Week in Review: 7th-11th of April
| UK & US Equities (week ending 11/4) | Notable Markets (week ending 11/4) | ||||
| Index | Close 4/4 | Week | Market | Close 4/4 | Week |
| FTSE 100 | 7964.19 | -1.13% | Gold Futures | 3,244.60 | 6.89% |
| FTSE 250 | 18514.85 | 0.81% | Bitcoin (Friday) | $83823 | -0.05% |
| FTSE AIM 100 | 3112.36 | 1.07% | UK 10yr GB Yield | 4.77% | +32 bps |
| S&P 500 | 5363.36 | 5.70% | CBOE Volatility (VIX) | 37.56 | -7.75 |
| Dow Jones | 40212.71 | 4.95% | Euro STOXX 50 | 4787.23 | -1.62% |
| NASDAQ 100 | 18690.05 | 7.43% | GBP/USD | $1.3084 | 1.50% |
Another volatile week, with some historic moves in major indices. The deep red of Monday and Tuesday gave way to a remarkable snap back in US markets following the 90-day pause on reciprocal tariffs. The tech-heavy NASDAQ bounced 12% on the day and the S&P 500 had its best day since the GFC. Thursday saw much of this given away with another big down day following China’s retaliation. The Dow oscillating more than 2000 points between its highs and lows on each of the first 4 trading days. Friday saw things turn higher again with positive news from the White House on the potential for trade deals. The weekend has bought further positive news with Donald Trump putting a temporary exemption on tariffs covering smartphones and other consumer electronics.
Observation of the Week:
Traditional Safe Havens – a shift in places to shelter
Usually in times of financial panic, the mighty green back and U.S. treasuries are favoured by investors as places to hide out during a storm. However, given the U.S. economic situation and policy direction, money is instead being repatriated to other parts of the globe and investors are shunning the US Dollar and long-term US government bonds.
U.S bonds, had until this week performed well during the equity market sell off experienced since January. However, the bond markets got ‘yippy’ as yields increased (prices falling) on U.S 10-year and 30-year treasuries early in the week, prompting Donald Trump to pause the reciprocal tariffs on all but China. The US 10-year treasury yield is now 4.5%, rising by 50 basis points over the week. The treasury sell off is significant and the 10-year treasury yield saw its sharpest surge in more than 20 years.
German Bunds have offered relative refuge instead, rallying sharply this week. Following March’s fall after Germany’s fiscal expansion plans, Bunds have roared back and are now performing like a safe haven asset during the current volatility, whilst American bonds are not.
The US Dollar is usually king in these types of share market sell offs, however the Dollar Index which measures the value of the US dollar against a basket of major currencies has fallen by about 3% this week. The Japanese Yen and the Swiss Franc appear to be the beneficiaries as safe havens in replacement of the US Dollar, both appreciating rapidly in recent days. The Euro and Sterling too appreciating against the Dollar. This indicates that the mighty dollar is not being seen as king in these volatile times. After a pull back last week, Gold rallied over 6% this week to new record highs, reaffirming its status as a safe haven asset.
CHF/ USD- The Swiss Franc in US Dollar Terms
Source Saxo Markets
U.K. Market Performance
The FTSE 100 ended the week down 90.8 points or 1.13%, marking a second consecutive down week and now down over 8% for the fortnight. This is its largest two-week decline since March 2020, having erased the gain from the start of the year and it is the first time the main index has closed the week with a ‘7’ in front in almost a year. Energy and pharmaceuticals companies were hardest hit following plunging oil & gas prices alongside tariff implications and higher regulatory risks facing big pharma in the US.
Gold miners were amongst the top performers after the gold priced surged following a recent pause in its price rally.
The mid cap FTSE 250 index ended the week slightly higher. Its outperformance against the large cap FTSE 100 index is due largely to the more domestic exposure of its constituents. AIM shares echoed this trend edging higher to end the week in positive territory.
