Greenbull Investments Sarl
Switzerland
7m
A significant relief rally emerged in both equity and bond markets last week as the US administration softened its stance on trade and concerns about Fed independence subsided. This positive shift suggests peak market volatility may be behind us, though challenges remain. Key developments worth monitoring: - US appears to be seeking ways to reduce tariffs, with Treasury Secretary Bessent reporting "significant progress" on deals with South Korea and India - The administration is considering cutting tariffs on Chinese imports, while - - China may exempt some US goods from their own tariffs - Market fears regarding Fed independence have cooled, with the 10-year yield returning to the middle of the expected 4.0%-4.5% range - The S&P 500 has rebounded 10% from recent lows but remains 10% below its February high Market outlook: A V-shaped recovery to previous highs seems unlikely, but risks of a deepening bear market also appear limited. Unlike prior significant downturns, today's economy shows few major imbalances – debt-service payments remain manageable, unemployment is low, and wage growth has exceeded inflation for nearly two years. Markets may remain rangebound with periodic volatility before gradually working back toward early-2025 levels. Though the S&P 500 could remain relatively flat this year, diversified portfolios should offer advantages, as international equities have maintained or widened their lead even during the US market rebound.
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