Is it time for QT tapering? US equities continue to outperform 30-year US Treasuries and where are all the US listed companies going? Each week, the Syz investment team takes you through the last seven days in seven charts.

The latest FOMC meeting delivered a mixed message that caught markets off guard. Chair Powell acknowledged enduring inflation challenges while outlining a dovish path forward with an anticipated shift towards monetary normalization by year-end coupled with a reduction in quantitative tightening starting June 1st. This dual approach prompts questions about the Fed's strategy to remain restrictive yet assist the Treasury with an unprecedented supply surge (#monetization).

After a volatile week, the main US equity indices ended in positive territory thanks to a strong rally on Friday after a softer-than-expected April jobs report boosted hopes that the Fed could start cutting interest rates soon. Overall, US data have been surprising on the downside recently and markets are now pricing in two full Fed rate cuts in 2024 and three more cuts in 2025. Over the week, growth stocks outperformed value shares and small-caps outpaced large-caps. It was the 2nd-busiest week of Q1 earnings reports and a positive reception to Apple’s earnings release after the close of trading on Thursday seemed to help drive a rebound in overall sentiment.

Annual US debt interest spending is surging sharply, while Japan faces increasing inflation expectations alongside a persistent decline in the yen's value. Each week, the Syz investment team takes you through the last seven days in seven charts.

This week, all eyes are on the Federal Reserve as it unveils its latest monetary policy decisions, faced with the complex challenge of addressing an uptick in inflation amidst signs of an economic slowdown. This comes in the wake of a significant shortfall in 1Q US GDP, further complicating the Fed's policy trajectory as it navigates between sustaining growth and controlling price levels.

US equities managed to snap a string of three weekly losses. Earnings took center stage with the spotlight on the Magnificent 7 stocks. Despite the high bar, companies have so far been able to beat expectations, helping the S&P 500 recover half of its April losses. The Nasdaq outperformed, up 4% on the week (its best week since the start of Nov 2023), helped in part by strength in Apple and a late rebound in chipmaker NVIDIA. Shares in Google parent Alphabet also surged in the week following its announcement of better-than-expected Q1 earnings along with the company’s first dividend payment. The Dow was the laggard. On the Macro side, the US economy expanded at an annualized rate of 1.6% in Q1, well below consensus estimates of around 2.5% and the slowest pace of growth in nearly two years.

The yen continues to plummet, France's debt-to-GDP gap with Germany widens further and Zoom goes boom! Each week, the Syz investment team takes you through the last seven days in seven charts.

Global government bonds endured another tough week, weighed down by central banks' hesitance to swiftly normalize monetary policies, solid economic data, and intensifying geopolitical tensions. Amid these headwinds, the perception of fixed income as an unloved asset grows stronger. Consequently, the Bloomberg Global Aggregate Index has fallen 4.25% year-to-date, suffering its harshest start in over three decades, second only to 2022.

Stocks recorded broad losses, as concerns over tensions in the Middle East and the possibility of U.S. interest rates remaining “higher for longer” appeared to weigh on sentiment. Mega-cap technology shares lagged as rising rates placed a higher theoretical discount on future earnings. A Q1 revenue miss from ASML Holdings also seemed to weigh on the sector and on general optimism toward companies with AI-related earnings. Some strong economic data (e.g retail sales +0.7% vs. 0.3% expected) appeared to increase worries that the Fed would push back any interest rate cuts to the fall, if not to 2025. Conversely, downward surprises in housing market data may have furthered inflation fears by auguring continued supply tightness. As was the case last week, Fed officials expressed their concern with recent economic data.

US inflation is accelerating, federal debt is projected to double from $20 trillion in 2017 to $40 trillion by 2025, but the S&P 500 continues to show resilience. Each week, the Syz investment team takes you through the last seven days in seven charts.