressive.
• China’s MOFCOM said on the report that Boeing flew back three 737 MAX planes to be delivered to Chinese airlines, that China and the US have maintained long-term mutually beneficial cooperation in the field of civil aviation, while it added the US wielded the big stick of tariffs to seriously impact the stability of global industrial and supply chains, and many enterprises were unable to carry out normal trade and investment activities.
• Italian PM Meloni says times are not mature yet for an EU-US summit, according to Corriere Della Sera.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly in the green but with some of the gains capped following the choppy performance stateside and in holiday-thinned conditions with Japanese markets closed for a holiday, while reports that US President Trump is expected to soften the impact of his automotive tariffs saw a muted reaction. ASX 200 gained amid outperformance in the energy, tech and resources sectors, while miners were also lifted as  participants digested output updates. Hang Seng and Shanghai Comp were varied as the mainland lagged owing to uncertainty from the US-China trade war with US Treasury Secretary Bessent recently commenting that it is up to China to de-escalate and that he has an “escalation ladder in his back pocket”, while China’s Foreign Ministry reiterated its denial regarding a Trump-Xi call and Foreign Minister Wang Yi warned that compromise and backing down would only embolden the bully.

Top Asian News

• Japan and Malaysia are reportedly exploring broader economic ties including AI and automotive.
• Alibaba (9988 HK) introduced Qwen3 to set a new benchmark in open-source AI with hybrid reasoning.
• Earthquake of magnitude 5.0 strikes China’s Tibet region, via CENC.
• Agricultural Bank (1288 HK) Q1 (CNH) Revenue 186bln (exp. 185bln), Net Income 72.1bln (exp. 73.95bln), +2.2% Y/Y, NII 140.6bln (exp. 142.7bln), CET1 11.23%.
• Industrial and Commercial Bank of China (1398 HK) Q1 (CNH) NII 156.78bln (exp. 161.29bln), Net Income 84.70bln, -4% Y/Y.
• China Construction Bank (939 HK) Q1 (CNH) NII 141.92bln, NIM 1.41%.
• Bank of China (3988 HK) Q1 (CNY) Net 54.36bln (exp. 57.4bln), NIM 1.29%, Operating Income 165bln (exp. 155bln)

European bourses opened modestly firmer/flat, but some modest pressure crept into the complex as the morning progressed – with indices generally off best levels, to show a mixed picture in Europe. European sectors hold a slight positive bias, albeit with the breadth of the market fairly narrow. Basic Resources takes the top spot, followed closely by Media and Banks. Energy is found at the foot of the pile, dragged down by post-earning losses in BP (-4%); the continued pressure in the crude complex is also not helping. Autos find themselves towards the middle of the bunch. For the sector more generally, US President Trump is expected to soften the impact of his automotive tariffs, by preventing duties on foreign-made cars from stacking on top of other tariffs he imposed and easing some levies on foreign parts used to manufacture cars in the US, via WSJ. For stock specifics, Porsche AG (-5%) dips after it cut FY25 guidance; Volvo Car (-8.3%) reported a significant miss on its EBIT and Revenue figure and launched a SEK 18bln cost and cash action plan.

Top European News

• ECB Consumer Expectations Survey: March: See inflation in next 12 months at 2.9% (prev. 2.6%); 3y ahead sees 2.5% (prev. 2.4%); 12-month is highest since April 2024. Economic growth expectations for the next 12 months were stable in March, standing at -1.2%.
• ECB’s Cipollone says that ECB staff estimates suggest that the recently observed increase in financial market volatility might imply lower GDP growth of about 0.2ppts in 2025.

