We came into last week knowing it had the potential to be a crazy one, but as top Goldman Sachs trader John Flood highlighted earlier, it exceeded all expectations on the crazy front.

His colleague, Neel Dave, in Hong Kong was just as shocked:

I am quite frankly stunned at how quickly things unraveled this week – there is no other way to put it but the dynamic shift in the macro landscape has put us in a precarious position for the coming quarter. Perhaps the surprise factor was high because there was a feeling (looking back it was probably hope) from clients (and myself) that the reciprocal tariffs would not be as bad as envisaged and the market would look at this event as a risk clearing “hurdle” that would present a more tradeable path forward for investors.

To some extent we might have gotten that – if there is one “positive” takeaway from all of this, it’s the view that markets might have been presented with the most bearish tariff scenario from the US administration. However, there are clearly some injuries sustained and the market will take its time to figure out where credit spreads should be in adjusting to the various downside economic effects and changing technical drivers.