The world is struggling to understand whatever tariff strategy the US is trying to roll out and so far taking it in stride. If the economy starts to roll over, that will change in a hurry.
One early indication will come from initial jobless claims and there is a risk that when it gets bad, the recession trade will be on.
We also get wholesale inventories and final Q4 GDP but the other big one to watch will be February advance goods trade balance. It was the January report that set off some real worries about Q1 GDP and led to the sharp drop in the Atlanta Fed GDPNow tracker. We later learned that was largely due to gold imports.
It’s not clear how much tariff front-running and stockpiling is going on but if that’s the case, there could be another big US trade balance disappointment. There is no consensus on today’s data but the prior was -155.5B.
