DC Lite #340

1. CPI. Lower energy prices drove the first MoM decline in headline CPI since May 2020, while core CPI rose just 0.06% in March (vs. 0.26% est).

2. CEO confidence vs. credit spreads. "Despite the tariff pause, much damage has already been done to sentiment. Confidence is waning, as can be seen in CEO confidence - as the chart shows, this has typically led to wider credit spreads."

3. Yields vs. DXY. "Yields higher, currency lower is common in EM. We saw this in the UK during the Truss debacle. But it is highly abnormal for the US ... It reflects evaporating US growth exceptionalism and the reduced attraction at the margin of dollar assets for reserve purposes amid erratic US decision-making."

4. SPX 5% gains. "23 times the S&P has gained at least 5% in one day. The next day and a week out = fairly weak returns. But a year later? Up 26.9% on avg and higher more than 91% of the time."

5. Macro vs. micro. "This earnings season isn’t about corporate results. It’s about tariffs ... The result is that implied correlations are doing the opposite of what they usually do in this window ... The market is saying that macro fears mean we can’t be too nuanced about how individual companies are doing."

ICYMI

• Wed 4/9 #339: The S&P 500 and Nasdaq jumped by the most since 2008 and 2001, respectively

• Tue 4/8 #338: "A market bottom signal based on extremes in breadth has activated"

• Mon 4/7 #337: "'No recession' bears are rare, with only three recorded in the past century (the last being in 2022)."

• Fri 4/4 #336: "A spike above 45 in the $VIX has generally been a pretty good panic-clearing signal"