DC Lite #336

1. China tariffs. "Markets are freaking out about China retaliating hard against the United States, with a 34% tariff on all US goods. But in economic terms, this isn’t such a big deal: China barely imports from the US in the first place."

2. Fed funds rate. "The market is now pricing for ~106 bps of rate cuts (or more than four 25 bps cuts), far above the 2 cuts communicated by the Fed."

3. Retail flows. After buying yesterday's dip at a record pace (+$4.7bn), retail orders amounted to net selling of $1.5bn as of noon today, the most over the first 2.5 hours of a trading session ever.

4. Trading volumes. "Over 26 billion shares changed hands today in a game of pass-the-falling-stock, smashing the previous record of 23.67 billion on January 27, 2021."

5. VIX spike. "A spike above 45 in the $VIX has generally been a pretty good panic-clearing signal. May be less accurate prior to times when VIX futures traded."

ICYMI

• Thu 4/3 #335: Today’s 4.8% decline was the worst since June 2020

• Wed 4/2 #334: Here is the full list of reciprocal tariffs. Noticeably absent: Canada, Mexico, Russia

• Tue 4/1 #333: "Historically, when the SPX breaks a quarterly streak of exactly 5 up quarters, forward returns are negatively skewed"

• Mon 3/31 #332: “The trend is your friend, until it ends. The U.S. stock market is no longer in an Up-trend”