Mid-session market 04/10: Extremely low liquidity after the holiday

The market had a fairly stable trading session this morning as most investors decided to sit out after the Easter holiday. Cash flow moved quite unevenly across the market with mega-cap tech down nearly 2% while semi-conductors received attention amid tensions in Taiwan. With current liquidity, market movements remain temporary and no changes in fund allocation in investor sentiment have been seen.

On the macro front, the FED survey shows that public inflation expectations continued to rise again in March, with inflation over the next year returning to nearly 5%:

Notably, the gap in the survey is quite pronounced by age group, with older age groups predicting higher inflation next year:

With the banking sector continuing to face a deposit crisis, lending conditions continue to tighten across the economy. Nearly 60% of households say accessing loans is harder than a year ago:

Nevertheless, consumer debt remains at alarming levels despite the growth rate slowing in March.

Notably here, although total household debt continues to rise, the savings rate has also increased again. This occurred similarly right before the GFC in 2008, indicating a change in consumer sentiment as consumers begin to perceive financial risks and cut back on spending habits, leading to a drop in demand and igniting a recession.

Political news from the past week also continues to be generally unpromising for the US as classified documents from the Pentagon continue to leak online, China conducts exercises to invade Taiwan for three consecutive days, North Korea cuts all communication channels with South Korea and France, in a significant shift in foreign policy, declares that Europe should reduce dependence on the US and avoid confrontation with China if war breaks out in Taiwan.