MyStratWeekly – April 29th 2025

Topic of the week: Emerging Markets: What to Except After the Resilience and Surprises of "Liberation Day"?

• Despite high political and economic uncertainty caused by tariffs and trade tensions, emerging markets have been resilient during the sell-off;
• The unexpected weakness of the dollar has been their main advantage, although overall resilience masks disparities between countries;
• The deterioration of global economic outlooks is likely to put highly indebted countries under pressure: the spread differential between "High Yield" and "Investment Grade" has widened;
• The significant uncertainty caused by tariffs risks keeping financial market volatility high, leading to a revaluation of risk premiums for emerging markets;
• A sustained drop in oil (and commodity) prices poses a risk to producers with high oil fiscal breakeven prices and significant financing needs.

Market review: It’s all tariff-on, tariff-off…

• Trump hints at a reduction in tariffs and suggests that Powell will serve out his term;
• Rates: Rhetorical easing allows the T-note yields to dip below 4.25%;
• Markets rebound following Trump's shift in policy;
• The Nasdaq surged 6.7% last week ahead of the earnings reports from major U.S. companies.

Axel Botte and Zouhoure Bousbih’s podcast:

• Review of the week – Trump backs down;
• Theme – Emerging Markets: What to Except After the Resilience and Surprises of "Liberation Day"?

Chart of the week

Donald Trump's approval rating, at 40% in April according to Gallup, is lower than that of previous American presidents since Ronald Reagan at this point in their terms.

The current occupant of the White House is performing worse than Bill Clinton did in 1993, as Clinton did not secure majority approval during his first 100 days in office.

Trump's policies are viewed negatively by most Americans, particularly his tariff policy and cost-cutting measures within the federal government. His transgressions of federal laws are also being criticized.