14 April 2025 | Weekly Snapshot

Did you know?

Last week saw one of the largest single up days in the history of the US market, rising 9.5%. This move has only been beaten during the GFC, when the market saw daily gains of 11.6% (13-Oct-2008) and 10.8% (28-Oct-2008).

The below table maps out the returns that followed these large single up days. This history suggests that markets are generally higher in 12 months’ time, but investors should use some judgement before making simple extrapolations of the past.

Market Movements

Equity markets recouped some of their recent losses following a reversal on the high tariffs announced on April 2nd. Yields in the U.S. bond market sharply dislocated from fundamentals with volatility not seen since the onset of the COVID pandemic. It may be because investors were re-evaluating the haven status of U.S. Treasuries. In response, a 90-day pause was granted for all countries except China. Trump’s pivot signals a more conciliatory stance and opens the door for negotiations. While the peak in trade uncertainty may be behind us, the path forward remains uncertain. We suspect that the next chapter in the trade war will be de-escalation, but investors are not yet out of the woods give what seems like a commitment from Trump to reduce trade dependence from China, and this is likely to bring about some short-term pain for the broader US gains.

The Australian market was up 4.4% last week, led by tech stocks (up 8.2%), whilst the healthcare sectors was down 0.1%. Gold miners were strong, with Northern Star up 15.1%. CSL was down 3.6%.

In the US, the tech-heavy NASDAQ led the market higher (up 7.2%). The Nasdaq remains the worst performed in 2025 so far (down 13.4%). Only Germany is holding on to positive gains this year (up 2.3%). Nvidia was among the strongest stocks last week (up 13.6%), whilst energy stocks were in the red (Chevron down 3.2%) on the back of a steep fall in the oil price.

Portfolio Movements

JPMorgan reports 14% rise in earnings

• JP Morgan, the largest US lender, reported Q1 EPS of $5.07, ahead of the $4.63 expected but included a significant item gain of $588M. Earnings were up 14% on the same quarter last year.
• CEO Jamie Dimon’s commented “This quarter, we repurchased $7B of common stock and announced a 12% increase in the common dividend. The increase in capital return was supported by our strong earnings generation and elevated capital levels. That being said, we continue to believe it is prudent to maintain excess capital and ample liquidity in this environment – our CET1 ratio remained very strong at 15.4%”
• Adding “The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and “trade wars,” ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility. As always, we hope for the best but prepare the Firm for a wide range of scenarios.

CSL hit by proposed pharma tariff

• CSL dropped last week on news that the US government is looking to impose large tariffs on pharmaceuticals.
• The majority CSL’s products exported to the US was manufactured in Melbourne and the US market is responsible for 49% of CSL’s revenue.
• Most of CSL’s competitors are based outside the US so a level playing field will exist in this regard. The big impact would be felt in India which exports over $9B in drugs to the US.

Apple eyes India for iPhone production

• Apple has 90% its manufacturing based in China so is one of the most exposed companies in the trade war. China has a potential incoming 54% tariff rate – before new retaliatory increases were mentioned last night.
• The impact of reciprocal tariffs is estimated to raise the price of Apple’s China produced iPhone 16 by as much as $350 in the US or a $120 increase if produced in India.
• It is estimated that Apple will need to increase prices on average 30% to offset import duties fully, but it’s still early days and these estimates don’t take into account potential exemptions.

The Week Ahead

• Monday 14 April: China Exports YoY is expected to grow at 4.6% in March compared to -3.0% in February and the Trade Balance is expected to have grown to US$75.15b in March from US$31.72b in February
• Wednesday 16 April: USA Retail Sales Advance MoM expected to be 1.4% compared with 0.2% in February, Industrial Production MoM expected to have contracted -0.2% in March compared with +0.7% in February. China Industrial Production YoY expected at 5.9% in March, GDP YoY is expected to have grown at 5.2% in 1Q compared to 4Q at 5.4% and Retail Sales YoY for March are expected to be 4.3% compared to 4.0% in February. United Kingdom CPI Core YoY is expected to grow at 3.4% in March compared to 3.5% in February
• Thursday 17 April: USA Housing Starts expected to be 1.416m in March compared with 1.501m in February, Initial Jobless Claims expected to be 225k compared with 223k the previous week and Continuing Claims expected to be 1.87m compared to 1.85m the previous week. Australia Employment Change expected to be +40k in March compared with -52.8k in February and the Unemployment Rate is expected to rise to 4.2% from 4.1%.