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Smart Money Signals Trouble with 82% Bearish Outlook
Hello and welcome to Macro Notes, your go-to source for the latest macroeconomic trends, market-moving news, and key indicators to watch. We cut through the noise to bring you actionable insights in just a few minutes.
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🌍 The Big Picture
Agriculture
U.S. Farmers Hit Hard as China Slashes Agricultural Imports
U.S. farmers are feeling the brunt of the ongoing trade war with China. Export groups report that Chinese buyers have sharply reduced pork, beef, hay, straw, and lumber purchases, leaving goods piled up in warehouses and railcars and even stranded at sea.
The reason is clear: Beijing is retaliating against new U.S. tariffs by curbing imports, and agriculture is an easy target. Farming groups are describing the impact as “full-blown,” with canceled contracts and layoffs rippling through rural communities.
Ports are also taking a hit. Oakland’s port officials say fewer agricultural shipments mean less work for dockworkers and truckers. While tariffs often focus on factories, farmers and their supply chains are just as vulnerable, and missing a seasonal sales window cuts deeper than a temporary loss on paper.
Replacing China’s massive demand is tough. Exporters say no single country can match China’s buying power, and lining up multiple smaller buyers takes time that most producers can’t afford.
Farmers now face hard choices: store unsold goods, redirect shipments at a loss, or reduce production. None of these keeps money flowing. Rural communities were a key political force in past elections, so trade talks are under pressure to deliver solutions. The broader economy may still be bracing for trouble, but for growers, the crisis is here.
Aviation
Aviation Warns of Job Risk as Tariffs Add Cost to Every Jet and Engine
U.S. aviation is reeling from new tariffs on aircraft, parts, and leased jets, adding costs that airlines, planemakers, and engine makers say threaten jobs as travel demand weakens.
Industry leaders met with White House officials to push for exemptions, highlighting aviation’s $75 billion annual trade surplus under decades of duty-free status.
Airlines report declining bookings and lower fares, prompting some to consider delaying jet deliveries or returning leased planes. A 10% tariff on a wide-body jet can add tens of millions to its price, straining budgets. Suppliers are also hit hard.
Boeing estimates its tariff costs at under $500 million yearly, while GE Aerospace and RTX face even larger bills. These companies are passing costs to airlines, creating friction with customers.
Executives argue that tariffs intended to boost U.S. manufacturing are misplaced, as most aviation jobs and factories are already located domestically. Without relief, they warn of reduced aircraft production and fewer flights, which could weaken a key export sector. The Air Line Pilots Association and other groups echo the concern, noting that higher costs could lead to layoffs and scaled-back operations.
The industry is urging swift action to restore duty-free trade. Until then, aviation faces tough choices—cut capacity, delay growth, or absorb costs—that could ripple through the economy.
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Crypto Markets
Bitcoin ETFs Attract Major Inflows as Investor Confidence Rebounds
Investors directed substantial capital into Bitcoin and Ether exchange-traded funds last week, with total inflows surpassing $3 billion, according to Bloomberg. BlackRock’s Bitcoin ETF led the field, recording its highest weekly inflow this year. Funds managed by ARK and Fidelity also saw significant contributions.
The influx coincided with a broader rally in risk assets. The S&P 500 advanced nearly 5%, and Bitcoin climbed to approximately $94,000, marking its strongest weekly performance since post-election trading.
Bitcoin demonstrated resilience in 2025, maintaining stability while the S&P 500 declined. This contrast has prompted discussions about Bitcoin’s potential as a safe-haven asset akin to gold. Given Bitcoin’s history of sharp price volatility, we remain cautious, but the robust inflows indicate investors are committing significant capital to test this thesis.
Bitcoin’s ability to hold value amid equity market struggles underscores its appeal to diversification seekers. However, its susceptibility to macroeconomic shifts and regulatory developments warrants close attention.
The current wave of investment reflects renewed confidence in cryptocurrencies. We will monitor whether this momentum persists or shifts in response to upcoming economic or policy developments.
📊 Metrics to Watch
Record Bearishness: Today, we’ll look at results from a recent Bank of America (BofA) survey polling global fund managers, a major bellwether of “smart money” sentiment:
Economic Prospects: 82% of respondents expect the global economy to decline.
Recession Risks: 42% of respondents project an American recession by year’s end.
Avoiding America: Fund managers are collectively 35% underweight in American equities on average, compared to 17% overweight in February.
