“Chaos isn’t a pit. Chaos is a ladder.” — Game of Thrones
Chart of the Day
Good morning!
Stock losses are putting pressure on the wealthy, whose massive spending has helped prop up the U.S. economy through worries about recession over the past few years.
The S&P 500 has declined 6.1% this year, while the Nasdaq Composite is down 10%. Even high flying tech behemoths have been humbled this year. Nvidia shares have fallen 17% in 2025, Apple has lost 16%, and Tesla is down 29%. And except for gold, the other havens don’t seem to work.
That has helped erase around $6 trillion from U.S. household wealth, according to BofA strategists, led by Michael Hartnett, who analyzed private-client equity holding and Federal Reserve data.
In fact, there has been a negative wealth effect for the top 1% of earners, which is particularly worrisome when the top 10% account for half of the U.S. consumer spending, based on that data.
Consumer spending matters to how the economy is doing because spending by households and individuals accounts for about two-thirds of GDP. Early data show that the economy slowed down in the first quarter, but investors will know more on April 30 when fresh GDP numbers are released.
How much money people spend can also affect their mood, or sentiment, which has been especially in the dumps as of late. The latest example for that came Friday when the University of Michigan’s final index of consumer sentiment for April fell to 52.2 from 57 in March.
Bad sentiment isn’t good, but in and of itself, it isn’t a cause to run for the hills either, in my opinion. Until that sentiment actually impacts spending behavior in a dramatic way, the economy is going to be OK. And recent bank earnings show that credit and debit card spending is holding up.
It could be the case that the sentiment is being affected more so by the growing wealth inequality. The stock market’s exuberant gains in the past two years minted billionaires in 2024 at a greater pace than ever before, but those who are less well to do are more likely to not own any stocks, meaning they didn’t get to share in this economic prosperity.
That means that a great amount of wealth is consolidated within a small group of individuals, who will have a never-seen-before command over the economy’s fate.
For now, maybe let’s not eat the rich.
Share your thoughts
What do you make of the growing wealth gap? Click here to send us your response.
📧✍️Here’s what a reader commented📧✍️
Question: What other positive signs are keeping you optimistic during these tough times?
Answer: Other positive signs= We all believe in Trump, it’s really that simple. God didn’t save him to mess up America.
Catch up with FS Insight
Friday’s close above 5,491 for S&P 500 is the 5th confirming signal of a low and odds favor a V-shaped recovery led by washed out stocks like Tesla, Nvidia, and MicroStrategy.
Technical
Gains in U.S. equities this week represent the start of the much-needed first push off the lows, which helps to make the strong technical case that our early April lows likely constitute a meaningful bottom for U.S. equities.
Crypto
Head of Crypto Strategy Sean Farrell is on vacation.
News We’re Following
Breaking News
- Treasury Secretary Bessent says it’s up to China to de-escalate trade tensions CNBC
- Kremlin Says Putin Ordered a 3-Day Cease-Fire in Ukraine for Next Month NYT
- Conclave to elect a new pope will start on May 7 as cardinals get to know one another AP
Markets and economy
- America Inc. Slashes Spending as Tariff Uncertainty Swirls WSJ
- Agriculture isn’t nearing trade war tariffs crisis, ‘it is full blown crisis already’ farmers say CNBC
Business
- Why Trump can’t build iPhones in the US FT
- Spotify Has Paid More Than $100 Million to Podcasters To Take On Competitors NYT
