Global markets steady on trade progress

Global markets steady on trade progress

In the US, the S&P 500 and Nasdaq returned to their April 2 levels, completely erasing the 15% drop after Mr Trump announced a series of reciprocal tariffs on “Liberation Day”. Meanwhile, Germany’s DAX index hit a new record high, while Japanese stocks recorded their longest winning streak in more than two years.

The positive sentiment was bolstered by a series of aggressive stimulus measures from China, including interest rate cuts and liquidity injections. The Bank of England (BoE) also cut interest rates, while the Bank of Japan (BoJ) appeared to have paused its tightening cycle. Although the US Federal Reserve (Fed) did not make any new easing moves, maintaining a steady policy stance also provided comfort amid uncertainty.

In terms of business results, 450 companies in the S&P 500 have announced first-quarter profits, with an average growth of about 14%. However, according to analysis from IBES/LSEG, the number of forecasts for second-quarter profits is nearly twice as high as the number of forecasts for increases.

Despite the positive signs, a cautious mood prevailed on Wall Street. Treasury yields and stock indexes were little changed this week, reflecting investor skepticism about the consistency of U.S. policy. President Trump and Vice President JD Vance continued to attack Fed Chairman Jerome Powell, while Trump unexpectedly proposed an 80% tariff on Chinese goods - a statement the White House later confirmed was unofficial.

Even if the trade deal is finalized and tariffs are reduced from the April 2 initial proposal, they will still be significantly higher than they were before Trump took office. Economist Phil Suttle estimates that the average effective tariff rate in the US will be around 22%, a fourfold increase from the level at the beginning of his term.

Goldman Sachs experts warn that, although current economic data remains stable, the US economy is approaching the threshold of a decline in activity.

For investors, how to view the current market depends on where they are coming from: optimistic because tariffs are not as high as expected, or pessimistic because tariffs are still significantly higher than before? In a context of prolonged uncertainty and limited visibility, the current “pause” period may be a necessary buffer.

All eyes are now on Geneva, where a US delegation led by Treasury Secretary Scott Bessent will hold trade talks with China, led by Vice Premier He Lifeng. Market action early next week could be interesting.

Summary of outstanding market developments of the week

- Wall Street's three major indexes, along with the MSCI World Index and MSCI Asia ex-Japan Index, ended the week almost unchanged, trading within a 0.5% range – a surface stability that may mask underlying volatility.

- Germany's DAX index hit a new high, up 18% year-to-date and 27% from its April 7 low.

- Japanese stocks rose for a fourth straight week, the longest winning streak in more than a year, supported by a weak yen.

- Credit spreads on high-risk US corporate bonds narrowed for the fifth consecutive week, the first time in two years, now down to 350 basis points.

- Bitcoin rose nearly 10%, surpassing the $100,000 mark for the first time since February.

Events that may impact the market early next week:

- Developments from US-China trade talks in Geneva

- Reaction to China's inflation data released Saturday

- India April Inflation Figures

- Japan March trade and current account data

- Speaking by BoE officials at the event in London: Megan Greene, Clare Lombardelli, Catherine Mann and Alan Taylor.

In other news, the first moves of the second Trump administration show that federal spending is not only unchecked, but also showing signs of increasing compared to the Biden era. Economists at Morgan Stanley this week forecast the 2026 budget deficit to reach 7.1% of GDP, up from 6.7% in 2025, equivalent to an increase of about $310 billion. These figures could make investors nervous and put further pressure on long-term government bond yields.

Source: https://thoibaonganhang.vn/thi-truong-toan-cau-on-dinh-nho-tien-trien-thuong-mai-163975.html