FX

• USD is attempting to claw back some of yesterday’s losses that were in part driven by a soft outturn for Dallas Fed Manufacturing data. On the trade front, US President Trump is expected today to announce measures to soften the impact of his automotive tariffs by preventing duties on foreign-made cars from stacking on top of other tariffs, according to WSJ. DXY has risen as high as 99.31 but is yet to venture near Monday’s best at 99.83.
• EUR/USD has faded some of its recent gains and failed to sustain the 1.1400 status with recent price action largely driven by moves in the greenback. Spanish CPI metrics which printed hotter-than-expected on a Y/Y, M/M and core basis. EUR/USD is currently contained within Monday’s 1.1329-1.1425 range.
• USD/JPY marginally rebounded from support around the 142.00 level after sliding yesterday owing to the early initial risk aversion and lower US yield environment but with the recovery limited in the absence of Japanese participants. USD/JPY has ventured as high as 142.57 but is some way off Monday’s opening level at 143.57.
• GBP is a touch softer after Monday’s session of outperformance which didn’t appear to be driven by any obvious catalyst. BoE’s Ramsden is due later; Cable matched its YTD high printed yesterday at 1.3444 before pulling back.
• Antipodeans are both softer vs. the greenback amid a lack of pertinent newsflow out of Australia and New Zealand. That will change tomorrow for AUD with Australian Q1 CPI due on deck.
• CAD in focus after Canada’s ruling Liberals, led by Mark Carney, won the national election. However, the outcome was closer than predicted by polls and will require the party to form a minority government. Accordingly, initial support for CAD has faded as markets reprice away from expectations of a majority government. USD/CAD currently sits towards the bottom end of yesterday’s 1.3816-92 range.
• Canada’s ruling Liberals led by Mark Carney won the national election but will need to form a minority government, according to CTV.
• PBoC set USD/CNY mid-point at 7.2029 vs exp. 7.2781 (Prev. 7.2043).

Fixed Income

• A contained start for fixed income given the Japanese holiday (Showa Day) overnight, meaning that there was no cash trade. USTs currently at the lower-end of a very thin 111-22 to 111-30 band and one that is within Monday’s 111-10 to 111-31 confines. Focus ahead is on, US Consumer Confidence, Advance Goods Trade and JOLTS Job Openings.
• Bunds is modestly firmer. On the data front, Spain’s inflation printed hotter-than-expected across the board and sent Bunds to a 131.16 low with Alphabet’s presence in the market perhaps also weighing. Thereafter, Bunds have recovered a touch and are back into the green and just off a 131.46 session high; a high that printed as the European risk tone came under a little bit of pressure after the Russian Kremlin said Ukraine has not responded to its latest ceasefire proposal.
• Gilts are flat given the lack of leads from sparse overnight trade and a European morning that has been devoid of UK-specifics aside from earnings. At the lower end of a 92.96 to 93.25 band, comfortably within Monday’s 92.79 to 93.33 range. BoE’s Ramsden is due later.
• UK sells GBP 900mln 1.25% 2054 I/L Gilt: b/c 3.31x (prev. 3.06x) & real yield 2.175% (prev. 2.126%).
• Italy sells EUR 7.5bln vs exp. EUR 6.5-7.5bln 2.95% 2030, 3.60% 2035 BTP & EUR vs exp. EUR 1.5-2.0bln 2033 CCTeu.
• Alphabet (GOOGL) kicks of debut sale of EUR debt 4yr IPTs mid-swaps +85bps area. 8yr IPTs mid-swaps +105bps area. 12yr IPTs mid-swaps +125bps area.

Commodities

• Crude is on the backfoot, extending on the prior day’s losses; there has been little by way of fresh oil-specific newsflow, so focus has been on updates out of Russia/Ukraine; most recently, Russia’s Kremlin suggested Ukraine had not responded to offers to commence negotiations. Brent July’25 currently trades in a USD 63.62-64.81/bbl range.
• TTF is lower on the day, after finishing Monday’s session modestly higher, surrounding a number of updates including the blackout in Spain and a three-day ceasefire proposal from Russia. With Spain and Portugal’s blackout almost fully resolved today’s attention now shifts to Russia’s ceasefire proposal, announced for May 8th-11th. As it stands, Russia says Ukraine is not responding to the proposal.
• Spot gold continues its reversal from recent record highs, with a number of risk events ahead including US consumer confidence and pivotal speakers such as Commerce Secretary Lutnick and Treasury Secretary Bessent who are likely to speak on auto tariffs. Thus far, today’s low has been recorded at USD 3,314/oz, with a high of USD 3,359/oz.
• Copper is a little firmer after a broad base metals bid this morning, lifting it from near session lows of USD 9,368/t, to session highs of USD 9,455/t, currently holding just off best levels.
• Spain’s PM said the government will release 3 days worth of strategic oil reserves, while the grid operator later restored nearly all power.
• China’s copper supplies are on track to be depleted in just a few months as the market suffers one of the greatest tightening shocks due to fears of US tariffs, according to commodities trading house Mercuria cited by FT.
• Kazakhstan Q1 oil exports +7% Y/Y to 1.63mln BPD, according to Reuters calculations and official data.

