Bonds & Stocks
The world’s biggest bond market rallied as a weak reading on retail sales prompted a slight increase in bets on Federal Reserve rate cuts. Treasuries rose across the curve, with the 10-year yield dropping below 4.5%. Money markets are now pricing in around 40 basis points of Fed cuts in 2025. Equities wavered after the S&P 500 came close to its alltime highs. The dollar fell.
Economy
President Donald Trump ordered his administration to consider imposing reciprocal tariffs on numerous trading partners, raising the prospect of a wider campaign against a global system he complains is tilted against the US. The president on Thursday signed a measure directing the US Trade Representative and Commerce secretary to propose new levies on a country-by-country basis in an effort to rebalance trade relations — a sweeping process that could take weeks or months to complete.
World
Chinese stocks in Hong Kong extended a recent rally as the nation’s growing capabilities in artificial intelligence boosted optimism over the market’s outlook, while a potentially momentous show of support for the private sector gave sentiment an extra lift. The Hang Seng China Enterprises Index jumped 4.1% on Friday to hit the highest since February 2022 — surpassing an October peak spurred by a stimulus blitz.