Weekly house view | The clock is ticking
The week in review
US President Donald Trump extended his deadline for Iran to open the Strait of Hormuz by 10 days to 6 April after saying talks are “going very well”. The war nonetheless escalated, as did its economic impact. Tehran’s firing of two missiles at Diego Garcia, a joint US-UK military base 2,500 miles from Iran, put Europe on notice. Highlighting the damage to infrastructure, two of Iran’s largest steel factories suffered strikes and two Middle Eastern aluminium producers were hit by Iranian attacks. Trump said his “preference would be to take the oil” in Iran. A meeting between Trump and Chinese President Xi Jinping was rescheduled for 14 and 15 May, delayed due to the war. In the Eurozone, the fallout from the conflict showed up in data, with purchasing managers’ indices (PMI) indicating a near-stalling of the economy in March and rising price pressures.
The S&P 500 fell for the fifth week in a row, down 2%1 (in USD). In the private credit market, Apollo Global Management limited redemptions from one of its flagship private credit vehicles, yet JPMorgan was able to place USD 15 bn of debt for the leveraged buyout of Electronic Arts, showing the biggest problem in the sector is a liquidity issue. In the artificial intelligence sphere, Google's announcement of its TurboQuant algorithm, which drastically reduces AI model memory requirements, led to a sharp sell-off in memory semiconductor stocks.
Quote of the week
“We’re going to have to find him some space in the White House,” Trump joked of Federal Reserve Chair nominee Kevin Warsh, in a critique of the renovation costs at the Fed building under incumbent Chair Jerome Powell.
Key data
Eurozone consumer confidence fell this month to its lowest level since late 2023, dropping to -16.3 from a revised -12.3 in February. The euro area composite PMI dropped to a 10-month low of 50.5 in March, mainly due to weaker services activity, while manufacturing stayed stable.
Despite US consumer sentiment falling more than expected in March, the Redbook measure of retail sales showed they were still strong late this month. The US global services PMI for March registered 51.1, just below expectations.
