Market Recap - Week of Apr. 21 through Apr. 25, 2025
- Gordon Achtermann, CFP®, CSRIC®, MBA
- May 1
- 3 min read
The S&P 500 index rose 4.6% this week, led by technology stocks amid better-than-expected earnings from a number of companies in the sector, including Google parent Alphabet (GOOGL, GOOG).
The S&P 500 ended Friday's session at 5,525.21. The index is still down 1.5% for the month and 6.1% this year on concerns about the economic impacts of the ongoing trade war between the US and several countries, including China. Both Chinese officials and US President Donald Trump, however, softened their tone this week.
US consumer sentiment waned for the fourth straight month in April as uncertainty around tariffs dampened expectations and pushed the year-ahead inflation outlook to the highest point since 1981, final results from the University of Michigan's Surveys of Consumers showed Friday. While the April reading of 52.2 was down from 57 in March, it was still above the consensus view for 50.5 in a poll compiled by Bloomberg.
On the earnings front, Alphabet was in the spotlight as the Google parent not only released better-than-expected Q1 results but also said its board raised its quarterly dividend by 5% and authorized the repurchase of up to another $70 billion in class A and C shares. The company's shares rose by about 7% on the week.
Economic data will include Q1 gross domestic product, March personal consumption expenditures, and the closely watched April employment report and unemployment rate. |
Key data last week
· The University of Michigan Survey of Consumers for March posted a reading of 57.9, a 10.5% decline from February and below the Dow Jones consensus estimate for 63.2. While the measure is often prone to disparities between parties, survey officials said sentiment slumped across partisan lines along with virtually all demographics.
· April US services and manufacturing purchasing managers' indices (PMIs) were mixed. For this statistic, readings above 50 indicate growth and below 50 indicate contraction. Manufacturing PMI was up slightly but still anemic, moving from 50.2 to 50.7, but the services sector fell from 54.4 to 51.4.
· March home sales were up 6% year over year and up 7.4% from the revised February figure.
· Durable goods orders were up strongly due to increased aircraft orders. However, that may reverse in the wake of the ongoing trade war.
S&P 500 Sector and Stylebox Returns
Thought of the week
As the world braces for the tariff impacts on the global economy, the IMF's latest forecasts, notably weaker than the last revision in October 2024, highlight which countries are likely to bear the brunt of the trade war. Unsurprisingly, the U.S. experienced one of the most significant growth downgrades since last October, from 2.7% to 1.8% in 2025. There were also large downward revisions for countries dependent on U.S. exports, such as Mexico (1.4% to -0.3%), South Korea (2.0% to 1.0%), Vietnam (6.1% to 5.2%), and Canada (2.0% to 1.4%). While domestic factors contributed to the downgrades as well, trade tensions and policy uncertainty were key considerations. Tariffs also offset the expected growth boost from positive changes in countries such as Japan (rising inflation and wages) and Germany (increased government spending).
Other key indicators also reflect tariff impacts. Although the U.S. composite PMI surprised positively at 51.2 in April, new export orders plunged by 3.9 points to 47.2, suggesting that U.S. trading partners are pulling back. Additionally, Korea's first 20-day exports, a crucial indicator of global trade health, fell5.2%y/y in April, weighed down by shipments to the U.S. Yet, semiconductor exports, spared from tariffs for now, surged 10.7%.
Order frontloading might not be over, especially for products that remain exempt, which could keep some data points steady for longer. However, this summer could usher in significantly softer data and higher inflation. As the war continues, more market volatility is expected. Investors should bolster their portfolios with defenders like core bonds and liquid alternatives and consider adding exposure to less-impacted markets, like Europe and India.
(Source: JP Morgan)
Up Next
Economic data out this week will include
The first estimate of 1Q 2025 GDP,
Nonfarm payrolls,
The JOLTS report (Job Openings and Labor Turnover Survey), and
PCE (Personal Consumption Expenditures), Fed Chair Powell's preferred inflation metric.
.
All the Best,
Gordon Achtermann, CFP®
703-573-7325
Your Best Path Financial Planning
