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Roughly 50% of earnings in the Magnificent 7 come from abroad, see chart below. That is higher than for the S&P 500, where the share is 41%.
With trade making up a bigger share of GDP in the rest of the world than in the US, the trade war will have a disproportionately more negative impact on the rest of the world.
As a result, the Magnificent 7 will be hit harder on their global earnings than other S&P 500 companies. Their earnings could be even more negatively impacted if Europe retaliates in the form of a digital services tax.
Sources: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Our daily and weekly indicators for the US economy are available here, and the conclusion is that the hard data is still doing okay, but there are signs of weakness emerging.
Specifically:
– Las Vegas visitor volumes and total room nights occupied have started to decline, see the first two charts.
– Weekly bankruptcy filings are moving higher, see the third chart.
– Weekly data for movie theatre visits is weak, see the fourth chart.
– Daily data for job postings has been weaker in recent weeks, see the fifth chart.
– Daily TSA travel data is slightly weaker than at this time last year, see the sixth chart.
– Continuing claims are moving higher, see the seventh chart.
Sources: Bloomberg, Macrobond, Apollo Chief Economist 
Sources: Bloomberg, Macrobond, Apollo Chief Economist 
Note: Filings are for companies with more than $50mn in liabilities. For week ending on April 4, 2025. Sources: Bloomberg, Apollo Chief Economist 
Sources: Boxofficemojo.com, Apollo Chief Economist 
Sources: Indeed, Bloomberg, Macrobond, Apollo Chief Economist 
Sources: US Department of Homeland Security, Macrobond, Apollo Chief Economist 
Sources: US Department of Labor, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The chart book we used during our conference call yesterday is available here.
Source: Apollo Chief Economist See important disclaimers at the bottom of the page.
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The table below shows our estimates of the impact on US GDP and inflation of tariffs and the decline in consumer sentiment and corporate sentiment.
Whether we will have a recession or not depends on the duration of this shock. If these levels of tariffs stay in place for several months and other countries retaliate, it will cause a recession in the US and the rest of the world.
We will be discussing the outlook for the economy and markets on a conference call today at 9 am EDT, you can register here.
Note: Includes Chinese tariffs from February and March, Canada and Mexico non-USMCA compliant goods tariffs from March, Steel, Aluminum and Auto imports and reciprocal tariffs on all countries announced in April. Source: Apollo Chief Economist See important disclaimers at the bottom of the page.
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When policy uncertainty went up, capital markets activity started slowing down, with a decline in loan issuance, IPO activity, and M&A activity, see charts below.
Note: Reflects repricings and extensions done via an amendment process only. Sources: PitchBook LCD, Apollo Chief Economist 
Note: Data shows completed IPO transactions. Sources: S&P Capital IQ, Apollo Chief Economist 
Note: Data shows completed M&A transactions. Sources: S&P Capital IQ, Apollo Chief Economist 
Sources: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Surveys of CEOs and CFOs show that corporate confidence has declined in recent months, see charts below.
Sources: Chief Executive Magazine, Bloomberg, Macrobond, Apollo Chief Economist 
Sources: Duke University & FRB Richmond & FRB Atlanta, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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If uncertainty stays elevated for an extended period, it will have a more negative impact on the economy, see chart below, which shows the impulse responses of a temporary and a permanent shock to economic policy uncertainty in a vector autoregression model with GDP and economic policy uncertainty.
Note: Impulse response from the VAR model with variables log (Real GDP) and log (Economic Policy uncertainty index). A one standard deviation shock to economic policy uncertainty leads to a -0.2% point decline in Real GDP. Temporary shock is defined as a four standard deviation shock in Q1, and permanent shock is defined as a four standard deviation shock in Q1, three standard deviation shock in Q2, two standard deviation shock in Q3, and one standard deviation shock in Q4. Sources: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Household sector leverage and banking sector leverage have declined significantly since 2008, see chart below. Over the same period, federal government leverage has increased significantly, and corporate leverage has moved sideways.
The bottom line is that the private sector in the US is in incredibly good shape.
Sources: Federal Reserve Board, NBER, Haver Analytics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The IMF is forecasting that next year, income per capita will be higher in Poland than in Japan, see chart below.
Note: PPP = Purchasing Power Parity. Sources: IMF, Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Twenty percent of households in their 40s and 50s have borrowed money from their 401(k) retirement account, see chart below.
Note: Data as of 2022. Sources: EBRI/CI Participant-Directed Retirement Plan Data Collection Project, Apollo Chief Economist See important disclaimers at the bottom of the page.
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