Monthly Review - April 2025

In brief

Global macroeconomics
Lack of clarity on US tariffs, as policy swings day by day.
Central banks
Markets whipsaw on uncertainty over the US Fed’s independence.
Reporting season
Corporate leaders talk of rising costs and supply chain disruption.

The markets

April Calendar

-0.8%

S&P 500

-2.5%

CAC 40

-1.2%

FTSE MIB

-1.7%

EURO STOXX 50

1.5%

DAX

1.2%

IBEX 35

-1.0%

FTSE 100

2.2%

BEL 20

0.3%

TOPIX

Source: Bloomberg 30.04.2025, returns in local currency


Top stories

Tariffs yoyo
Global macroeconomics

Tariffs yoyo

Liberation Day, so called by President Trump, saw tariffs averaging just over 20% imposed with immediate effect on all US trading partners. The imposition was then postponed for 90 days for all except China, whose levies were ramped up to 145%. US Treasury Secretary Scott Bessent later conceded these levels were “unsustainable”. Meanwhile, China urged the EU among others to maintain multilateral trade. The IMF (International Monetary Fund) cut global growth forecasts, particularly for the US, claiming tariffs will decrease competition and innovation in the long term. Nonetheless, the IMF’s forecasts would improve immediately once new trade agreements are forged.

Fighting the Fed?
Central banks

Fighting the Fed?

After the US Federal Reserve (Fed) expressed concerns over escalating tariffs, President Trump ramped up criticism of Fed Chair Jay Powell. His negative rhetoric caused financial markets to doubt the future independence of the world’s most significant central bank. The US dollar was at the centre of the ensuing storm, dubbed the “sell America” trade, while US equities were also hit. Market calm was restored when the president pivoted, claiming he had no intention of firing Mr Powell. Amid chaos and confusion, the price of gold, the ultimate safe haven asset, hit $3,500 for the first time.

The corporate consequences
Reporting season

The corporate consequences

The Q1 earnings season got underway, with analysts keen to hear whether company bosses could see a way through the tariff labyrinth. Instead, they warned of supply chain difficulties and rising costs, even of higher prices to consumers. The CEO of Mercedes described the highest complexity for thirty years, with the company’s imports and exports both impacted by tariffs. Many business leaders highlighted the risk of recession, with the US potentially the worst affected area. Meanwhile, Nvidia predicted a $5.5 billion profit hit, after the sale of its lower-powered AI microchips to Chinese clients was banned altogether.

Resilient China green tech
Responsible investing

Resilient China green tech

Chinese green energy stocks have largely shrugged off the surge in US tariffs. They may be effectively blocked from the US, but strong growth prospects in domestic and European markets are more than compensating for the lack of US sales. While 15% of overall Chinese exports were bound for the US up till recently, that figure was only 4% for Chinese exports of solar and wind technology and electric vehicles. Meanwhile, shares of clean energy companies in the US have fallen, reflecting higher input costs, given that the US’s limited domestic production of batteries and solar cells will require further imports.


On the radar

Illustration of an orange radar

Is President Trump already struggling to implement his disruptive agenda? At the time of writing, China has not asked for trade talks with the US, while the remaining ‘Liberation Day’ tariffs were suspended for 90 days after the US Treasury market took fright. Meanwhile, US courts continue to challenge mass deportations.

With the likelihood of stagflation rising in the US, the Federal Reserve faces a dilemma. Does it cut rates to support a weakening economy, or stick with its inflation-fighting credentials to offset the impact of higher import tariffs into the US?

Geopolitical tensions are unlikely to wane in the near term. Ceasefire attempts between Russia and Ukraine have stalled; Israel is once again in Gaza; tensions between India and Pakistan have soared after violence in Kashmir; and China has claimed more territory in the South China Sea.