By Megan Leonhardt | Tuesday, April 29

One Hundred Days. Stocks picked up steam in afternoon trading today as Commerce Secretary Howard Lutnick hinted that the administration is closing in on a trade deal. 

The Dow Jones Industrial Average rose 300 points, or about 0.8%. The S&P 500 and the Nasdaq Composite both closed up about 0.6%.

The sixth straight day of gains for the S&P 500 and Dow was due, in part, to Lutnick's comments on the progress the administration is making on trade deals. “I have a deal done, done, done, done, but I need to wait for their prime minister and their parliament to give its approval, which I expect shortly,” Lutnick said during a CNBC interview.

Even as the market approved the latest trade policy news, the broader outlook has been less rosy. Today marks 100 days into President Donald Trump's second term. It's a timeframe that's often used to measure a president's success and achievements because they typically mark the height of an administration's influence. That said, Trump's first 100 days have been marked by one of the worst stock market performances since Richard Nixon’s abbreviated second term. 

What does that signal? Well, my colleague Paul LaMonica points out that a weak performance in the first 100 days isn’t a great sign historically:

Going back to 1897, during the 12 times that stock market were down in a president’s first 100 days, the average total return during a four-year term was 12%. In the 20 instances when markets were up in the first 100 days, the total return averaged 44%.

Some of the poor performance reflects especially tough times for global markets. Franklin Delano Roosevelt presided over the Great Depression and World War II. Under George W. Bush, markets faced a hangover from the dot-com bust of the 1990s, the 9/11 attacks, and Iraq war in his first term; in his second term starting in 2005, stocks rebounded for a while and then tanked during the Global Financial Crisis of 2007-08.

But even without distortions like the Great Depression and World War II, stocks have gone on to perform relatively poorly after a bad stretch in the first 100 days. Going back to 1949, during the seven times that markets were down in a president’s first 100 days, the average total return during their four-year term was 20.6%. When markets were up in the first 100 days, the total return averaged 53%.

Paul notes that the bond market is also an important barometer. Higher yields, like we've seen recently, almost certainly spell trouble for stocks.

The big debate now is whether Trump's second administration sustainably changes the calculus for global markets and the economy.

Read Paul's full analysis here. And for a graphical look at the stock market during Trump’s first 100 days, check out this visualization by Barron’s Molly Cook Escobar.

DJIA: +0.75% to 40,527.62
S&P 500: +0.58% to 5,560.83
Nasdaq: +0.55% to 17,461.32

The Hot Stock: SBA Communications +6.8%
The Biggest Loser:  NXP Semiconductors NV -6.9%

Best Sector: Financials +1.0%
Worst Sector: Energy -0.3%

GDP Has an Imports Problem

U.S. economic growth likely hit a speed bump during the first quarter, as businesses and consumers worked to get ahead of tariff hikes. But while  tomorrow will deliver a hefty slate of economic releases, all of the data are unlikely to provide much insight into the wider economic outlook. 

The Bureau of Economic Analysis will release its first estimate of the inflation-adjusted gain in gross domestic product for the first quarter at 8:30 a.m. Eastern on Wednesday. The agency will also release the March measure of the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index, at 10:00 a.m. The Labor Department is releasing the quarterly employment cost index of overall employer compensation costs, as well. 

The consensus call among economists surveyed by FactSet is that real GDP grew at an annualized rate of 0.8%. Bloomberg’s consensus call for the first quarter is lower, at 0.2%. But the range of estimates is fairly diverse—with the Atlanta Fed's GDPNow model showing a significant  contraction in the first quarter even as the New York Fed Staff's NowCast model shows 2.6% growth. 

Part of the murkiness heading into tomorrow is the massive surge in imports as businesses front-loaded goods to get ahead of the impact of Trump’s tariff hikes. Imports during the first quarter shattered previous records, according to Census data released Tuesday. Large upward import swings increase the trade deficit and can negatively affect GDP.

“The picture for Q1 overall remains that President Trump’s tariff threats set off a rush to buy goods now rather than face higher prices later, prompting a startling surge in imports that has left previous blowouts in the trade deficit looking trivial,” Oliver Allen, senior U.S. economist for Pantheon Macroeconomics, wrote in a brief on Tuesday. 

While economic growth is expected to be fairly stagnant, economists do expect some progress in inflation trends. Economists surveyed by FactSet expect headline PCE inflation was 2.2% year over year in March, a significant slowdown from February’s 2.5% rate.

Core inflation, which excludes food and energy prices, is expected to measure 2.6% year-over-year. That’s compared to the 2.8% pace in February. On a monthly basis, core inflation is expected to rise by 0.1% from February to March. 

While it’s likely too early for the inflation data to show much evidence of a lift from tariffs, a more benign inflation reading could help Fed policymakers justify a rate cut in the face of weaker economic conditions.

Yet even with this preponderance of data released tomorrow, the headline numbers won't tell the whole story. Instead, the data will mostly reflect “quirks in how the data are calculated,” without providing too much of a reliable outlook for economic conditions moving forward, said Michael Pearce, deputy chief U.S. economist for Oxford Economics.