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Splitting employment growth into tariff-impacted sectors and sectors not directly impacted by tariffs shows that the slowdown in job growth is broad-based, and job growth in tariff-impacted sectors is now negative, see chart below.
Note: Sectors impacted by tariffs include manufacturing, mining and logging, construction, wholesales trade, retail trade, transportation and warehousing. Sources: US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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One important reason why growth is structurally lower in Europe is that the European financial system is less developed.
Importantly, securitization accounts for 50% of GDP in the US and 7% in Europe, see also here.
Securitization lowers the costs of borrowing for consumers and firms, enhances credit availability, distributes risk and creates new investment opportunities for investors.
The bottom line is that expanding the securitization market in Europe would unlock significant GDP growth and benefit European consumers, firms and retirees.
For more discussion, see here and here.
Note: US is the sum of ABS and agency and nonagency MBS. Europe includes EU, UK and Switzerland. Sources: SIFMA, AFME, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Demand for housing is slowing because of high home prices, high mortgage rates and declining immigration, see charts below.
Housing supply is steady because existing homeowners are reluctant to sell their homes, since they’re locked into lower mortgage rates and don’t want to take on higher ones. Housing supply of new homes is rising, see again charts below.
The bottom line is that there is downward pressure on home prices coming from falling demand and rising supply.
Sources: National Association of Home Builders, Macrobond, Apollo Chief Economist 
Note: Calculation of monthly payment using the 30-year purchase loan application size and the 30-year effective rate. Sources: Bloomberg L.P., Apollo Chief Economist 
Sources: University of Michigan, National Association of Home Builders, Macrobond, Apollo Chief Economist 
Note: Household formation estimates for 2025 and 2026 are based on projected natural population growth and legal immigration. We assume unauthorized immigration drops to zero under potential Trump policy scenario. To reflect this, we use natural population growth plus 65% total net migration—based on CBO estimates and Migration Policy Institute’s estimates of 0.9 million rise in unauthorized immigrants in 2023—divided by the average US household size. Sources: Census Bureau, Haver, Apollo Chief Economist 
Note: Based on transactions in the 12 months ending March of each year. Sources: National Association of Realtors (NAR), Apollo Chief Economist 
Sources: US Census Bureau, Macrobond, Apollo Chief Economist 
Sources: NAR, US Census Bureau, Macrobond, Apollo Chief Economist 
Sources: US Census Bureau, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Sentiment indicators for consumers and firms are pointing to a weaker employment report for August.
First, consumer sentiment about the outlook for the labor market has historically been a leading indicator for job growth. Using the historical relationship to predict the August employment report suggests that nonfarm payrolls on Friday could come in lower than the 90,000 expected by the consensus, see the first chart below.
Second, small businesses saying that they are experiencing poor sales has also been a leading indicator for the unemployment rate, and the current reading suggests the unemployment rate could rise over the coming months, see the second chart.
The bottom line is that sentiment indicators are suggesting that the labor market will continue to weaken.
Note: University of Michigan’s expected change in unemployment during the next year August numbers are preliminary estimates. Sources: US Bureau of Labor Statistics (BLS), University of Michigan, Macrobond, Apollo Chief Economist 
Sources: National Federation of Independent Business, US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Sales by European companies in the US are about eight times bigger than US goods imports from Europe, see the first chart.
Similarly, US companies’ sales in Europe are dramatically higher than European goods imports from the US, see the second chart.
The bottom line is that the US and European economies are not only linked via goods trade but also via sales of European companies in the US and sales of US companies in Europe.
Data as of 2022. Sources: US Bureau of Economic Analysis (BEA), Macrobond, Apollo Chief Economist 
Data as of 2022. Sources: US Bureau of Economic Analysis (BEA), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The price of steaks is rising rapidly. Live cattle prices have nearly doubled over the past five years and are at all-time highs, largely due to the US cattle herd being at its smallest size in decades, driven by years of drought and high feed costs, see chart below.
Sources: Bloomberg, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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There is upside pressure on inflation and inflation expectations from tariffs, dollar depreciation and growing disagreement on the FOMC about how much weight to put on rising inflation relative to slowing employment.
The risks are rising that we could see another “inflation mountain” emerge over the coming months, see chart below.
Sources: BLS, Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The chart below shows quoted bid-ask spreads for public investment grade credit as a function of bond-level spread volatility. Both on-the-run and off-the-run bonds see higher transaction costs as spreads move, but the increase is far more pronounced for off-the-run bonds. This helps to explain why volumes remain depressed even in volatile periods.
The bottom line is that liquidity in public and private credit is converging, and in some cases where private credit is included in ETFs, private credit may even be more liquid than some segments of public credit.
For more discussion see also here.
Note: Data as of December 2024. Liquid bonds defined as issued in <1y, $1bn+ deal size. Illiquid bonds issued >2y, <$900mn in size. Sources: TRACE, Barclays, Apollo Analysts, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The yield on Italian long-term government debt could, by the end of this year, be lower than the yield on France’s government debt, see chart below.
Sources: Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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When the Fed raises interest rates, the idea from the FOMC is for investors to take less risk and make it more attractive to move money into safer fixed income.
With this backdrop, the convergence in yield levels across debt and equity markets is remarkable, see chart below.
Not only is the yield level in fixed income higher than it has been for many years, but the S&P 500 forward earnings yield and similar implied yield levels in equities have been coming down, see chart below.
The bottom line is that fixed income remains more attractive than the implied yield levels in public equity markets at the moment.
Put differently, risk is mispriced and investors buying the S&P 500 today are not rewarded for the risks they are taking.
Sources: Nareit, Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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