Geopolitics: Middle East

• US President Trump intends to extend the two-month deadline allocated for US-Iran negotiations, according to Israel Hayom citing Israeli officials
• Gaza talks in Cairo are said to be witnessing a “significant breakthrough” and parties agreed on a number of issues including consensus on a long-term ceasefire in Gaza, although some sticking points remain including Hamas arms, according to Reuters citing two Egyptian sources.

Geopolitics: Ukraine

• Explosions were heard in Kyiv after the Ukraine air force issued air raid alerts and air defence systems were engaged in repelling a Russian air attack.
• Russian Kremlin says Ukraine has not responded to many offers by President Putin to commence negotiations without any preconditions, according to Tass Direct talks with Ukraine need to commence, adding this is primary and the legitimacy of Zelensky is secondary. 30-day ceasefire is impossible without settling all the nuances.

US Event Calendar

• 8:30 am: Mar P Wholesale Inventories MoM, est. 0.6%, prior 0.3%
• 9:00 am: Feb FHFA House Price Index MoM, est. 0.3%, prior 0.2%
• 9:00 am: Feb S&P CoreLogic CS 20-City YoY NSA, est. 4.7%, prior 4.67%
• 10:00 am: Mar JOLTS Job Openings, est. 7500k, prior 7568k
• 10:00 am: Apr Conf. Board Consumer Confidence, est. 88, prior 92.9

DB’s Jim Reid concludes the overnight wrap

It’s shorts and sandals weather here in the UK which is lovely unless it forces you to look at the horrible brusing of my broken little toe. Enjoy the sunshine if you’re in Europe this week.

After last week’s rally, markets saw a choppy start to a busy week with the S&P 500 recovering from a -1% decline to narrowly post a fifth consecutive gain (+0.06%) last night, even as the Mag-7 (-0.36%) lagged ahead of Meta and Microsoft earnings tomorrow and Apple and Amazon on Thursday. 10yr Treasuries (-2.7bps) also gained for a fifth session in a row, falling to their lowest level in three weeks at 4.21%.

On tariffs, the latest newsflow was actually fairly positive at face value, as US officials continued to sound optimistic about potential trade deals yesterday. For instance, Treasury Secretary Bessent said that they’d had “many countries come forward and present some very good proposals”. He also said “I would guess that India would be one of the first trade deals we would sign”. Separately, White House Press Secretary Karoline Leavitt also said that more details on trade talks would be announced this week. And later on, Bessent tweeted that they were “continuing to make substantive movement on negotiations with many of our trading partners.” So the rhetoric from the administration is still pointing towards negotiations, rather than further escalation. However, there was still little sign of dialogue between the US and China, with Bessent saying “I believe it’s up to China to de-escalate”. Overnight the incremental positive news has continued with the White House confirming an earlier WSJ story that imported autos would not also face additional aluminum and steel tariffs. This has helped lift S&P (+0.19%) and Nasdaq (+0.24%) futures this morning.

This steady flow of mostly more positive trade headlines lifted the S&P 500 from as low as -1.02% mid-way through yesterday’s session to ultimately close marginally higher on the day (+0.06%). That left the index still narrowly in technical correction territory, closing -10.02% below its peak in mid-February, but its slightly above that mark again this morning. It was actually a decent day in terms of market breadth, with two-thirds of the S&P 500 constituents moving higher on the day and its equal-weighted version up +0.30%. By contrast, tech stock underperformance saw the Magnificent 7 decline by -0.36%, led by a -2.05% fall for Nvidia as the chipmaker struggled following news that China’s Huawei is set to test a new chip that could end up being a competitor.

