Despite flocks of Chicken Littles exclaiming that the sky was going to fall and crush us all. The sky didn’t fall, and once again the mainstream media narrative that everything was going to be bad, terrible and worse. Proved to be just more misinformation.
The major averages completed another solid week. The S&P 500 advanced 298 points or 5.27%, the NASDAQ jumped 1,282 points or 7.15% while the DOW gained 1,406 points or 3.41%.
Despite the dramatic market sell off that followed Liberation Day. Endless proclamations of a devastating tariff induced trade war hit the headlines. Predictions of global recession quickly followed, as the markets plunged.
How Quickly Things Change
6 short weeks later the S&P 500 and the DOW are both up year to date, while the NASDAQ trails by just .52%. Q-1 earnings growth has gone from weak single digits to a second consecutive quarter of double-digit earnings growth. Try as I might to find hard evidence of a recession, imminent or otherwise, the data remains elusive. Even the container ship traffic data with China shows little if anything to worry about. As the chart below shows. Compliments of Bloomberg and Deutsche Bank.
That’s A Big If
The last remaining argument of any validity is that the Trump induced trade war was going to cripple foreign investment. That our trading partners would go from being willing net buyers of our debt. Aka Treasury bonds, bill and notes, into net sellers. There was some very limited anecdotal evidence that this might be the case in April. But the definitive answer would come from the Treasury’s own TIC report. Treasury International Capital report, that runs with a 2-month lag.
Show Me the Report
May 16th saw the release of the TIC Report for March 2025 and the sky didn’t fall. While not April, which is when all the excitement happened. The March report is one of the strongest TIC Reports I have seen in quite some time. Data from the Treasury shows that foreigners remained not only willing buyers of our debt. Their also keen to continue investing in America. In fact, based on the March data they remain positively enthusiastic about it. With net foreign private inflows of $259.2 billion, and net foreign official outflows of just $4.9 billion in March. According to the latest Treasury data. Also of note Treasury bills remained very popular as foreigners increased their holdings by an impressive $98.3 billion. Next month we will get the TIC data for April, which is when the rubber really hits the road. Based on anecdotal data currently available I would expect another strong TIC report.
Last Week’s Post: A Positive Return
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