28 April 2025 | Weekly Snapshot

Market Movements

The ASX was up 1.9% last week but was outpaced by the US market, with the S&P500 up 7.1%. In Australia, financials led the market higher (up 2.8%) with CBA setting a new all time high at $167. Gold stocks took a breather after some strong gains, with Northern Star down 6.8%. In the US, higher-octane stocks led the market higher. The Info tech was up 10.5%, led by Palantir (up 24.2%) and Tesla (up 25.3%).

Economic data was generally soft, perhaps unsurprisingly, including
• U.S. composite PMI falls to 51.2
• Eurozone composite PMI softer at 50.1
• Eurozone consumer confidence declines 2.2pts to -16.7

The Australian equity market is performing relatively well despite increasing global growth risks. The ASX 200 index is 7% below its February peak but has rebounded 1.5% in April. In contrast, the U.S. S&P 500 is down 12% from its recent peak and has declined 4% this month alone. The relative outperformance is due to the larger derating in the U.S. and Australia’s stronger economic ties to Asia than the U.S. The U.S. forward price-to-earnings ratio has dropped sharply to 19x, while Australia’s is down much less to 17x. Additionally, only 11% of ASX 200 revenues over the past year came from the U.S., whereas a higher combined share came from China, India and Japan (13%). Despite these positive aspects, market risks remain high, and investors should ensure portfolios are well-insulated against future volatility.

Portfolio Movements

US Q1 earnings set to ramp up this week

• The US Q1 earnings season is underway with 12% of S&P 500 companies having reported. The blended year-over-year earnings growth rate from these companies is 7.2%, in line with the expectations.
• For Q2 2025 through Q4 2025, analysts are calling for earnings growth rates of 7.2% – 9.3%, respectively. For CY 2025, analysts are predicting earnings growth of 10.0% so still solid growth numbers. The forward 12-month P/E ratio for the is 19.0, which is below the 5-year average (19.9) but above the 10-year average (18.3).
• Reporting ramps up this week with 122 S&P 500 companies.

Alphabet beats Q1 estimates – Ups dividend and increases buyback

• Google parent Alphabet reported a strong Q1 last week with Earnings-per-share of $2.81, which was well ahead of the $2.01 estimate.
• Revenue grew more than expected, up 12% y/y to $90.23B ahead of the $89.18B expected.
• The quarterly dividend was increased by 5.0% to $0.21, and the board authorized a repurchase up to an additional $70.0B of its Class A and Class C shares.
• CEO Andy Jassy commented: “We’re pleased with our strong Q1 results, which reflect healthy growth and momentum across the business. Underpinning this growth is our unique full stack approach to AI. This quarter was super exciting as we rolled out Gemini 2.5, our most intelligent AI model, which is achieving breakthroughs in performance and is an extraordinary foundation for our future innovation. Search saw continued strong growth, boosted by the engagement we’re seeing with features like AI Overviews, which now has 1.5B users per month. Driven by YouTube and Google One, we surpassed 270M paid subscriptions. And Cloud grew rapidly with significant demand for our solutions.”

Broadcom announces solid result after market

• Broadcom stock soared 16% in after-market trading after releasing solid results.
• Earnings per share of $1.60 beat estimates of $1.51 and revenue was a record $14.92B, up 25% from the year-ago quarter, also beating estimates of $14.59B.
• AI revenue was the big winner +77% YoY to $4.1B while software revenue was +47% at $6.7B. The company said it expects continued strength in AI semiconductor revenue as hyperscale partners continue to invest in AI XPUs and connectivity solutions for AI centres.

The Week Ahead

• Wednesday 30 April: USA ADP Employment Change 124k v March 155k, GDP Annualised Quarter on Quarter (QoQ) for Q1 expected to be 0.4% down from 2.4% at end of Q4, Chicago PMI expected to fall to 46.0 in April from 47.6 in March. China Manufacturing PMI expected to be 49.8 in April compared with 50.5 in March. Australia CPI YoY for Q1 expected to be 2.2% down from 2.4% in Q4, CPI QoQ for Q1 expected to be 0.8% up from 0.2% at end of Q4.
• Thursday 1 May: USA Personal Income expected to rise 0.4% in March, compared to 0.8% in February, Personal spending expected to have expanded at 0.6% in March up from 0.4% in February and Initial Jobless claims expected to be 225k, up from 222k the previous week.
• Friday 2 May: USA Chang in Nonfarm Payrolls expected to be 130k in April, down from 228k in March, the Unemployment Rate expected to remain steady at 4.2% in April, ISM Manufacturing expected to drop to 48.0 in April from 49.0 in March. Australia Retail Sales MoM for March expected to rise to 0.4% from 0.2% in February.