Peak Fear: On a more optimistic note, BofA’s report revealed that respondents allocated just 4.8% of their total assets to cash, with “peak fear” typically corresponding to a 6% total outlay.
🚀 Market Movers
🛍️ Cheap Goods (Aren’t So Cheap): Fast-fashion retailer Shein and discount shopping app Temu hiked prices substantially in recent weeks. Prices more than doubled in some cases as former de minimis exemptions and ad-valorem taxes push costs higher
These D2C retailers are likely canaries in the coal mine, so expect enterprise-level supplier price hikes to start affecting retailers like Amazon (NASDAQ: AMZN), Target (NYSE: TGT), and Walmart (NYSE: WMT) soon, as well as mom-and-pop operations.
☕️ Coffee Markets Get Jittery: A perfect storm of tariffs, droughts across Vietnam, and a dry growing season in Brazil combined to push coffee bean pricing higher than ever. Coffee futures pricing remains near record highs and up 35% year-over-year, putting further pressure on the consumer staples sector.
💻 (More) U.S. Tech Investment: IBM (NYSE: IBM) became the latest tech powerhouse to announce major U.S. production facility plans, following Nvidia (NASDAQ: NVDA), Taiwan Semiconductor (NYSE: TSM), and Apple (NASDAQ: AAPL).
IBM will spend $150 billion over the next five years, meaning Trump’s stated tariff goals of onshoring jobs and returning to American-made manufacturing are bearing fruit.
📦 Shipping Starts Back Up: Signaling a major internal shift, DHL announced it is resuming domestic shipments worth $800 or more to individual U.S. consumers. DHL halted shipments following tariff announcements, but the rapid reversal may signal that the corporate logistics world is slowly coming to terms with a new reality.
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⚡ Market Impacts
Equities: The S&P 500 may have bounced from its recent low, but that doesn’t mean the trouble is over. As we saw in the BofA report above, smart money is shifting away from American equities. This is evident from the relative outperformance of the Europe 600 (+2.4%) and Chinese SSE 100 Index (+2.7%) benchmarks since January 1st, compared to the S&P 500’s 6.4% drop.
Bonds: Although yields have settled somewhat in recent days, an April retrospective highlights a stark development: 30-year yields reached their highest level since the 2008 Great Financial Crisis, adjusted for inflation. “Long bond fear” could prove devastating to long-term Federal budget deficits, ultimately running contrary to Trump’s stated policy goals.
Currencies: Deutsche Bank analysts revealed that “The preconditions are now in place for the beginning of a major dollar downtrend” in a recent research note. This means, in their view, that the “higher for longer” USD regime is over, and safe-haven pairings like EUR/USD will shift away from favoring the dollar.
Commodities: China is taking a cue from OPEC when it comes to managing commodity prices. As demand across sectors falls due to higher, tariff-induced pricing, China plans to cap the supply of coal, oil, and metals like cobalt and steel.
Slashing supply points to tariffs having a significant impact on China’s bottom line, not to mention the nation’s export ban on rare earth metals - meaning Trump’s tariffs are, again, starting to have their planned effect in some regards.
🗓️ Key Indicators to Watch
📅 Inflation (March) – April 30th: All eyes are on the Fed as rate cut hopes fall - but a strong downward inflation print could change Powell’s mind.
📅 Consumer Spending (March) – April 30th: This may be the last gasp for consumer spending, as March saw buyers rush to retail stores for pre-tariff pricing purchases.
📅 Tech Earnings Season – April 30th: Tech earnings reports kick off with Microsoft and Meta on the 30th, followed by Apple and Amazon on May 1st - creating a “make or break” moment for major market indices.
🧩 Everything Else
Walmart is betting big on the Central American market's strength with a $6 billion investment to expand its presence and snag market share.
Agriculture is facing significant and often overlooked losses amid the U.S.-China trade war.
Fintech earnings, starting with PayPal on the 29th, may be the best barometer of current market strength as the reporting firms combine tech outlooks and “big banking” prospects.
These charts, gathered by MarketWatch, offer a visual depiction of Trump’s first 100 days on domestic finances.
One of the few bull sectors moving forward may be global defense as European nations ramp up production spending.
That’s it for today’s edition—thanks for reading! Reply to this email with any feedback or let me know which macro trends or markets you’d like me to cover next.
Best Regards,
—Noah Zelvis
Macro Notes