Financial markets 29/04/2025
A less aggressive approach by the US government on tariffs has significantly reduced uncertainty in financial markets, at least in the short term, and has encouraged investors to increase their investment levels, resulting in a very positive week for world stock markets. The S&P recovered 4.59% for the week to end at 5,525.21 points, the Nasdaq 100 gained 6.43% to end at 19,432.56, while in Europe the Euro Stoxx 50 closed at 5,156.05 points and the Ibex 35 at 13,353.50 points, up 4.47% and 3.37% respectively.
It is noteworthy that the strong recovery has occurred when the markets have calmed down (remember that the most representative indexes fell between 15% and 25% in just 7 weeks). Since the lows, the recoveries have also been notable, but they have not been homogeneous. The Ibex 35 is less than 3% from its annual high, the Eurostoxx is 8% below, and the worst part is left to the United States, as the Nasdaq 100 needs to recover another 14% to return to record highs, while the S&P is 11% away from that target. The tariff announcement is going to leave a bigger negative impact on the US economy in the view of equity investors.
The week in the bond markets can be described as quiet, as variations were minimal, but it was not without some volatility. The 10-year Treasury corrected 8 bps to close with a yield of 4.25%, still far from the 3.90% it was at before the sharp sell-off a few days ago. In Europe, the Bund rose 1 bps to 2.47% and the Bond fell 4 bps to 3.13%. Once again we see that, with some calm, the markets are returning to normal. Or at least a part of it.
The assumption of this calm is corroborated by the movement of gold, which closed unchanged for the week, but 5.10% below the new all-time high of 3,509.06 USD/Onz at the beginning of the week. For its part, Brent yielded 1.44% to close at 66.98 USD/b, partly due to the slight rise in the USD and partly due to the theoretical oversupply in the market at this time.
As we anticipated 7 days ago, the macroeconomic data did not bring anything relevant. In Europe, we highlight the PMI data, with a better manufacturing PMI (48.7) and a worse services PMI (49.7). In the United States, PMIs were released (50.7 and 51.4 respectively), durable goods orders surprised strongly to the upside, growing by 9.2% against the expected figure of 2.1%, and, finally, consumer confidence data from the University of Michigan improved expectations, but remained in the lows zone.
Important macroeconomic data will be released throughout the week. In China, PMIs for April will be released, in Europe: i) GDP (provisional) for the first quarter of 2025, ii) unemployment rate, and iii) provisional CPI for April. In the United States: i) The Conference Board consumer confidence indicator, ii) labor market surveys including non-farm payrolls and unemployment rate, and iii) March PCE data.
The earnings season is progressing positively, with 179 S&P 500 companies having already released their results with an average EPS growth of 9.7% versus the forecast of 6.7%. Positive surprises account for 74% while negative surprises account for 21%.
The phrase:
And we say goodbye with the following phrase from pope Francisco: «No to the new idolatry of money! No to money that governs instead of serving! Money must serve and not govern«.
Summary of the performance of the main financial assets (28/4/2025)
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This document has been prepared by Portocolom Agencia de Valores S.A. for the purpose of providing general information at the date of issue of the report and is subject to change without notice. Portocolom Agencia de Valores S.A. assumes no obligation to communicate such changes or to update the contents of this document. Neither this document nor its contents constitute an offer, invitation or solicitation to purchase or subscribe for securities or other instruments or to make or cancel investments, nor may they form the basis of any contract, commitment or decision of any kind.
The information contained herein has been obtained from public sources believed to be reliable, and while reasonable care has been taken to ensure that the information contained herein is neither uncertain nor unequivocal at the time of publication, we do not represent that it is accurate and complete and it should not be relied upon as if it were. Portocolom Agencia de Valores S.A. assumes no responsibility for any loss, direct or indirect, that may result from the use of the information provided in this report. Past performance of variables may not be a good indicator of future performance.