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The United States: Recession probabilities priced into markets have increased, with small-cap stocks, bonds, and base metals signaling the highest risks. The Russell 2000 now reflects a 48% probability of contraction, up sharply from 1% in November. Meanwhile, five-year Treasuries and base metals indicate recession odds exceeding 50%, while broader equity and credit markets remain more subdued.
The Eurozone: Bund yields recorded their biggest daily increase in decades amid Germany’s fiscal shift.
The euro continues to climb.
China: Tech stocks are driving the Hong Kong market higher following Beijing’s stimulus announcement.
Energy: The new 10% tariff on Canadian energy imports is driving up costs for US refineries reliant on heavy Canadian crude, particularly in the Midwest. This has pushed gasoline futures sharply higher, even as crude oil prices decline.
Equities: Aggregate equity positioning for professional investors is still slightly above average.
Global Developments: The stock market signals a slowdown in global semiconductor sales.
Food for Thought: US missile defense assets worldwide:
Edited by William Villacis
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