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The US sovereign CDS spread is currently trading at levels similar to countries that are rated BBB+, such as Italy and Greece, see chart below. For solutions to the US fiscal challenges see here and here.
Data as of May 27, 2025. Sources: S&P Capital IQ, Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The chart below shows the underperformance of active managers in public equities by strategy. The bottom line is that over the past 10 years, 80% to 90% of active managers have underperformed their benchmarks across all strategies. For more, see the S&P SPIVA data here.
Note: Data as of December 31, 2024. Sources: SPIVA scorecard, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Data center construction added one percentage point to GDP growth in the first quarter, see chart below. This will be a strong tailwind to US economic growth over the coming years.
Note: pp = percentage points. Sources: Bloomberg, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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American workers work from home on average 1.6 days per week, which is more than workers in Italy, France, and China, see chart below.
Sources: WFH Research, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Inflation has for several years been moving down toward the Fed’s 2% inflation target. But the consensus now expects inflation to rise over the coming quarters, driven by tariffs and by upward pressure on housing inflation, see charts below.
Sources: Bloomberg, Apollo Chief Economist 
Sources: Federal National Mortgage Association (Fannie Mae), Federal Reserve Bank of New York, US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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It’s been nearly two weeks since the China/US trade deal, but container traffic from China to the US hasn’t shown a strong rebound, see chart below.
This raises the question: Are 30% tariffs on China still too high? Or are US companies simply waiting to see if tariffs will drop further before ramping up shipments?
Note: Displays the estimated number of container vessels departing China for the United States, focusing on dry cargo ships. Aggregates data using a 15-day moving average to reduce short-term volatility and to provide a clearer view of broader trends in vessel activity. Sources: Bloomberg, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Weekly data for homebuilder traffic points to a weak spring selling season, driven by mortgage rates near 7%, record-low consumer confidence, and a rising inventory of homes for sale, see chart below.
Sources: Zonda, Apollo Chief Economist See important disclaimers at the bottom of the page.
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When the Fed started raising interest rates in March 2022, the Magnificent 7 stopped hiring more workers, see chart below.
Why is the tech sector so vulnerable to higher interest rates? First, tech firms are priced to deliver cash flows far out in the future, which makes tech companies more vulnerable to changes in the discount rate. Second, tech firms often need to borrow to finance multi-year projects, which also makes them more vulnerable to higher interest rates. Third, when interest rates are high, general risk appetite among investors is low, as investors can generate higher returns in fixed income.
The bottom line is that the bubble in AI valuations was simply the result of a long period with zero interest rates.
With upward pressures on inflation coming from tariffs, deglobalization, and demographics, interest rates will remain high and continue to be a headwind to tech and growth for the coming years.
Sources: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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While tariffs on China have declined from 145% to 30%, the headwind to corporate earnings from tariffs remains significant because of the overall jump in the average tariff rate from 3% in January to 18% today, see the first and second chart below. We are already beginning to see weakness in the economic data with a significant decline in the earnings revisions ratio since Liberation Day, see the third chart.
Sources: White House, China Ministry of Finance, Macrobond, Apollo Chief Economist 
Note: Includes IEEPA tariffs on Canada, Mexico, and China (with USMCA exemptions); April 2 “reciprocal” tariffs; and steel, aluminum, auto, and auto parts tariffs. Tariff revenue estimate uses an elasticity of -0.997 and a noncompliance rate of 8 percent. Sources: US Census Bureau; Historical Statistics of the United States: Colonial Times to 1970, Part II; US International Trade Commission, “U.S. imports for consumption, duties collected, and ratio of duties to values, 1891-2023, (Table 1)”; Tax Foundation calculations; Apollo Chief Economist 
Note: Earnings revisions ratio measures how many upward revisions to earnings estimates analysts are making versus downward revisions over a given period. Above 0.5 more upgrades than downgrades and below 0.5 more downgrades than upgrades. Sources: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The Covid-motivated pause on reporting delinquent federal student loans has now ended. As a result, starting in May 2025, up to 10% of US households may face a steep decline in their credit score, see chart below. This means they will no longer be able to get a loan to buy a car, a house, or new furniture. Combined with tariffs and high uncertainty, this is a significant headwind to consumer spending over the coming months. See here for more discussion from the New York Fed.
Sources: Federal Reserve Bank of New York, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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