Yahoo Finance

We want to start with that S&P 500 run that we saw. So four straight up days, first time we've seen it since January. And it was largely tech leading that. So for the week, we're going to zoom out to a 5-day here. The S&P 500 rose over 4.5%, and then you take a look at the NASDAQ, which does have more tech companies within it, up over 6%. And then I want to look at our heat map and sort of look at what was going on with some of our large cap tech. So again, that's your sector action. You can see XLK Information Tech rising 8%. But what was interesting to me,

Mhm.

I mean, you've got Tesla up 18%. Bad earnings report, generally speaking, but CEO Elon Musk likely coming back, maybe ahead, or a potential tailwind with some full self-driving news there. You look at NVIDIA up 9%, Amazon up 9%, Meta. But what I think is perhaps most interesting moving forward, when we look at this screen is when I flip it to a year to date, right? So we got a lot of green on our screen.

A lot more. Yeah, so we haven't made, Yeah.

we've made progress, right? But I think it's important to remember how far away we still are from sort of where we entered the year, right? And when I look at this screen, I sort of wonder, all right, you have earnings from Amazon next week, earnings from Apple, earnings from Microsoft, earnings from Meta. What are we going to hear that maybe gives investors a little bit more confidence other than just the bounce off the bottom that makes this a little bit more sustainable.

Yeah, and then also one of the other things we got today was the revised consumer sentiment numbers. We've also heard from a lot of, not so much consumer discretionary companies yet, retail comes later, but we've been hearing about the consumer staples companies and the tariff pressures they're going to be facing.

Yes, and so we had that revised consumer sentiment number, Julie, and it was bad. Um, so it came up slightly, so the difference in this consumer sentiment number came after Trump announced the 90-day pause, right? So you saw a little bit of an uptick, but generally speaking,

Yeah.

you're at one of the lowest levels on record going back to 1980. And there's kind of no other way to cut that. It's very pessimistic out there. And so the question has been, and I've been asking economists this this week, well, when does the quote-unquote survey soft data lead to hard data deterioration? So Goldman Sachs did some interesting research on this. Couple different lines here. What you're looking at, the blue line, we'll basically call that the consumer sentiment that we were talking about. So that normally dips down first, right? And you see this big dip down. What's interesting here is the yellow line

So this is like the average trajectory.

This is the average trajectory for an event-driven recession.

Ah, okay. So prior recession. Okay.

So event driven, event driven recession would be the oil shock in the 1970s or perhaps Paul Volcker's interest rate increases in the 1980s, right? Those were these sort of events

Okay.

they're looking at, so tariffs, event-driven. What's interesting is you see hard data actually pick up in the first 20 days. You've seen that over the last month with some of the data from March, right? Retail sales were strong in March. You had, uh, good goods orders were strong in March. It doesn't actually tick down for about two months.

Hmm.

And so when we flip to, they're tracking it currently, it's basically tracking what normally tracks. And so Goldman is essentially arguing perhaps early to mid-summer, maybe June, July, you start to get a real sense of, okay, how much are we actually slowing when that data comes in.

Hmm, and yet the Fed is expected to start cutting in June, maybe.

I think that debate's going to be going on for a little while, right? Going into that meeting. A final chart that I brought with us today, Julie. So this is sort of looking at the tariff confusion in earnings. So Deutsche Bank had an interesting chart this week. They lowered their S&P 500 target from 7,000 to 6,100. What we're looking at here is what cuts down your EPS forecast.

Really?

Yeah.

Interesting. Uh.

I love it when they do this.

So they they highlighted nine

Yeah, I've also loved this.

nine different things, right? So I think lower volume growth, what they're really talking about here, that's recession risk, right? So you're going to get potentially lower sales. Then you look at basically $10 between China tariffs, between exports and imports. And then I have to flip to a second slide because there's so many of them, but persistent uncertainty, uncertainty. Oh,

Yeah.

Foreign boycotts is an interesting one. They're taking $3 off for that.

Foreign boycotts. Right. And what my takeaway was from this again, look, we're looking at nine different headwinds that bring you from 282 to 240.

No wonder why the market's been so chaotic. There's nine legitimate reasons that a strategist is looking at to weigh on earnings. Each one of these could change tomorrow.

Yeah, could be. Yeah, and each one of those could be, you know, if if you're taking off $3, could it be $1, could it be $2, could it be $5.

Right.

Yeah.

And that's with nine different things, right? So no wonder why the market is sort of doing this. And I think that gives us moving forward, until we actually get clarity on what policy is, we're probably living in a world where it looks a little chaotic.

Yeah. Yes. Yeah. Feels that way. Thanks, Josh.