Three Things (3/26)

Confidence Slips

U.S. consumer confidence dropped to 92.9 in March, its lowest point in over four years, according to new data from the Conference Board. It’s the fourth straight monthly decline, with sentiment hit hardest by rising inflation expectations and mounting concerns over tariffs. The expectations index—a forward-looking measure of consumer outlook—plunged to 65.2, a level not seen since 2012. Much of the anxiety is tied to the Trump administration’s trade stance, with tariffs raising prices on everyday goods and fueling recession fears.

If this slide in confidence continues, it could have a chilling effect on the broader economy. Consumer spending drives nearly 70% of U.S. GDP, and when households start pulling back, it echoes through everything from retail and housing to travel and job creation. What starts as sentiment can quickly become reality. Right now, confidence isn't just down—it’s sending up a flare that the U.S. consumer may be reaching a breaking point.

Berlin Bump

European markets posted modest gains after Germany’s closely watched Ifo business climate index rose to 86.7, surprising to the upside. The increase, which reflects improving sentiment among German manufacturers and service providers, suggests the region’s economic engine may be regaining momentum. The STOXX 600 index rose 0.4%, with energy and industrials leading the way, bolstered by easing recession fears and stronger-than-expected order books.

This bounce in confidence comes at a critical time, with Europe navigating ongoing global trade tensions and internal pressure from high interest rates. For investors, positive data out of Germany is more than just a regional story—it’s a signal that Europe’s largest economy might be stabilizing, offering a much-needed anchor for broader Eurozone resilience. In a market desperate for clarity, even modest optimism in Berlin can move the needle across borders.

Millions, Not Hundreds

Median pay for S&P 500 CEOs rose 12% to $16.3 million in 2024, a new high according to The Wall Street Journal. Equity awards and performance-based bonuses accounted for the bulk of that increase, particularly in tech and industrial sectors. But in a notable shift, no CEO crossed the $100 million mark for the first time in five years—an absence of headline-grabbing mega-compensation even as overall executive pay climbs.

This year’s pay trends reflect a recalibration at the top. While boards continue to reward results, there’s growing scrutiny over income inequality, shareholder value, and ESG-linked performance metrics. Companies may be dialing back splashy CEO paydays in favor of tighter alignment with long-term value creation. Executive compensation is still rising—but in a climate of economic sensitivity and wage stagnation, optics matter more than ever, and boards are clearly adjusting the balance.