1. No turnaround Tuesday, maybe a winning Wednesday?

“Trump closely watches market performance, making it likely that he will use policy “off-ramps” to prevent excessive market declines.”

Evercore ISI analysts warned in a note that stagflation fears are mounting, with tariff policies and economic uncertainty creating potential downside risks for the S&P 500. While Evercore’s base case projects the index reaching 6,800 by the end of 2025, they believe a scenario where GDP slows below 1.5% and core PCE inflation surpasses 3% could push the market toward their bear case of 5,200.

Meanwhile, the S&P and Nasdaq are in oversold territory and a relief rally will follow soon.

But if the stock market wants to make a sustainable comeback in 2025, Trump needs to stop the tariff wars. The uncertainty in the economy is causing consumers and businesses to slow down significantly as they await more clarity on the future of policy and the economy.

2. “Be greedy when others are fearfull”.

3. Eurozone short term looks overbought.

The newsflow for Eurozone has been strongly positive over the past weeks, but it might be getting exhausted. The European implementation risks will be real, and more challenging than the headline announcements suggest, in our view.

Eurozone equities now appear overbought vs the US short term.

In terms of valuations, Eurozone forward P/E has rerated from the lows 2 years ago of 11x to the current 15x, not that cheap anymore.

The green line is the average P/E over the last 20 years.

4. Less US “exceptionalism” is helping the “International/Value” trade.

5. EU defense push could boost Europe's economy.

As part of its suggested ReArm Europe plan, the European Commission plans to free member states from deficit rules, hoping to create €650 billion in additional fiscal space over a period of four years.

While that sounds like a huge additional burden on Europe’s struggling economy, experts are pointing out that the planned increase in defense spending could even boost Europe’s economic growth.

That is if the additional spending is largely debt-financed and used to foster domestic research, development and production rather than just purchasing armaments from abroad.

An increase of defense spending from just under 2 percent to 3.5 percent of GDP would cost around €300 billion annually, Moritz Schularick, President of the Kiel Institute for the World Economy says.

If spent correctly, this sum could generate a similar amount of additional economic activity, he argues.

The suggested increase in spending could result in 0.9 to 1.5 percent GDP growth, Ilsetzki’s analysis finds, which would be highly welcome, considering that the bloc's aggregate GDP grew by just 0.9 percent in 2024.

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