Syz the moment

The ZEW Institute’s expectations index plunged to -14 in April, down from 51.6 in March – a massive drop. Analysts surveyed by Bloomberg had expected a decline, but only to +10. The unpredictable shifts in US trade policy have fuelled global uncertainty, which is now weighing heavily on economic expectations in Germany. At the same time, any initial optimism about the new government's spending plans has quickly faded. Source: HolgerZ, Bloomberg

▶️ British retailers have warned that Chinese companies risk flooding the U.K. with low cost goods, as U.S. President Donald Trump’s tariffs choke off access to the world’s largest consumer market. ▶️“Retailers are very concerned about the risk of some lower quality goods being rerouted from the US to Europe as a result of the tariffs,” said Helen Dickinson, chief executive at the British Retail Consortium. ▶️Analysts said that risk was especially pronounced among Chinese producers selling via online marketplaces such as Amazon, Shein and Temu. Source: CNBC

Per Reuters, the results were well below analysts’ expectations of 2% growth, as the conglomerate struggles to buoy amid the ongoing luxury slowdown. The group’s key fashion and leather goods division, which houses heavyweight names like Louis Vuitton, LOEWE, Dior, and Fendi, saw sales fall 5%. Notably, analysts forecasted a 0.55% decline in the category, which makes up 75% of LVMH’s overall profit. Elsewhere, the company’s wine and spirits division saw sales decline by 9%, while perfume and cosmetics both dropped by 1%. Watches and jewelry, meanwhile, remained constant. The cause of such sluggish numbers is one part caused by post-pandemic spending fatigue, another the product of high inflation rates, and a third the product of a slowing economy, mounting debt crisis, and real estate crash in China, a target market for high-end labels. In the US, President Donald Trump’s tariff announcements have eliminated any hopes that American shoppers would spend more on luxury this year. Source: Quartr, Hypebeast

Source: Bloomberg, Lisa Abramowicz

According to Goldman Sachs, the Dax and MDax have a beta of 1.9 to world trade growth — meaning they tend to move almost twice as strongly w/changes in global trade. That’s much higher than the US market, which has a beta of 1.4. In contrast, the UK’s FTSE 100 is less exposed to global trade, thanks to its defensive sector mix and the UK’s services-driven economy. The Swiss SMI is similarly more insulated. It’s also a defensive index, and Swiss exports are generally less sensitive to global demand, as they often consist of high-tech, specialized products. Source: HolgerZ, Goldman Sachs

Source: The Economist

👉 With Trump slapping 25% tariffs on EU cars and threatening more, Brussels is plotting a counter strike — and this time, it’s not just bourbon and blue jeans on the line. 👉 EU officials are eyeing U.S. services exports, including Big Tech and intellectual property, as leverage — think blocked patents, frozen software updates, and Starlink losing out on juicy contracts. 👉EU diplomat: “The Americans think that they are the ones with escalation dominance, but we also have the ability to do that,” Source: FT thru Mario Nawfal on X

In 2024 the world's 3rd largest economy FELL by 0.2% following a 0.3% decline in 2023. This is the 2nd time since 1950 that GDP contracted for 2 years in a row. German IFO Economic Research Institute expects just 0.2% growth in 2025. Source. Global Markets Investor