Dusted off a hopeful anecdote from 15 years ago, from around the time I started publishing, back when the world was still healing from the GFC, and Europe was yet to fully realize the depth of its debt crisis. It feels like we’ve got a long road to travel to get to the other side of our latest turmoil, so much of it self-inflicted, senseless. But there’s always the underlying force of humanity’s desire to make the world a better place for our children.
Happy Easter. See you next Sunday, E
Week-in-Review: Mon: NY Fed’s survey shows stable long-run inflation expectations. Fed’s Waller warns should Trump resume steep duties, growth will ‘slow to a crawl’. US takes step towards chip and pharma tariffs with new probes. EU to give €1.6bn to Palestine amid Israel’s expanded Gaza offensive. Trump administration halts $2.2bn in Harvard funds after university defies pressure. Singapore GDP 3.8% (4.6%e), S&P +0.8%. Tue: Xi urges Vietnam to oppose Trump’s tariff ‘bullying’. US envoy calls for Iran to ‘eliminate’ uranium enrichment program. EU officials say US wants to retain key tariffs on EU. JD Vance predicts ‘good chance’ of US-UK trade agreement. French PM Bayrou pushes for clean-up of public finances, risking a vote of no confidence if parliament objects to budget cuts. EU explores legal options for ending Russian gas deals. JPM’s Dimon urges US to engage with China, adding that trade war would challenge US credibility. Trump threatens to scrap Harvard’s tax-exempt status. Thousands of Israeli military reservists call for deal with Hamas. Members of UK’s largest Jewish body condemn Israel’s offensive in Gaza. UK Unemp rate 4.4% as exp, France CPI 0.8% as exp, India CPI 3.34% (3.50%e), US Empire mfg -8.1 (-13.5e), Canada CPI 2.3% (2.7%e), China GDP 5.4% (5.2%e), China Ret sales 5.9% (4.3%e), China IP 7.7% (5.9%e), S&P -0.2%. Wed: Fed’s Powell doubles down on tariffs justifying Fed caution for now. Trump ratchets up pressure on Fed chair Powell to cut rates. Governor Newsom says California to sue over Trump tariffs. WTO estimates that Trump’s baseline 10% tariffs will reduce North American exports by 13%. Trump curbs to chips exports to China lead to a $5.5bn impairment at NVDIA. US places sanctions on Chinese refinery over Iran oil purchases. Israel says army ‘is not evacuating areas that have been cleared and seized’. Trump administration halts Equinor’s $5bn New York wind energy project. UK CPI 2.6% (2.7%e) / core 3.4% as exp / RPI 3.2% as exp, Eurozone CPI 2.2% as exp / core 2.4% as exp, S&P -2.2%. Thur: ECB cuts rates to 2.25% and signals risks to growth outlook. Saudi Arabia’s defense minister visits Iran ahead of US talks. Trump says US will ‘100%’ strike trade deal with EU in meeting with Italy’s Meloni. Beijing eyes rapprochement with Brussels to compensate for loss of US market but significant hurdles remain. Europe’s center-right calls for softening of 2035 green car zero-emissions target. Nvidia chief Jensen Huang flies to Beijing for talks with Chinese vice-premier and DeepSeek founder. US and Ukraine sign memorandum of intent on minerals deal. Blackstone president warns US risks recession without trade deals. Turkey’s central bank raises interest rate to 46%. Eurozone Deposit facility rate 2.25% as exp / refinancing rate 2.4% as exp / marginal lending facility 2.65% as exp, US Housing starts 1324k (1420k e), US Jobless claims 215k (225k e) / cont. claims 1885k (1870k e), S&P +0.1%. Fri: President Trump and his team are reportedly studying ways to fire Federal Reserve Chair Powell. State Sec. Rubio says Trump will abandon Ukraine peace talks ‘in days’ without progress. China stops buying LNG from the US. US says Chinese company is helping Houthis target American warships. US plans to impose steep fees on Chinese ships alarm farmers and exporters. US strikes Yemeni port controlled by Houthi, killing dozens of people. US House China committee writes to JPMorgan and BofA to ask them to halt work on CATL IPO. S&P closed. Sat: Supreme Court halts US deportations. Reports that Bessent/Lutnick took advantage of Navarro’s absence to persuade Trump to delay tariffs. Wall Street banks slash S&P 500 price forecasts (consensus now +2% from here by year end).