FTSE 100 Movers
Gainers: Endeavour Mining +10.2%, JD Sports +10%, Fresnillo +8.5%, 3I Group +4%, Admiral Group +3.4%, Diploma +2.6%, Rightmove +2.2%, BAE Systems +1.9%
Losers: BP -17%, Shell -12.6%, GSK -11.3%, AstraZeneca -10.7%, Pershing Square -10%, Melrose Industries -9.8%, Aviva -9.7%, Smith & Nephew -9.4% Intertek -9.4%
Macroeconomic Data
Halifax House Price Index: The Halifax House Price Index indicated that UK house prices fell 0.5% for the month of March but the annual change remained steady at 2.8% with the average UK home now worth £296,699.
Monthly GDP Estimate: The economy expanded by 0.5% in February, with the services sector having a strong month, the Office for National Statistics (ONS) said.
Industrial Production UK industrial production grew 1.5% month over month in February, following a revised 0.5% decline in January, according to ONS. On a yearly basis, UK industrial output was 0.1% higher, against the revised 0.5% decline earlier and the consensus estimate of a 2.3% decrease.
Manufacturing Output: The UK’s monthly manufacturing production rose 2.2% in February. On a yearly basis, British manufacturing output was up 0.3%, compared with the consensus estimate of a 2.4% decline.
UK Trade: Britain’s goods and services trade deficit in the three months to February shrank to the lowest total trade deficit since the quarter to July 2021.
There is suggestion there may have been a rush of UK exports to the US to get ahead of tariffs.
Notable Corporate News
– BP said it expects its reported upstream production in the first quarter to decline from the previous quarter, sending its shares down even further amidst the plunging oil & gas prices.
– Shein is awaiting Chinese regulatory approval for its awaited London IPO. The Financial Conduct Authority (FCA) have approved the fast fashion retailer’s plans.
– JD Sports issued a steady trading update, though it could not comment risks from potential US tariffs, despite its heavy exposure to the American market.
U.S. Market Performance
U.S equity markets whipsawed all week. Panicked selling on Monday and Tuesday gave way for a snap back in the index with its biggest rally since the GFC on Wednesday. The S&P 500 closed the week higher by 5.7%. The Dow Jones Industrial Average gained by 5% with big intraday swings. The NASDAQ 100 was up 7.4% for the week, as stocks that were heaviest hit in recent weeks bounced the highest.
The CBOE market volatility index remains elevated at 37.56, however has fallen dramatically since closing above 50 on Tuesday, the highest it had been since the onset of the pandemic.
S&P 500 Movers
Gainers: Broadcom +27.8%, United Airlines +17.4%, Newmont +17.3%, Dollar Tree +16.3%, GE Vernova +16%, Constellation Energy +15.7% CrowdStrike +15.2%
Losers: Charles River Laboratories -27.7%, AbbVie -12.5%, Devon Energy -11.8%, Occidental Petroleum -11.2%, IQVIA Holdings -11.1%, Crown Castle -11%
Notable Macroeconomic News
FOMC Minutes: Minutes from the last FOMC meeting were released. At the time, FOMC members concluded real GDP was expanding at a solid pace, unemployment was relatively low and inflation remained somewhat elevated. The Fed kept the federal funds rate unchanged in March at 4.25%-4.5% during its March 2025 meeting, extending the pause in its rate-cut cycle that began in January, in line with expectations. The Fed did raise their expectations for inflation for 2025 and 2026 and downgraded their 2025 growth forecasts, while still anticipating reducing interest rates by around 50 bps this year, the same as in the December projection. As the economic scenario changes, they will act as required to achieve their dual mandate of low inflation and full employment.
Inflation; The annual inflation rate in the US eased for a second consecutive month to 2.4% in March 2025, down from 2.8% in February, and below forecasts of 2.6%. Core Producer Price Index annual change fell to 3.3% from 3.5% bettering consensus estimates of 3.6%.
