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1. The GOAT rebound.

Now that’s a rebound. The market printed green seconds after President Trump tweeted that he was pausing tariffs on nearly every country with a tariff rate over 10%.

It wasn’t all good. China tariffs were raised to 125%, placing tech import firms like Apple in a losing trade position. The largest trading partners, Canada, Mexico, and most likely the EU, still face higher tariffs, but the market did not seem to care.

While Goldman Sachs analysts cut their recession likelihood, there is still a risk: the world has 90 days to negotiate with Trump, or the levies will come back.

Bill Gross asks “would you want to own highly volatile US stocks whose price depends on whether POTUS had a good night’s sleep and woke up the next morning to reverse yesterday’s policies?

Meanwhile, the Eurostoxx future is up more than 7% this morning.

2. Net positioning across asset managers and hedge funds remains elevated.

Investors have much higher exposure to S&P 500 futures than at many prior market lows. Retail investors keep buying.

Source: Bloomberg, CFTC, Morgan Stanley Research

3. Regional tariff exposures.

The ratio of goods exports to GDP is the most important metric to assess which economies could face more downward pressures on growth from US tariffs.

This suggests China, Taiwan, Korea, Malaysia, Thailand, Hong Kong, and Singapore look most at risk, while India, Philipines and Japan look good.

4. Pharma is cheap.

The Stoxx 600 Health Care Index is down about 17% since the market peaked in early March, underperforming both the broader benchmark and other defensive sectors such as utilities and consumer staples.

They’ve been hit especially hard after US President Donald Trump said he may soon slap tariffs on pharmaceuticals.

Valuations in the industry have fallen to the lowest since 2013 and its forward price-to-earnings multiple of 14 is about 20% below its 10-year average.

Susana Cruz, a strategist at Panmure Liberum, sees the medical equipment sector as hardest hit among health-care stocks, given limited options to move production. “Big Pharma can still be a safe option,” she says. It “has more resilience, with the flexibility to relocate production and higher margins to cushion the blow.”

At Barclays, analysts including Emily Field say that large-cap phama could come back as a defensive play if the economy worsens. That’s because earnings are likely to hold up better than other industries since consumers are unlikely to give up their medicines — even in a recession.

5. S&P 500’s earnings growth outlook is falling, tariff pause or not.

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