Macroeconomic Weekly Report: The market is caught in a game of expectations, and the trend still requires more data support

1. Macroeconomic Review of This Week

1. Market Overview

This week, market sentiment is in a phase of sluggishness. The S&P 500 Index has fallen below its 200-day moving average, triggering large-scale sell-offs by CTA strategies. The VIX index remains above 20, and the Put/Call ratio has risen, reflecting a significant level of market panic. The cryptocurrency market is only mildly stimulated by positive news, with an overall noticeable contraction in risk appetite.

2. Economic Data Analysis

The manufacturing PMI new orders index has fallen below the threshold, and the employment index is below expectations, indicating that the manufacturing sector is becoming cautious due to tariff impacts. The non-manufacturing PMI exceeded expectations, suggesting that the service industry is relatively robust. GDP forecasts have been revised down to -2.4%, mainly due to net export drag, while consumer spending remains stable. Employment data is divergent, with a slight increase in the unemployment rate, a slowdown in job growth, limited wage growth, and companies tending to extend working hours rather than create new positions.

3. Monetary Policy and Liquidity

The Federal Reserve Chairman stated a tendency to wait for clarity on tariff policies. He insists on a 2% inflation target, stating that a short-term increase in inflation will not prompt interest rate hikes. He believes the economic fundamentals are stable, but the ongoing slowdown in employment may increase the possibility of rate cuts. The marginal improvement in broad liquidity of the Federal Reserve is noted, but market sentiment remains weak. Short-term financing rates are decreasing, and the market is betting on future rate cuts, while the yield on 10-year treasury bonds has turned upward, alleviating recession expectations.

2. Macroeconomic Outlook for Next Week

The market is still in the expectation game stage, with an unclear trend, and institutional funds are more inclined to wait and see. It is difficult to form a clear direction in the short term. Attention needs to be paid to the micro changes in economic data from March to April, as the impacts of tariffs, government layoffs, and interest rates have a lagging effect, and the confirmation of market trends requires more data support.

One should not be overly pessimistic, as the economy has not significantly deteriorated. It is advisable for investors to manage their positions well, maintain a balance between offense and defense, and wait for clearer trend signals.

Next week, pay attention to key data such as CPI, PPI, and consumer confidence index to assess changes in inflation and consumption trends.