Consumer Sentiment: The Michigan Consumer expectations index fell to 47.2, the lowest level since May 1980. The survey also found the view of current economic conditions fell to 56.5, the lowest since June 2022 and well below expectation of 61.5. The year ahead inflation expectations in the United States rose to 6.7%, the steepest since November 1981, showing that public concerns about current and future economic conditions have deteriorated significantly since the post election rise in sentiment.
Notable Corporate Earnings
Delta Airlines began an ascent following its earnings, posting an earnings beat but jettisoned any guidance for future quarters given the tariff uncertainty on demand.
JP Morgan The bellwether of American banks beat market expectations for Q1posting a 9% year on year increase in profit and an 8% increase in revenue. However, CEO Jamie Dimon said in his comments that the economy remains volatile with persistent inflation, high deficits, and elevated asset prices and the trade war is causing considerable turbulence.
Wells Fargo: Produced a better-than-expected earnings result. Net income rising 6% over a year, but revenue down 3.4%. Its Q1 Earnings Per Share (EPS) was $1.39 vs FactSet estimates of $1.23. The result was driven by lower expenses whilst net interest margins fell.
Morgan Stanley: Q1 EPS of $2.60 was up from $2.02 a year prior and well above market expectations of $2.18. Revenue also increased 17%. The investment bank stated that they do not expect a U.S recession to eventuate.
Blackrock: Beat earnings expectations as well. With Q1 EPS of $11.30 up 15% for the year and beating estimates of $10.43. This was driven by rising revenues form net inflows into their funds and a favourable forex impact which offset market value declines. CEO Larry Fink said in an interview that he believed the U.S is close to, if not in a recession.
The Open: Monday 14th April
The weekend has bought further positive news with Donald Trump now putting a temporary tariff exemption on smartphones and other consumer electronics. This will be music to the air pods of Apple investors after the barrage of commentary and scary stories of iPhones being produced in the Unted States last week. Asian, European and UK investors will be playing catch up on the more constructive news flow from the oval office and the trading action from New York late on Friday.
Asian tech stocks and Chinese EV stocks have performed strongly. The Hang Seng up 2.1%, Nikkei 225 is up 1.2%, and the ASX 200 is up 1.35%. European shares have opened higher with the German DAX up 2.15%, French CAC is up almost 2% notably, Dutch chipmaker ASML is up about 4%. The FTSE 100 has opened around 125 points or 1.6% higher with broad based gains across most constituents in the index.
Dow Futures are 338 points higher, and S&P 500 Futures are pointing to a higher US open.
Week Ahead: 14th April -18th April 2025
Market Themes to Watch
- Smartphone & consumer electronics temporary tariff exemptions: Smartphones, laptops and equipment for chipmaking are among items temporarily exempt from China tariffs under new guidance from the government. This should be a boon for American consumers who were facing steep price rises and for investors in companies like Apple and NVIDIA whose products are among those exempted.
- Trade negotiations: Donald Trump will be ‘negotiator in chief’ in his administration’s chase for 90 trade deals in 90 days. This is extremely unlikely with most trade deals taking years of negotiation, however there is a queue of foreign delegates forming at the dealer’s table ready to negotiate, with The Times revealing that a breakthrough for the UK could be days away.
- S. Corporate Earnings: Reporting season ramps up in America with some big names reporting including Goldman Sachs, Citi, Johnson & Johnson and Netflix among those reporting this week.
- S. Inflation, retail sales and consumer expectations: Recession watchers will be closely eyeing consumer expectation surveys, industrial production and retail sales data as leading indicators for the state of the American economy. Fed watchers will be following the comments of Federal Reserve board of Governors and in particular Chair Jerome Powell to read into any dovish tones regarding interest rate cuts.
- K. Labor Market and Inflation: Data relating to two of the Bank of England’s main objectives will be printed by mid-week, giving potential clues about future rate decisions.
