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1. Turnaround Tuesday on Wall Street.

It was a typical “turnaround Tuesday” for stocks, which started low but closed out a volatile session in the green.

All eyes turn to the economic data ahead of today’s “Liberation Day,” where President Donald Trump is expected to announce a set of tariffs that he says “will free the U.S. from a reliance on foreign goods.” The reciprocal tariffs are expected to match the duties of other countries charge on U.S. products.

However, the uncertainty continues to hurt consumer and business confidence, with Bloomberg’s Joe Weisenthal pointing to “one of the ugliest, most stagflationary ISM-manufacturing reports we’ve seen in a long time.”

Clearly, the recent technical bounce and longer-term fundamental issues are making this a tough market to read.

2. Yardeni, the biggest bull on Wall Street, cuts his S&P 500 target again on growing recession risks.

“A happy outcome would be that the US would negotiate tariff reductions, but that won’t happen if the US slaps a 20% tariff on all imports across-the-board,” Yardeni wrote in a note to clients on Monday.

Over the weekend, Yardeni reduced the odds of the firm’s “Roaring 2020s” base-case scenario from 65% to 55% and raised the odds of a stagflationary scenario from 35% to 45%, which includes the possibility of a shallow recession later this year.

“We are currently targeting S&P 500 ranges of 5100-6000 this year and 5950-7000 next year. In our base-case, the S&P 500 would end the year at 6000, a small gain on a year-over-year basis and 7000 at the end of next year.”

3. European banks enjoyed their best quarter in over four years, making them the biggest gainers year-to-date.

4. Regionally, we’re seeing strong inflows into Europe, India and Japan.

5. Growing evidence of a Chinese turnaround.

As of 30 March, 93% of MXCN index market cap (373 out of 580) had reported 4Q24 results.

So far, 4Q24 EPS has risen by +22.8% y-y!

After 13 consecutive quarters of sizable earnings misses, we see an earnings inflection.

Source: MSCI, Bloomberg, RIMES, FactSet, Morgan Stanley Research.

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