Weekly Close: S&P 500 -1.5% and VIX -7.91 at +29.65. Nikkei +3.4%, Shanghai +1.2%, Euro Stoxx +4.0%, Bovespa +1.5%, MSCI World +0.1%, and MSCI Emerging +2.2%. USD rose +0.3% vs Turkey, +0.2% vs Indonesia, and +0.1% vs China. USD fell -3.0% vs Mexico, -2.9% vs Bitcoin, -2.1% vs Ethereum, -1.8% vs Russia, -1.7% vs Sweden, -1.7% vs South Africa, -1.6% vs Sterling, -1.4% vs Australia, -1.0% vs Brazil, -0.9% vs Yen, -0.8% vs India, -0.6% vs Chile, -0.3% vs Euro, and -0.2% vs Canada. Gold +2.6%, Silver +1.8%, Oil +5.2%, Copper +4.8%, Iron Ore +0.2%, Corn -1.4%. 10yr Inflation Breakevens (EU flat at 1.73%, US flat at 2.24%, JP -2bps at 1.27%, and UK +7bps at 3.19%). 2yr Notes -16bps at 3.80% and 10yr Notes -17bps at 4.33%.
2025 Year-to-Date Equity Index Returns: Poland +30.4% priced in US dollars (+19.6% priced in zloty), Czech Republic +27.7% priced in US dollars (+16.5% priced in koruna), Greece +22.6% in dollars (+11.7% in euros), Spain +22.2% (+11.4%), Colombia +21.1% (+17.9%), Hungary +20.7% (+9.8%), Chile +19.6% (+16.5%), Austria +16.8% (+6.9%), Germany +16.3% (+6.5%), Italy +14.9% (+5.2%), Brazil +14.7% (+7.8%), Norway +12.1% (+3.2%), Ireland +12% (+2.2%), Mexico +11.9% (+7.1%), Portugal +11.1% (+1.3%), Switzerland +10.8% (+0.5%), Euro Stoxx 50 +10.6% (+0.8%), Finland +10.3% (+1%), South Africa +9.5% (+9.1%), Sweden +8.6% (-5.1%), France +8.3% (-1.3%), Belgium +8% (-1.6%), UK +7.2% (+1.3%), Korea +7.1% (+3.5%), HK +6.7% (+6.7%), Netherlands +6.4% (-3%), Israel +3.5% (+4.5%), Singapore +2.4% (-1.8%), Canada +1.7% (-2.2%), India +1.1% (+0.9%), Australia -1.1% (-4.2%), New Zealand -1.3% (-7.6%), UAE -1.5% (-1.5%), China -2.3% (-2.2%), Japan -3.8% (-12.9%), Philippines -3.8% (-6%), Saudi Arabia -3.9% (-4%), Vietnam -5.4% (-3.8%), MSCI World -6.3% in dollars, Malaysia -7.5% (-8.7%), S&P 500 -10.2%, Turkey -12.1% (-5.2%), Indonesia -12.7% (-9.1%), Taiwan -15.4% (-15.8%), Denmark -15.5% (-22.7%), NASDAQ -15.7%, Russell -15.7%, Thailand -15.8% (-17.8%), Argentina -23.4% (-14%).
Anecdote (September 2010): As a kid I’d gaze up at airplanes and wish I could be in one looking down; wondered how small I must’ve looked. Careful what you wish for, eh? Nowadays I always grab the window and peer down. Greater NY, seething with endless miles of streets, towers and traffic, boasts 19.1mm dreamers. The LA sprawl quietly creeps up the hills, pressing its luck, as 12.9mm bake in its smog. They’re the top 2 US cities; population 32mm. Hard to imagine, from up high, the work it took to build them, fuel them, keep them going. And it’s exciting to think of those 32mm struggling to build a better life for their children. Let’s face it, that’s what makes us smarter, stronger, faster; it’s the most powerful force in the world. And the Chinese, Indians, Brazilians, hell, everyone, wants a better future for their kids. In just 15yrs, 240mm young migrant Chinese will leave their huts to build families in expanding cities; that’s 8x the NY/LA population appearing by 2025. And by 2050, world population is forecast to grow 2.5bln; that’s 78x NY/LA. This build-out has no precedent in mankind’s history. Sure, some is priced in but when you look down from the sky and picture the work ahead, it’s almost unimaginable. The opportunities are equally vast for those with vision, drive, capital, know-how, and courage to take risk. So, remember, as we fret about today’s news and hide in bearish bunkers, a billion kids are standing in their dirty fields, looking up at our fancy planes, striving for a ride someday.
Good luck out there,
Eric Peters
Chief Investment Officer
One River Asset Management
Disclaimer: All characters and events contained herein are entirely fictional. Even those things that appear based on real people and actual events are products of the author’s imagination. Any similarity is merely coincidental. The numbers are unreliable. The statistics too. Consequently, this message does not contain any investment recommendation, advice, or solicitation of any sort for any product, fund or service. The views expressed are strictly those of the author, even if often times they are not actually views held by the author, or directly contradict those views genuinely held by the author. And the views may certainly differ from those of any firm or person that the author may advise, converse with, or otherwise be associated with. Lastly, any inappropriate language, innuendo or dark humor contained herein is not specifically intended to offend the reader. And besides, nothing could possibly be more offensive than the real-life actions of the inept policy makers, corrupt elected leaders and short, paranoid dictators who infest our little planet. Yet we suffer their indignities every day. Oh yeah, past performance is not indicative of future returns.