Weekly Macro Report, April 12 2026

1. Economic Growth & Outlook

The S&P 500 declined 4.33% year-to-date through March 31, 2026, reversing prior gains. US GDP expanded at a 0.7% annualized rate in Q4 2025, down sharply from 4.4% in Q3, reflecting weakness in consumer spending and exports. The Federal Reserve maintained its policy rate at 3.50% to 3.75% at its March 18 meeting, projecting one rate cut in 2026 as inflation remains elevated at 2.7% and job growth has slowed, suggesting a cautious near-term outlook for growth and employment.

2. Labor Market

U.S. initial jobless claims rose to 219,000 for the week ending April 4, 2026, from 203,000 prior, missing expectations of 212,000 but remaining below late-2025 averages. Continuing claims fell 38,000 to 1,794,000, the lowest in nearly two years, signaling low firing rates. March payrolls rose 178,000 with unemployment steady at 4.3%, supporting Fed pause at 3.5%-3.75% amid balanced labor demand.

3. Interest Rates

As of April 11, 2026, the 10-year Treasury yield held at 4.29% through April 9, supporting stable funding for governments. Moody's Aaa corporate yield dipped to 5.39% on April 9 from 5.40%, easing business debt costs while boosting bond investor income. The 30-year mortgage rate averaged 6.41% on April 11, down from 6.46% last week, aiding homebuyer affordability amid persistent hurdles for households.

4. Yield Spreads

As of April 9, 2026, bond markets reflect moderate economic optimism tempered by caution. The yield curve slope stands at 63 basis points with a 10-year yield of 4.23%, suggesting 3.5% GDP growth expectations, while 10-year TIPS real yields of 1.95% indicate reasonable inflation-adjusted returns. High-yield credit spreads at 2.90% and investment-grade spreads near historic tights signal strong investor risk appetite, though moderate credit stress conditions warrant monitoring.

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5. Inflation Dynamics

As of March 2026, U.S. headline CPI rose 3.3% annually, exceeding the 2.5% OECD average, while core CPI reached 2.6%, driven by shelter at 3% and transportation services at 4.1%. PPI, which often leads CPI, showed subdued global readings with Euro Area negative and China at -2.8% in late 2024. The 10-year breakeven rate, signifying expected inflation priced into TIPS bonds, stood at 2.34% in March 2026.

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6. Money Supply

US M2 money supply grew 4.9% year-over-year in February 2026, reaching $22.67 trillion, outpacing 3.3% CPI inflation for March 2026. This expansion exceeds 2-3% real GDP growth norms, indicating inflationary liquidity conditions. Drivers include 8.9% demand deposit growth and 16.5% retail money market fund rise through mid-2025.

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7. Consumer Sentiment

University of Michigan Current Sentiment fell 10% to 50.1 in April 2026 from 55.8 in March, while Expectations dropped 11% to 46.1 from 51.7. The spread widened to -4.0, mirroring usual negative patterns amid Iran conflict fears. No yield curve data available.

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8. Housing Market

In February 2026, California median home prices fell 1.4% year-over-year to $819,200, while Los Angeles prices dropped 4.7% to $1.0M. Sales declined 1.4% statewide with 18,573 homes sold, amid 91,801 listings (down 3.9%) and 4.2 months' supply in LA County; 30-year mortgage rates hit 6.05%. Rising inventory against weak sales and elevated rates tilts supply over demand, yet high prices keep affordability out of reach for most buyers.

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9. Stock Market Sectors

As of April 9, 2026, Energy led sectors with 40.4% trailing 6-month gains amid surging oil from Middle East tensions. Consumer Discretionary and Financials lagged at -8.5% and -7.5%, hit by weak revenue and credit concerns. March's broad -5% S&P 500 drop reflected risk-off shifts, with Q1 relief rallies on de-escalation signals.

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10. Stock Market Valuation

US equity valuations stand elevated as of April 10, 2026. S&P 500 PE is 24.6, Shiller PE is 39.4, and Buffett Indicator is 230%. This yields a 55% premium to global peers like UK at 17.9 PE and EM at 13X; US mega-cap tech earnings growth sustains the gap despite international outperformance in 2026.

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11. Stock Market Internals

As of April 10, 2026, the VIX closed at 19.23, down 52.78% from 40.72 one year prior, signaling a substantial retreat in expected volatility. Quality factor investing emerged as the most consistent performer across market cycles, while the Momentum and Value combination delivered higher returns with reduced drawdowns. This compressed volatility environment paired with broad-based market internals—65% of S&P 500 constituents outperformed the index over the past 30 days—suggests a transition toward more balanced participation and reduced tail-risk concerns among investors.

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12. Global Equity Performance

Global equity markets demonstrated divergent momentum through February 2026, marked by pronounced rotation away from large-cap technology. The S&P 500 declined 0.76% in February after gaining 17.88% year-to-date, while the MSCI ACWI ex U.S. surged 5.02% for the month, accumulating 32.39% year-to-date returns. China's equity market declined significantly amid weak technology performance and growth concerns, contrasting sharply with emerging markets' 5.50% February advance and 33.57% year-to-date gain.

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13. Commodities

Silver surged nearly 16% weekly to $89.15 as of February 27, 2026, fueled by broad metals rebound and supply tightness. Gold climbed 3.8% in the same week to $5,170, supported by steady recovery amid ongoing volatility. Platinum jumped 10.5% to $2,323 on strong industrial demand.

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14. Crypto Market

Bitcoin trades near $73,000 with 65% market dominance, its highest since 2021, as Ethereum holds at $2,300 amid a 15% weekly drop. Total crypto market cap sits at $2.5 trillion, driven by institutional buys like Metaplanet's $25M Bitcoin accumulation. Altcoins decline sharply, channeling capital to Bitcoin as the safe asset.

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15. Currencies

The US dollar index hit 100.54, its 44-week high on March 30, 2026, amid Middle East tensions boosting safe-haven demand and oil prices. Euro weakened to 1.1552 per USD, Yen to 156.85 amid Japan's fiscal concerns, while GBP traded near 1.32 per USD. Stronger USD draws capital inflows, raises import costs for Europe and Japan, and pressures ECB/BoJ policy amid 4.25% and 0.75% rates.

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16. Debt Levels

As of Q4 2025, U.S. total public debt hit 122.6% of GDP, federal debt held by the public 98.2%, and household debt 68.5% in Q2 2025. These exceed Euro Area's 87% sovereign level but trail Japan's 237%; U.S. household debt is below Canada's 102%. Rising interest costs at 3.9% of GDP in 2023 strain budgets, pressing policymakers for spending cuts and alerting investors to bond yield spikes.

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17. Economic Calendar

In the month ahead, the September 11 CPI release will gauge inflation trends; a print over 3% may signal to the Fed that price pressures persist. Weekly initial jobless claims, including September 3, will track labor market resilience ahead of the FOMC's September 15-16 meeting. These data will shape decisions on the federal funds target rate amid dual mandate goals.

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An error appeared while loading the data. Maybe there is a technical problem with the data source. Please let me know if this happens regularly @silvan_frank.