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US stocks were flat to negative despite President Donald Trump touting a potential trade deal with the European Union, without giving details or a timeline on when an agreement would be reached. Treasuries fell. Both the S&P 500 Index and the Nasdaq 100 were effectively unchanged ahead of a long holiday weekend as traders held off from making big bets. The Dow Jones Industrial Average was down 1.2%. Energy was the best performing sector as oil flirted with $65 a barrel. Treasury Secretary Scott Bessent has said he was prepared to take action to get Iran’s energy exports down to zero. 

Market calm? Sure, but realised volatility for the last month has been the 3rd highest since, guess when, the GFC and the Pandemic. And on that topic . . . . . 

With US stock prices having fallen sharply now, traders say, an unusual pattern in the stock market known as a “death cross” suggests further losses might be in store for the S&P 500 Index. A death cross occurs when an index’s 50-day moving average crosses below its longer-term 200-day moving average, a reversal of the pattern that would be typical if the market were in an uptrend. The formation tends to emerge during volatile moments in the financial markets, especially as signs of economic distress appear. There was a death cross in November 1999 during the peak of the dot-com era, and again in October 2000 after the dot-com bubble burst, and in December 2007 ahead of the global financial crisis. In recent years, the S&P 500 experienced a death cross during Covid-19 in March 2020. Another occurred in March 2022, months before the S&P 500 slumped into a bear market as the Fed battled inflation with an aggressive cycle of interest-rate increases. On April 14, the S&P 500 formed a death-cross pattern for the first time in three years. 

Meanwhile, . . . . . . Donald Trump. President Donald Trump said Federal Reserve Chair Jerome Powell’s termination from his position can’t come quickly enough, arguing that the US central bank should have lowered interest rates already this year, and in any case should do so now. Trump, derisively nicknaming the Fed chairman he nominated in his first term as “Too Late,” and that “Powell’s termination cannot come fast enough!” Trump later Thursday declined to clarify if he was demanding Powell’s removal. “If I ask him to, he’ll be out of there,” the president told reporters in the Oval Office. “I’m not happy with him. I let him know it.”  

Of course, there is a big question whether he has the authority to remove the Fed chair. The answer is no, because there is no ‘cause’ and the Chairman doesn’t have unfettered power to decide on rates (there are a couple of Supreme Court cases that have recently tested these topics). But we are talking Donald Trump. Consider this as sabre rattling regarding a push to have the Fed start to cut rates. The fact that the conversation is happening is concerning. But if the independence of the Fed was comprised / violated, look out. You’d see a level of volatility, bond markets, etc.  

Chinese President Xi Jinping promoted the idea of an “Asian family” and called for regional unity during a tour of Southeast Asia, in an apparent effort to counter US pressure on nations to limit trade ties with Beijing. Xi emphasized solidarity in a speech in Malaysia, saying “China and Malaysia will stand with countries in the region to combat the undercurrents of geopolitical and bloc-based confrontation” and “Together we will safeguard the bright prospects of our Asian family.”  

Finally, the whole point of this snippet is about how hard data may eventually catch up to a degree with soft data. The entire staff of the US Interagency Council on Homelessness (USICH) was placed on administrative leave on April 15, following President Donald Trump’s executive order targeting the council for elimination.