Earlier in yesterday’s session, the mood at the lows wasn’t helped by the Dallas Fed’s manufacturing survey, which plunged to its lowest level since May 2020. Specifically, the general business activity index was down to -35.8, and the raw materials prices index also moved up to its highest level since mid-2022, at 48.4. So that added to the stagflationary narrative, although it’s worth noting that this is a survey once again rather than hard data, and so far the surveys have tended to suggest a worse performance relative to the hard data. As a result, markets weren’t too reactive to the print directly, but it added to the more downbeat backdrop going into this week’s other releases.

US Treasuries saw a more consistent performance, with 10yr yields falling -2.7bps to 4.21% and 2yr yields down -5.4bps to 3.70%, their lowest level since April 4th. Yesterday afternoon, the Treasury released its latest quarterly borrowing estimates, with the Q2 issuance estimate revised up to $514bn from $123bn due to a lower starting cash balance and with the Q3 estimate at $554bn. These figures were slightly above our rate strategists expectations but this may be due to the Treasury not yet factoring in increased tariff revenues. The announcement had limited impact on yields, which closed near the session’s lows. In other fiscal news, after the US close Treasury Secretary Bessent said the administration hoped to have Congress pass their tax bill by July 4.

With rates moving lower, one US asset that did lose ground yesterday was the dollar, with the dollar index down -0.54%, as the safe haven currencies of the Swiss franc (+1.02%) and Japanese yen (+1.17%) outperformed.

Back in Europe, there was a stronger risk-on tone, which reinstated the pattern of European outperformance in 2025. In fact, at the intraday peak, the DAX (+0.13% at the close) even managed to entirely erase its losses since Liberation Day, although by the end of the session it was still -0.53% beneath its levels on April 2. Nevertheless, the index was still up for the 8th time in the last 9 sessions, and those gains were echoed across the continent. For instance, the STOXX 600 (+0.53%) advanced for a 5th consecutive day, as did France’s CAC 40 (+0.50%). The smallest yet most notable rise was the FTSE 100 (+0.02%), which posted an 11th consecutive advance for the first time since 2019, and if it manages a 12th consecutive gain today, that would be the first time since 2017.

Consistent with that risk-on tone, European sovereign bond yields also moved higher, with those on 10yr bunds (+5.1bps), OATs (+4.9bps) and BTPs (+5.5bps) all rising. Likewise, credit spreads tightened further, with Euro HY spreads down -4bps to 349bps, edging closer to their Liberation Day level of 322bps.

In political news, Prime Minister Mark Carney’s Liberal Party is projected to win the Canadian federal election. However, with projections showing the Liberals leading in only 155 of 343 seats – shy of the 172 needed for a majority – Carney is likely facing a minority government and will need to negotiate with other parties to pass legislation. The Conservatives are currently projected to win 150 seats. So a remarkable comeback for the Liberals relative to their January lows when they were over 25pp down in the polls but seemingly not quite as good as they would have hoped as the polls closed last night.

In Asia the fresh overnight news on auto tariffs we discussed at the top seems to be helping push markets higher. The S&P/ASX 200 (+0.91%) has hit a near 2-month high with the KOSPI (+0.65%) and the Hang Seng (+0.38%) also edging higher while Chinese equities are bucking the positive trend with the CSI (-0.14%) and the Shanghai Composite (-0.05%) seeing minor losses. Elsewhere, Japanese markets are closed for a public holiday. There’s no trading of cash Treasuries in Asia as Japan is closed.

To the day ahead now, and data releases from the US include the JOLTS report for March, the Conference Board’s consumer confidence indicator for April, and the FHFA’s house price index for February. Meanwhile in the Euro Area, we’ll get the M3 money supply for March, and the European Commission’s economic sentiment indicator for April. From central banks, we’ll hear from the ECB’s Cipollone and Holzmann, and the BoE’s Ramsden. Finally, earnings releases include Starbucks, Visa, Pfizer and UPS.

Spanish power distributor Red Eléctrica announced on X early Tuesday that 99% of the country’s power capacity had been restored following a daylong, unprecedented blackout that plunged much of Europe’s Iberian Peninsula into chaos and darkness.

