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1. The pan-European Stoxx 600 outpaced the S&P 500 by nearly 17% percentage this quarter.

The rally — a surprise given expectations that Donald Trump’s “America First” agenda would have the opposite effect — has left both skeptics and bulls asking if this is the start of a lasting revival, or just a fleeting moment.

“We have been waiting for a long time for this sentiment to change,” said Daniel Nicholas, a client portfolio manager at Harris Associates, whose firm has had a large exposure to the region since the euro-area debt crisis.

“European companies have been mispriced.”

Germany’s plan to ramp up defense and infrastructure spending has changed the landscape for investors, who spent the first three months of the year unwinding underweight positions in Europe. Bank of America’s March fund manager survey showed they had moved to a net 39% overweight in Europe, the most in almost four years. Regional stock funds have seen $21 billion of inflows this year through mid-March, according to EPFR Global. Germany has been the big winner. Its benchmark DAX Index has soared 13%, and recent ETF data from iShares show flows are largely concentrated in the country’s assets.

“The rally can go on for a bit. On a three-to-six month basis, Europe is attractive,” said Jean Boivin, head of the BlackRock Investment Institute.

2. The countries most vulnerable to U.S. car tariffs.

While it’s no surprise that foreign carmakers saw their share price drop in response to the tariff announcement, the fact that U.S. companies were equally affected – General Motors fell 7 percent last week, Ford almost 4 percent – may have taken some people aback.

After all, aren’t the tariffs designed to protect the U.S. automotive industry?

Well yes, but even U.S. car manufacturers rely heavily on imported parts and on assembly in Canada and Mexico – making them at least as vulnerable to the new tariffs as actual foreign carmakers.

3. Goldman slashes S&P target again on tariff turmoil.

Trump said he plans to start his reciprocal tariff push with “all countries,” tamping down speculation that he could limit the initial scope of levies set to be unveiled April 2. The president has said the tariffs will be “lenient,” but investors are on guard given the lack of specifics.

The S&P is on track for its worst first-quarter performance in five years, and Goldman strategists don’t see things improving much this year.

David Kostin cut his S&P target for a second time this month, and now expects the benchmark to end the year at around 5,700 points, implying a gain of just 2% from Friday’s close.

Goldman economists now forecast three Fed cuts this year and sees a 35% chance of a recession in the next 12 months, compared to prior expectations of 20%.

4. The trend is your friend—until it isn’t.

If the air keeps coming out of the Magnificent Seven stocks then 2025 might be one of those years when “momentum” disappoints.

“Value” works because it’s logical to buy low and sell high.

“Quality” does well because well-managed companies tend to survive crises and are more profitable

“High dividend-paying stocks” thrive because you at least get cash, and they tend to have reasonable valuations.

However, while value investors tend to be patient by necessity, momentum investors might not be. Many didn’t arrive at the strategy through careful study of what has worked before. Essentially, you buy more of what just went up. Many successful strategies require both analytical chops and discipline. Following the crowd is already human nature and is a feature of bubbles.

Source: WSJ

5. Gold hits another all-time high and goldminers are outperforming gold year-to-date.

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