| Name | Daily Close | Daily Change | Daily Change (%) |
|---|---|---|---|
| Dow | 40,227.59 | 114.09 | 0.28% |
| S&P 500 | 5,528.75 | 3.54 | 0.06% |
| Nasdaq | 17,366.13 | -16.81 | -0.10% |
| VIX | 25.15 | 0.31 | 1.25% |
| Gold | 3,346.80 | -0.9 | -0.03% |
| Oil | 62.01 | -0.04 | -0.06% |
US MARKET
US markets pared early losses and largely finished flat. The S&P 500 finished flat, the Nasdaq 100 the same, the Dow Jones Industrial Average was marginally up by circa 0.3%. Short-term Treasuries outperformed. The dollar fell. Gold was up circa 0.9%. The VIX is now down to 34.
Investors this week will search earning results from Microsoft Corp., Apple Inc., Meta Platforms Inc. and Amazon.com Inc. for signs of how they’re being affected by tariff developments. News that China’s Huawei Technologies Co. is set to test a new chip to rival Nvidia Corp. also hurt sentiment. By the way, Spotify (the US shares) and which reports tomorrow is up 35% ytd (tariff and recession proof, just like Netflix). From jobs to inflation and economic growth, the pace of economic data will be just as strong this week.
With a jittery April near a close, several market participants see little reason to think volatility is in the rearview mirror. For equities to extend the recent rally, investors would need to see the White House follow through on the “dovish pivot” toward trade with China. Underneath the surface, key risks persist — trade tensions, recession worries, and monetary policy uncertainties are very much alive.
For those inclined to be more bullish on the market, we note that JPMorgan Chase & Co. has turned from tactically bearish to tactically bullish on US equities, predicting that tailwinds including Big Tech earnings and trade deal announcements will continue to lift stocks after the recent rout. However, the bank was quick to emphasize in a note to clients Monday that the rally’s momentum could fade within weeks, with the negative impacts of US tariffs poised to begin dragging on the economy in the months ahead.
What we found most interesting is they said that their latest call differs from past bullish views because it’s largely based on technical factors rather than just fundamentals. The note stated that the combination of light positioning, low liquidity, subdued investor participation means that the market is likely to drift higher in the absence of negative news such as tariff headlines or a spike in bond yields.
LOCAL MARKET
The S&P/ASX 200 Index rose 0.36% to close at 7,997 on Monday, hitting its highest levels in seven weeks during the session as easing global trade tensions lifted investor sentiment.
Financial stocks led the gains, with National Australia Bank advancing 1.7%, ANZ Group rising 1.6%, and Westpac Banking climbing 0.8%. Other heavyweight names also posted solid gains, including CSL Ltd (+1%), Wesfarmers (+1.4%), and James Hardie Industries (+1.2%). Tech stocks also posted gains tracking the Nasdaq higher, with NextDC advancing 2.5% and TechnologyOne adding 3.1%. Miners were one outlier on the ASX among the sea of green with BHP off 1.1%. Gold stocks tracked a fall in the precious metal as investors recycled capital from safe-haven assets into equities.
Meanwhile, the AFR has written a great article about how tariffs are hurting Australian earnings more than expected. The article notes that we got two great examples on Monday: travel group Flight Centre, which slashed expectations for profit growth this financial year, and pallets group Brambles, which blamed “macroeconomic uncertainty” for weaker-than-expected sales growth.
While you could be forgiven thinking that over the last two months Australian economic data has been irrelevant to both equities and bond markets, both will be focused on the quarterly CPI figure on Wednesday. The markets are expecting the RBA to cut in May. But next month’s cut is predicated on official consumer price data to be released this week, highlighting the importance of Wednesday’s report. The market consensus is for inflation to tick up 0.8% in the three months to March 31, pushing the annual pace from 2.4% to 2.3%. More crucial is the core inflation measure, which strips out the most extreme moves. That is expected to increase 0.7%, taking the annual inflation rate watched by the RBA from 3.2% to 2.9%.