Market snapshot: week begins with an uneasy calm
As well as absorbing any new developments on US tariff policy, investors also have a swathe of results to consider from some of the world's largest companies. ii's head of markets has the latest.
28th April 2025 08:21
by Richard Hunter from interactive investor
An uneasy calm has descended on markets, with a sense that no news is good news in respect of any further tariff announcements, for the time being at least.
Left to their own devices without the major distractions of the confusing messages emanating from the White House, investors have gone back to their knitting temporarily and markets have edged slightly higher as a result, although not by enough to repair the damage which has already been wrought. Indeed, in the year to date, the Dow Jones remains down by 5.7%, the benchmark S&P500 by 6.1% and the Nasdaq by 10.5%, the latter of which will face extra scrutiny over the coming days.
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Updates are due from several members of the “Magnificent Seven”, with numbers from Meta Platforms Inc Class A (NASDAQ:META), Amazon.com Inc (NASDAQ:AMZN) and Microsoft Corp (NASDAQ:MSFT). In addition, Apple Inc (NASDAQ:AAPL) will report amid the uncertainty around sales of its iPhone, especially in China, let alone the effect on its supply chains which have helped to push the shares down by 14% so far this year.
In addition, there will be further colour added to the state of other pockets of the economy, with updates from the likes of Caterpillar Inc (NYSE:CAT), Mastercard Inc Class A (NYSE:MA), Visa Inc Class A (NYSE:V), Chevron Corp (NYSE:CVX) and Exxon Mobil Corp (NYSE:XOM). The reporting season so far has been a mixed bag, with outlook comments unsurprisingly hesitant and with positive earnings surprises being lower than usual.
On the economic front, there will be inflation and GDP releases swiftly following another survey which revealed a continuing weakness in consumer sentiment, with the speed of the decline at levels not seen since the recession of 1990.
The week is then rounded off with non-farm payrolls data, where the current consensus that 130,000 jobs will have been added in April compared to 228,000 the previous month is accompanied by a forecast of 4.2% in the unemployment rate, which would be unchanged. The combination of these numbers will of course inform the Federal Reserve, where an interest rate cut seems unlikely before June at the earliest.
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Asian markets made limited progress overnight, unable to free themselves from the tariff shackles where there was some confusion last week as to whether the US and China were in talks at all, a fact which the Chinese authorities denied. In the meantime, there are announcements expected today on economic growth and development and the employment situation, which is hot on the heels of comments over the last few days that plans to boost the economy in addition to the stimulus measures already announced could be imminent.
UK markets also made cautious progress at the open, with a broad mark up of blue-chips sending the premier index higher, bolstered by some upbeat broker comments on stocks such as Berkeley Group, lifting the index to stand higher by 3.4% so far this year.
In the FTSE250, an index which has struggled to maintain its earlier gains and is currently down by 4.4% in the year to date, a reminder that M&A activity is still possible despite the current uncertainty came as Deliveroo (LSE:ROO) revealed it is minded to accept a takeover offer from US rival DoorDash, sending its shares some 16% higher.
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There is also a busy reporting week to come domestically, with updates from the oil majors and the pharmaceuticals, as well as a half-year report from Primark owner Associated British Foods (LSE:ABF). Cautious consumer sentiment could also have had an effect on Primark despite its value reputation, and AB Foods have managed a gain of around 8% this year although the shares are down by some 16% over the last 12 months.
However, the first-quarter reporting season from the UK banks is likely to top the agenda. Each has had a strong share price run leading into the numbers, with the recent read across from the US banks providing some comfort. That being said, and as with their Stateside peers, outlook comments are likely to be highly cautious given the current global backdrop and any notable increases in impairment provisions would likely be met with some disappointment.
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