Weekly Market Pulse - Week ending April 18, 2025
Market developments
Equities: Global stock markets experienced volatility this week, driven by U.S.-China trade tensions and Federal Reserve Chair Jerome Powell's comments on tariffs and economic growth. U.S. indices like the Dow, S&P 500 and Nasdaq dipped slightly on Tuesday but faced sharper declines Wednesday after Powell signaled no immediate interest rate cuts. Tech stocks like Nvidia and AMD were hit hard by U.S. chip export restrictions to China. Bank of America and Citigroup shares rose after reporting better-than-expected Q1 earnings, boosted by strong trading revenues. However, the S&P 500 remains down about 10% year-to-date, reflecting ongoing tariff-related uncertainty.
Fixed Income: U.S. Treasury bonds rebounded slightly after a turbulent week, as markets adjusted to tariff relief hopes and Powell’s remarks suggesting the Fed is in a wait-and-see mode. A sell-off in U.S. Treasuries earlier raised concerns about waning long-term confidence in the U.S. economy, with investors demanding higher yields to compensate for perceived risks.
Commodities: Crude oil futures rose after U.S. sanctions on Chinese importers of Iranian oil sparked global supply concerns, lifting oil and gas stocks. Gold futures climbed, reflecting its safe-haven appeal amid geopolitical and financial uncertainties, though buying momentum showed signs of easing.
Performance (price return)
SECURITY |
PRICE |
WEEK |
1 MONTH |
3 MONTH |
YTD |
Equities ($Local) |
|
|
|
|
|
S&P/TSX Composite |
24,192.81 |
2.56% |
-2.39% |
-3.49% |
-2.16% |
S&P 500 |
5,282.70 |
-1.50% |
-6.91% |
-11.91% |
-10.18% |
NASDAQ |
16,286.45 |
-2.62% |
-8.55% |
-17.03% |
-15.66% |
DAX |
21,205.86 |
4.08% |
-8.42% |
1.45% |
6.51% |
NIKKEI 225 |
34,377.60 |
2.36% |
-8.07% |
-10.59% |
-13.83% |
Shanghai Composite |
3,280.34 |
1.30% |
-4.26% |
1.19% |
-2.13% |
Fixed Income (Performance in %) |
|
|
|
|
|
Canada Aggregate Bond |
237.23 |
1.12% |
-0.64% |
1.31% |
0.79% |
US Aggregate Bond |
2232.29 |
0.91% |
-0.22% |
2.00% |
1.98% |
Europe Aggregate Bond |
244.99 |
0.65% |
1.82% |
1.20% |
0.50% |
US High Yield Bond |
26.78 |
1.26% |
-1.41% |
-1.01% |
-0.18% |
Commodities ($USD) |
|
|
|
|
|
Oil |
64.34 |
4.62% |
-4.79% |
-17.39% |
-10.29% |
Gold |
3321.67 |
2.60% |
10.70% |
22.88% |
26.56% |
Copper |
470.35 |
3.99% |
-4.66% |
7.67% |
16.81% |
Currencies ($USD) |
|
|
|
|
|
US Dollar Index |
99.39 |
-0.71% |
-3.85% |
-9.11% |
-8.39% |
Loonie |
1.3838 |
0.27% |
3.25% |
4.62% |
3.95% |
Euro |
0.8791 |
0.17% |
4.14% |
10.73% |
9.87% |
Yen |
142.39 |
0.81% |
4.79% |
9.77% |
10.40% |
Source: Bloomberg, as of April 17, 2025
Central Bank Interest Rates
Central Bank |
Current Rate |
June 2025 |
December 2025 |
Bank of Canada |
2.75% |
2.60% |
2.26% |
U.S. Federal Reserve |
4.50% |
4.15% |
3.55% |
European Central Bank |
2.25% |
1.94% |
1.51% |
Bank of England |
4.50% |
4.09% |
3.60% |
Bank of Japan |
0.50% |
0.51% |
0.61% |
Source: Bloomberg, as of April 17, 2025
*Expected rates are based on bond futures pricing
Macro developments
Canada – Canada’s Inflation Decline
Canada’s inflation rate dropped to 2.3% in March from 2.6%, below market and Bank of Canada expectations. The end of GST/HST tax breaks increased food prices, particularly at restaurants, while falling gasoline and cellular costs slowed transportation inflation. Monthly prices rose by 0.3%.
