Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow BMO senior economist Shelly Kaushik warns that incoming economic data “don’t paint a pretty picture”, “On the eve of the election, Canadians are finally getting the first glimpse of the impact of tariffs on the hard economic data. Among the top-tier releases, the (admittedly volatile) jobs report sported a decline in employment and an uptick in the jobless rate to 6.7%. The rest of the March figures in hand are preliminary estimates, to be sure, but they don’t paint a pretty picture. The flash estimate for retail sales was +0.7%, though we expect most (if not all) of that strength came from front-running in autos ahead of those tariffs. Softness in core wholesale trade (-0.3%) and manufacturing sales (-1.9%) point to further weakness. Next up: The flash estimate for March real GDP growth, which will be published along with the February figures on Wednesday” “BMO: “A March to Remember” for Canadian economic data” – (charts, research excert) Bluesky *** J.P. Morgan strategist Mislav Matejka wonders if “the damage has already been done” to the U.S. economy, “Hard dataflow has been resilient so far this year, while soft dataflow has been pointing to weakness … Consumer surveys keep suggesting perceptions of labour market health have soured – top chart. If one is to take the exogenous COVID shock impact out, this would be the first time in 15 years, since 2010, where indicators are pointing to negative payrolls ahead. Challenger job cuts are at levels which were historically associated with recessions. In addition, surveys of inflation expectations are continuing to move up, arguing for a real income squeeze … Weekly earnings revisions keep nosediving, now the weakest in years, on par with 2020 COVID crash. In Europe, there were 40 profit warnings so far, up on last quarter, and vs a year ago, with average 1 day reaction at -9% … The “Liberation Day” extremes were unlikely ever to be implemented, but one is still likely to end up with tariff levels much higher than most expected at the start of the year … We continue to think that we would be buyers of risk sometime in 2H … Regionally, we think that International markets’ risk-reward keeps improving vs the US … US share of global equity weight is at 70%+ currently, vs sub 50% it held 15 years ago” *** Morgan Stanley Wealth Management chief investment officer Lisa Shalett recommends maximum diversification while admitting S&P 500 technicals are unappealing, “On again, off again White House policy announcements have fueled volatility and atypically positive correlations, suggesting global rebalancing and reassessment of US risk premiums. To wit, the 10- year US Treasury term premium recently surged to a decade-plus high. Curve steepening amid rising odds of a slowdown indicates investor concerns on two critical fronts: stagflation potential and debt sustainability following the ballyhooed tax bill. Grabbing the microphone, Treasury Secretary Bessent has declared trade deals and de-escalation with China imminent and Fed independence assured. While we are heartened by prospects for removal of trade and market-stability barriers, we are unconvinced that relief will immediately follow. We understand that bilateral deals with Japan and India are months away, and we continue to expect China to play hard ball. In the interim, large US companies will likely try to cut idiosyncratic deals with the White House, perpetuating the policy patchwork. With that, and absent a Fed put, small caps should continue to suffer amid persistent volatility. Consider maintaining maximum asset class, sector and regional diversification. While S&P 500 technicals are not pretty, long-term investors should view 5,100– 5,500 as a defensible entry zone as long as recession is held at bay; that said, equal weighting or active stock picking is preferred” *** Bluesky post of the day: GOLDMAN DESK: “.. the US exceptionalism trade was even more crowded than most of us had suspected. Foreign Investors own a very real amount US stocks (~18% of the entire US equity market) .. foreign investors have sold roughly $60 billion of US stocks since the start of March.” [image or embed] — Carl Quintanilla (@carlquintanilla.bsky.social) April 27, 2025 at 9:00 AM Diversion: “Student Rescued From Mt. Fuji Returns to Find His Phone, Needs to Be Rescued Again” – Gizmodo