Shaky Start to a Big Week for World Markets

The first day of the new trading week, which is also the last trading day of the month and the quarter, finds stock markets around the world under heavy selling pressure. Overnight, the Nikkei plunged 4.0%, while the Hang Seng fell 1.3%. European trading finds the Dax and CAC both down 2.0%, with the FTSE down 1.4%. US index futures are down 0.8% to 1.6%, adding to Friday’s US index losses of 1.7% to 2.7%. The NASDAQ continues to lead the way downward.

The looming April 2 “Liberation Day,” as coined by President Trump—when the US plans to launch reciprocal tariffs against nearly every country, along with additional tariffs on some countries like Canada and Mexico—appears to be weighing heavily on equity market sentiment. On the other hand, defensive capital flows have pushed gold up to a new all-time high, with a 1.1% gain taking the yellow metal to $3,150/oz for the first time ever.

It’s also a big week for economic news. China reported Manufacturing and Non-Manufacturing PMI surveys overnight which were slightly above 50 in expansion territory and in line or slightly better than expectations. US Chicago PMI (street 45.4) is due at 9:45 am EDT.

The Reserve Bank of Australia meets tonight with no changes to interest rates expected. Tomorrow brings Manufacturing PMI reports from around the world and US construction spending. Economic numbers roll out through the rest of the week, headlined by ADP payrolls on Wednesday, Service PMI on Thursday and US Nonfarm Payrolls and Canada employment on Friday. There is also the potential for more profit warnings from corporations (Confession Season).

The US 10-year treasury note yield has slipped down toward 4.20% while the US Dollar is up 0.1%-0.4% against the Euro, Loonie, Yen, and Bitcoin. Commodity action finds Crude Oil up 0.4% and Copper down 1.8%. This action suggests that investors remain indecisive about whether tariffs driving a potential decline in GDP or a possible rise in inflation (Stagflation) may have the bigger impact on interest rates and the global economy moving forward. 

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