U.S. – Retail Sales Surge
U.S. retail sales rose 1.4% in March, the largest increase since January 2023, driven by a 5.3% jump in motor vehicle sales. Most sectors, including building materials and food services, saw gains, though gasoline and furniture sales declined. Core retail sales, excluding key categories, grew 0.4%.
The core PCE deflator likely rose by just 0.05% month-on-month in March, suggesting annual core PCE inflation dropped to 2.6%. Despite softer-than-expected CPI and PPI data, with producer prices falling 0.4% and core PPI up only 0.1%, tariff pressures in PPI raise concerns. A sharp 8.2% drop in international airfares and a 0.3% decline in hospital prices helped temper inflation, but the Fed remains wary.
International – Steady U.K. Unemployment, U.K. Inflation Eases, China’s Robust GDP Growth, China’s Retail Sales Boom
The U.K. unemployment rate remained at 4.4% from December to February 2025, the highest since May 2024. Employment rose by 206,000 to a record 34 million, driven by full-time jobs, while economic inactivity slightly decreased to 21.4%.
U.K. inflation slowed to 2.6% in March 2025 from 2.8%, below forecasts. Declines in recreation, transport and hospitality prices, particularly motor fuel, drove the slowdown, while clothing prices rose. Core inflation eased to 3.4%, with monthly CPI up 0.3%.
China’s economy grew 5.4% in Q1 2025, exceeding expectations and matching the prior quarter’s pace. Strong industrial output, retail sales, and exports, alongside Beijing’s stimulus, supported growth, though trade tensions with the US threaten the outlook.
China’s retail sales grew 5.9% in March 2025, the strongest since December 2023, surpassing forecasts. Most categories, including food, appliances and automobiles, saw significant gains, though petroleum products declined. First-quarter retail sales rose 4.6%.
Quick look ahead
DATE |
COUNTRY / REGION |
EVENT |
|
SURVEY |
PRIOR |
20-Apr-25 |
China |
1-Year Loan Prime Rate |
|
3.1 |
3.1 |
20-Apr-25 |
China |
5-Year Loan Prime Rate |
|
3.6 |
3.6 |
22-Apr-25 |
Japan |
Jibun Bank Japan PMI Mfg |
Apr P |
|
48.4 |
22-Apr-25 |
Japan |
Jibun Bank Japan PMI Services |
Apr P |
|
50.00 |
23-Apr-25 |
Eurozone Aggregate |
HCOB Eurozone Manufacturing PMI |
Apr P |
47.5 |
48.6 |
23-Apr-25 |
Eurozone Aggregate |
HCOB Eurozone Services PMI |
Apr P |
50.5 |
51.0 |
23-Apr-25 |
United Kingdom |
S&P Global UK Manufacturing PMI |
Apr P |
44.0 |
44.9 |
23-Apr-25 |
United Kingdom |
S&P Global UK Services PMI |
Apr P |
51.5 |
52.5 |
23-Apr-25 |
United States |
S&P Global US Manufacturing PMI |
Apr P |
49.3 |
50.2 |
23-Apr-25 |
United States |
S&P Global US Services PMI |
Apr P |
53.0 |
54.4 |
25-Apr-25 |
United Kingdom |
Retail Sales Ex Auto Fuel YoY |
Mar |
2.0 |
2.2 |
25-Apr-25 |
Canada |
Retail Sales Ex Auto MoM |
Feb |
(0.1) |
0.2 |
P = Preliminary
The Asset Allocation Team at NEI Investments
Judith Chan, CFA – Vice President, Head of Multi-Asset Portfolios
Mateo Marks, CFA – Senior Multi Asset Portfolio Analyst
Adam Ludwick, CFA – Senior Multi Asset Portfolio Analyst
Anthony Rago, B.A.Sc. – Senior Multi Asset Portfolio Analyst