The Iberian Peninsula… wiped off the map of lights. This is how it looked from orbit last night after a massive blackout hit Spain and Portugal. Cosmic silence over the region.”#Blackout #IberianPeninsula #Spain #Portugal #PowerOutage #SatelliteView #EarthAtNight… pic.twitter.com/0HyA7tN8m0

— David Sobolewski (@buzzyrobot) April 29, 2025

As of 0700 local time, Red Eléctrica stated:

• 99.95% of the demand recovered (25,794MW).

• We continue working from the Electrical Control Center for the complete normalization of the system.

The outage paralyzed digital payment systems, disrupted communications, and brought various modes of transportation networks to an apocalyptic standstill. While a Spanish judge has launched an investigation into whether a cyberattack was responsible, early indications suggest the culprit is likely net zero.

Here’s an excerpt from Michael Shellenberger at PUBLIC, who provided an uncomfortable truth about the unhinged liberals in Europe who have been hellbent on retiring fossil fuel power and nuclear generation plants, swapping for unreliable solar and wind:

Despite all these warnings, political and regulatory energy in Europe remained focused on accelerating renewable deployment, not upgrading the grid’s basic stability. In Spain, solar generation continued to climb rapidly through 2023 and early 2024. 

Coal plants closed. Nuclear units retired. 

On many spring days by 2025, Spain’s midday solar generation exceeded its total afternoon demand, leading to frequent negative electricity prices.

The system was being pushed to the limit.

And today, at 12:35 pm, it broke.

…

Spain’s blackout wasn’t just a technical failure. It was a political and strategic failure.

…

Unless Spain rapidly invests in synthetic inertia, maintains and expands its nuclear fleet, or adds some other new form of heavy rotating generation, the risk of future blackouts will only grow worse.

Red Eléctrica has refused to speculate on the cause of the worst blackout in Spain’s history. However, REN, the Portuguese grid operator, said Monday that a rare atmospheric phenomenon in Spain caused by extreme temperature variations was the most likely cause.

Via Daily Mail…

Spain’s Prime Minister Pedro Sánchez told reporters that the power blackout was caused by an issue in the European grid. He described it as a “strong oscillation” but did not provide further details. 

Sánchez noted that power was pulled from Morocco and France to restore power in southern and northern parts of Spain. Local grids were adding the production of hydroelectric and combined cycle thermal power plants to stabilize the grid.

Spain’s green energy revolution actually achieved net zero yesterday: blackout. 

Congratulations to Portugal and Spain for achieving Net Zero today –
Zero emissions, Zero electricity, Zero explanations! ⚡🌎#NetZero #Blackout pic.twitter.com/JP6k5Q4jcl

— Paul Hennessy (@PPHennessy) April 28, 2025

An inconvenient truth for some. “Net zero blamed for blackout chaos in Spain and Portugal.”

It’s time to end the nonsense of net zero – which is a threat to economic and energy security. pic.twitter.com/qymXSArQgt

— James Melville 🚜 (@JamesMelville) April 29, 2025

Net Zero blamed for blackout chaos

Spain, Portugal & part of France

Net Zero is damaging & dangerous

Stop it pic.twitter.com/ViQ5BeQwii

— Alan D Miller (@alanvibe) April 29, 2025

‘Critics of Net Zero are now questioning whether renewables were to blame’.@benleo444 reports from Madrid on the nationwide power outage that Spain experienced yesterday. pic.twitter.com/6RkGKkvsB4

— GB News (@GBNEWS) April 29, 2025

Great job, Western liberals, on the deranged march to net-zero, culminating in the implosion of part of Europe’s power grid. Meanwhile, China is adding record amounts of coal and nuclear power capacity. It’s almost as if the entire green movement is about de-growth — and, in some cases, seems like sabotage fueled by sheer stupidity.

Authored by Charles Hugh Smith via OfTwoMinds blog,

Statistical games can be played to mask the realities of our neofeudal economy, but “narrative control” can’t obscure the facts or the banquet of consequences that these realities have set.

Not everyone in America gained ground as a result of the rampant hyper-financialization and hyper-globalization of the 21st century. Let’s begin our analysis of who gained ground and who lost ground in the year 2001, when China entered the WTO (World Trade Organization) and offshoring / globalization shifted into high gear and when the Federal Reserve began ramping up its financialization / monetary manipulation–oops, sorry, policy interventions.