Upcoming Economic Data – U.K.
Retail Sales: Tuesday brings the BRC – KPMG Retail Sales Monitor for insights into the change in sales value from sampled retailers.
Labour Market: The Unemployment Rate, Average Earnings excl Bonusses and HMRC Payrolls change gets released on Tuesday to paint the picture of jobs growth. The unemployment rate is expected to remain at 4.4%.
Inflation: Core Inflation rate and UK CPI will be released on Wednesday. Consensus estimates place the inflation rate at 2.7% from 2.8% last month and 3% in February. Any surprise to the downside will give the BoE come clearance to recommence rate cuts.
Upcoming Economic Data – United States
Fed Speeches: Barkin, Waller and Harker (Monday), Bostic (Tuesday), Hammack (Wednesday), Chair Jerome Powell (Wednesday), Schmid (Thursday), Daly (Friday)
Retail Sales: (Wednesday) The Retail sales report in the US provides aggregated measure of sales of retail goods and services over a period of a month. Estimates are for a 1.3% increase, possibly due to expectation of consumers getting ahead of price increases.
Labour Market: Initial Jobless Claims (Thursday)
Production: NY Empire State Manufacturing Index (Tuesday), Industrial & Manufacturing Production (Wednesday), Philadelphia Fed Manufacturing Index (Thursday) are all being forecasted to contract for the month.
Housing: NAHB Housing Market Index (Wednesday) and, Building permits & Housing starts (Thursday) will give light on property prices and construction.
Upcoming Corporate Earnings
Goldman Sachs (GS): Expected to report earnings per share (EPS) increase of 9% year-over-year. Goldman has consistently beaten expectations in the past year, with the highest surprise in the previous quarter where they exceeded consensus by 48%.
Bank of America (BAC): Investors will watch for updates on loan growth and consumer credit trends.
Citigroup (C): Focus will be on investment banking performance and international exposure amid global economic uncertainties.
Johnson & Johnson (JNJ): Focus will be on pharmaceutical sales and any updates on medical device innovations.
United Airlines (UAL): Earnings will reflect travel demand trends and the impact of fuel prices on operational costs.
Abbott Laboratories (ABT): Notable for performance in diagnostics and medical devices, particularly considering recent healthcare trends.
The Progressive Corporation (PGR): The auto and home & contents insurer is expected to report an improvement in its top and bottom lines when it reports Q1 2025 results on Wednesday.
Netflix (NFLX): Investors will be keen on subscriber growth metrics and content spending, especially as the company adjusts its reporting format to exclude subscriber numbers.
UnitedHealth (UNH): In recent quarters, UnitedHealth has consistently exceeded expectations. In its last report, management reaffirmed robust forward guidance despite broader macroeconomic challenges.
Taiwan Semiconductor Manufacturing Company (TSMC): As a bellwether for the semiconductor industry, TSMC’s results will shed light on global chip demand and supply chain dynamics alongside commentary of the latest tariff disruptions.
American Express (AXP): Delivers Q1 earnings on Friday. Insights into consumer spending patterns, particularly in travel, hospitality and entertainment, will provide read through to the consumer discretionary sector.
Some reprieve for shell shocked investors has arrived. While the tariff exemptions have provided short-term relief, the underlying trade tensions and potential for further policy shifts continue to pose risks. Has the worst tariff news already come and gone? Are American recession expectations accurate? Are they already priced by the market? Might the Oval Office switch its attention to deregulation and tax cuts next? If so, what will the market do from here? Upcoming corporate earnings reports will add some influence to share prices this week, how will the numbers stack up and what commentary will we see? Another bipolar week could be ahead and as such, calm heads are still needed to prevail.
DISCLAIMER This article is for information purposes only and no part of it or its contents are deemed to be nor should be taken as advice. It does not constitute recommendations to buy or sell any securities mentioned. Past performance of investments is no guide to future returns and you may get back less than you invested. Capital at Risk.