By coinnews 
00:00:05 Speaker A
Half an hour into the start of US trading, let’s go to check on the major averages here. Taking a look at gains across the board. You’ve got your S&P holding above that 5650 level. If we do close where we are at right now, the S&P will have erased all of the post Liberation Day losses. That was on April 2nd when those reciprocal so-called reciprocal tariffs on dozens of countries were announced by the Trump administration. You’ve also got your tech heavy Nasdaq up about 8/10 of a percent at the moment. Let’s take a look at the bond market though. That curve steeper, actually, we’re going to take a look in at Apple at the moment because it was interesting to see the moves on Apple off the back of its earnings. You can see that company still moving to the downside here. It’s down about 4 and 1/2%. I also want to take a look at Amazon. It’s been interesting to see Amazon flipping between red and green this morning, though at the moment, it is down a little over 1%. Well, I want to bring in Ed Al Hussein, joined me for the hour. He’s a Global Rates strategist at Columbia Threadneedle. Prior to Colombia, he worked on resolving financial crises as an economist at the World Bank and the IMF. Ed, it’s great to have you in studio. Thank you for making the time. So one thing I’m eager to talk to you about is the fact that we’re now a month out from that so-called Liberation Day when all of those tariffs were announced. There were so many deals teased out. We’re so close with India. We’re so close with Japan, but we have yet to see a single deal. Where are we heading? Are we getting deals?
00:02:19 Speaker B
Yeah, I mean, it’s incredible how quickly that news tends to decay in markets. Markets first absorb that negative shock coming from tariffs. We went down in terms of equities, we brought down credit spreads and progressively as bad data did not crystallize so far this month, we’ve we’ve managed to pull back up. And so, look, on the trade policy front, not a lot has changed, but incrementally, we’re not crystallizing some of the downside risks and markets are starting to sniff that out.
00:03:15 Speaker A
Yeah, and talk to me about that because the S&P 500 is on track to recoup all of the post April 2nd losses. Is the market ignoring the weakness that is still there because of tariff policy, or is there actually some optimism that we’re just not making enough time to talk about?
00:03:49 Speaker B
Yeah, I mean, look, I think on the optimistic front, there’s a fair amount of growth momentum that carried over from last year. We’ve had a fantastic growth story over the past couple of years. Some of that momentum has carried over into the first quarter, no doubt. The labor market this morning has shown, you know, fantastic signs of strength. Again, if we just look back over the course of the last four months, the labor market has been in pretty decent shape. Um, and you know, earnings, it’s a very mixed picture. Obviously, earnings guidance at this stage is going to be very murky. But in terms of numbers that have come through so far this year, they’re quite good. And so again, markets are just not finding enough negativity to latch onto in terms of risk assets right now.
00:04:56 Speaker A
Well, let’s let’s take a look at some of the so-called safe havens. I want to talk to you about the bond market because we’re seeing just a bit of a curve steepener going on over the course of this morning here. What does that tell you about how bond investors are thinking about any potential growth scare or economic weakness to come?
00:05:23 Speaker B
Yeah, so I think the cleanest story in rates markets has been the downgrade to growth expectations in the course of the first quarter. Um, I think consensus went down from maybe about 2 and 1/2 to 1 and 1/2, perhaps a shade lower. And so that’s allowed the bond market to price in a much more aggressive Fed easing cycle, about 100 basis points this year. And so now that’s being reassessed. Does the Fed need to execute that? Probably not with this data set, at least not at this stage.