- Domino’s U.S. same-store sales slip as cooling economy chills pizza maker’s profit MW
Politics
- Elite Universities Form Private Collective to Resist Trump Administration WSJ
- Voters on How Trump Has Already Changed Their Day-to-Day Lives WSJ
- Trump took the US economy to the brink of a crisis in just 100 days CNN
- Hispanics helped Trump retake the White House. Now their support is waning. RT
Overseas
- Canadians vote in an election dominated by Trump’s trade war and bluster AP
- China says it can live without US farm and energy goods FT
- India’s 110% Car Tariffs Become Harder to Defend in Trump Era BBG
Of Interest
- Gen Z is leading the charge back to the office FT
- Japan’s Nintendo fans test Switch 2 ahead of launch amid tariff worries RT
| Overnight |
| S&P Futures -5
point(s) (-0.1%
) Overnight range: -34 to -1 point(s) |
| APAC |
| Nikkei +0.38%
Topix +0.86% China SHCOMP -0.2% Hang Seng -0.04% Korea +0.1% Singapore -0.31% Australia +0.36% India +1.2% Taiwan +0.81% |
| Europe |
| Stoxx 50 +0.78%
Stoxx 600 +0.73% FTSE 100 +0.41% DAX +0.75% CAC 40 +0.9% Italy +0.69% IBEX +0.8% |
| FX |
| Dollar Index (DXY) +0.13%
to 99.6 EUR/USD -0.09% to 1.1355 GBP/USD +0.27% to 1.3351 USD/JPY -0.2% to 143.38 USD/CNY +0.14% to 7.2971 USD/CNH +0.13% to 7.2979 USD/CHF +0.11% to 0.8293 USD/CAD +0.01% to 1.3865 AUD/USD +0.11% to 0.6402 |
| Crypto |
| BTC +0.58%
to 94851.61 ETH +0.47% to 1811.62 XRP +2.57% to 2.3422 Cardano +1.29% to 0.7221 Solana +2.04% to 151.82 Avalanche +2.21% to 22.21 Dogecoin +0.06% to 0.1816 Chainlink +1.89% to 14.97 |
| Commodities and Others |
| VIX +2.21%
to 25.39 WTI Crude -0.24% to 62.87 Brent Crude -0.21% to 66.73 Nat Gas +1.09% to 2.97 RBOB Gas -0.2% to 2.115 Heating Oil -0.02% to 2.167 Gold -1.22% to 3279.32 Silver -0.62% to 32.91 Copper -0.55% to 4.814 |
| US Treasuries |
| 1M +1.2bps
to 4.2697% 3M -1.3bps to 4.2782% 6M +0.5bps to 4.195% 12M -2.4bps to 3.918% 2Y +2.0bps to 3.7684% 5Y +3.1bps to 3.8906% 7Y +3.1bps to 4.0699% 10Y +2.9bps to 4.2642% 20Y +1.9bps to 4.7372% 30Y +1.3bps to 4.7139% |
| UST Term Structure |
| 2Y-3
M Spread widened 0.2bps to -56.2
bps 10Y-2 Y Spread widened 1.0bps to 49.4 bps 30Y-10 Y Spread narrowed 1.4bps to 44.8 bps |
| Yesterday's Recap |
| SPX +0.74%
SPX Eq Wt -0.14% NASDAQ 100 +1.14% NASDAQ Comp +1.26% Russell Midcap flat R2k flat R1k Value flat R1k Growth flat R2k Value flat R2k Growth flat FANG+ +1.7% Semis +1.44% Software +1.67% Biotech -0.79% Regional Banks -0.92% SPX GICS1 Sorted: Cons Disc +1.96% Tech +1.62% Comm Srvcs +1.02% SPX +0.74% Healthcare +0.51% Indu +0.01% Energy -0.11% REITs -0.13% Cons Staples -0.24% Utes -0.38% Fin -0.42% Materials -0.73% |
| USD HY OaS |
| All Sectors -0.3bp
to 415bp All Sectors ex-Energy +0.3bp to 374bp Cons Disc -0.5bp to 411bp Indu -0.2bp to 314bp Tech -2.2bp to 404bp Comm Srvcs -1.4bp to 598bp Materials -6.9bp to 397bp Energy +3.1bp to 444bp Fin Snr -3.7bp to 345bp Fin Sub +0.6bp to 287bp Cons Staples +19.1bp to 285bp Healthcare -1.9bp to 421bp Utes +0.6bp to 282bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 4/29 | 10AM | Apr Conf Board Sentiment | 87.6 | 92.9 |
| 4/29 | 10AM | Mar JOLTS | 7500.0 | 7568.0 |
| 4/30 | 8:30AM | 1Q ECI QoQ | 0.9 | 0.9 |
| 4/30 | 8:30AM | 1Q A GDP QoQ | 0.4 | 2.4 |
| 4/30 | 10AM | Mar PCE m/m | 0.0 | 0.3 |
| 4/30 | 10AM | Mar Core PCE m/m | 0.1 | 0.37 |
| 4/30 | 10AM | Mar PCE y/y | 2.2 | 2.5 |
| 4/30 | 10AM | Mar Core PCE y/y | 2.6 | 2.78871 |
| 5/1 | 9:45AM | Apr F S&P Manu PMI | 50.7 | 50.7 |
| 5/1 | 10AM | Apr ISM Manu PMI | 48.0 | 49.0 |
| 5/2 | 8:30AM | Apr AHE m/m | 0.3 | 0.3 |
| 5/2 | 8:30AM | Apr Unemployment Rate | 4.2 | 4.2 |
| 5/2 | 8:30AM | Apr Non-farm Payrolls | 130.0 | 228.0 |
| 5/2 | 10AM | Mar F Durable Gds Orders | 9.2 | 9.2 |