The top 1% and the top 10% gained ground. The bottom 90% lost ground, especially the bottom 50%. Wage earners lost ground, while corporate insiders, financiers, speculators using leverage and those lucky enough to be born long enough ago to buy assets at pre-bubble valuations gained ground.

If you want to argue with these facts, argue with the Federal Reserve Database. All these charts are drawn from the St. Louis Federal Reserve FRED Database.

Let’s start with the varying multiples generated by asset bubbles since 2001.

• NASDAQ up 9.3X

• Corporate profits up 6.2X

• Case-Shiller Housing Index up 3X

Those are some serious bubbles, given that $1 in 2001 is $1.80 in today’s currency.

If the NASDAQ index had risen at the same rate as inflation since 2001, it would be 3,340, not 17,166.

Corporate profits would be $1.26 trillion annually, rather than $4.3 trillion. Hmm, $3 trillion a year is a nice chunk of extra change for gutting national security, quality and durability by offshoring essential industries.

The Case-Shiller Housing Index would be up from 110 in 2001 to 200 today, rather than 323.

So how did each household sector do since 2001?

• Net worth of top 1% up 5X

• Net worth of 90-99% up 3.9X

• Net worth 50-90% up 3.2X

• Net worth bottom 50% up 3X

How much of the nation’s total household net worth does each sector own now in dollars?

• Total net worth: $160.2 trillion

• top 1%: $49.4 trillion

• 90%-99%: $58.3 trillion

• Top 10%: $107.7 trillion

• Bottom 90%: $52.5 trillion

• Bottom 50%: $4 trillion

Note that the top 1% own roughly the same net worth as the bottom 90%.

How much of the nation’s total household net worth does each sector own now as a percentage of total net worth?

• Total net worth: $160.2 trillion

• Top 1%: 31%

• 90%-99%: 36.5%

• TOP 10%: 67.5%

• Bottom 50%: 2.5%

• 50%-90%: 30%

• BOTTOM 90%: 32.5%

Since wealth is concentrated in the top layer of each sector–the top 1% own the lion’s share of the top 10%’s net worth, and the top 10% of the 50% to 90% sector own the lion’s share of that sector’s net worth–we can say with confidence that the top 20% own roughly 80% of the net worth–in line with the Pareto Distribution (the 80/20 rule).

What’s lost in this aggregate number is the extreme concentration of income-producing wealth (and thus political power) in the top 0.1% of the citizenry and the mere crumbs left to the bottom 60%. As many of us have pointed out over the past 15 years, the only accurate description for this system is neofeudal, where a New Nobility owns the wealth and political power, the bottom 80% are modern-day debt-serfs and the “middle class” is now the 90% to 99% sector, with those in the 80% to 90% sector having just enough home equity to fancy themselves “middle class” in name if not in ownership of income-producing assets or political influence.

What do we call a system in which the top 1% own roughly the same net worth as the bottom 90%? Neofeudal. Any other description is misdirection / propaganda aimed at protecting the interests of the Nobility at the expense of the serfs.

The NASDAQ stock market index: up 10X at its recent peak.

Corporate profits up 6.2X as surveillance pricing, monopoly price-gouging, crapification, planned obsolescence and extortion have worked marvelously well in stripmining the citizenry to enrich the top 10% who own 90% of all stocks, the “shareholders.”

Wage earners’ share of the nation’s income has been slashed over the past five decades. Unsurprisingly, hyper-financialization and hyper-globalization did nothing to reverse this decline of American labor in favor of global capital.

If housing fell 40% from its current valuation, it would return to the trend line.

Here’s a chart of net worth since 1950. Approximately $100 trillion was added above and beyond what inflation dictated.

Some percentage of the bottom 50% benefited from the housing bubble, but even with the bump to $4 trillion in net worth, the bottom 50% owns a grand total of 2.5% of total net worth.

Here’s the 50% to 90% sector:

Here’s the 90% to 99% sector:

Here’s the top 1% sector:

Statistical games can be played to mask the realities of our neofeudal economy and society. But narrative control by the well-paid apologist-punditry class–everyone’s doing great because I’m doing great–can’t obscure the facts or the banquet of consequences that these realities have set.

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