Weekend Update, April 21st, 2025

April 22, 2025

Too Much Washington DC Last Week

Index, Sector & Asset Performance

U.S. stocks started last week positive on hopes President Trump’s tariff exemptions were a small step toward an eventual trade deal with China. That optimism lasted about 24 hours as no deals have been made, the US policies toward its trading partners have become more extreme, and foreign investors look to sell US assets. The S&P 500 index fell -1.5% last week ending at 5282. The index is down -5.9% for April and -10% from where it ended 2024.The declines were led by technology stocks with their international exposure and another flop by the administration restricting semiconductor sales to China. Wednesday morning, Nvidia said it would record a $5.5 billion charge on its quarterly earnings, after the U.S. required a license for exporting the company’s lower end H20 processors to China and other countries. Nvidia (NVDA) fell -8.6%. Advanced Micro Devices (AMD) shares also fell -6.4%, as the company also faces new restrictions on exporting advanced microchips, used for artificial intelligence applications, to China. Amazon.com (AMZN) was hit hardest in the consumer discretionary sector, falling -6.6%. The real estate and energy sectors of the S&P 500 were the top gainers last week, up +3.9% and +3.2%, respectively.

Q1 earnings season kicked off last week with major financials reporting mostly strong results, pushing the sector up +0.86% for the week.

Additional volatility was caused late in the week before the Easter weekend by the administrations ramping up talk against the Federal Reserve. US President Donald Trump called for the termination of Federal Reserve Chair Jerome Powell, adding to investors’ concerns. The president said in a social media post on Thursday that Powell should “certainly” lower interest rates. “Powell’s termination cannot come fast enough,” Trump said. This talk got worse this last weekend from the White House and is causing further downward moves in stocks, the dollar, and upward moves in interest rates and gold. The consumer discretionary sector and information technology sector were the worst performers, down -3.2% and -3.6%, respectively. The growth-oriented Nasdaq Composite fell -2.6%.

On the tariffs front, the percentage imposed by the U.S. on China was ramped higher to an absurd 245%. This is a trade embargo, not a tariff.

The MSCI EAFE Index has outperformed the S&P 500 by +18% in USD terms since the start of the year. The calls by major financial networks of US Exceptionalism in early 4q24 proved near perfect correlation to S&P 500 4q24 top on Dec 6th of 6100.

A summary of last week’s negative returns, ex-Gold, from FS Investments:

Last week's equity returns chart.

10-year Treasury yields fell -17 bps last week to 4.33%. Fed rate cutting expectations remained steady, with 90bps of cuts priced this year and the first cut after May’s meeting in June.

Economic Indicators and Earnings Commentary

March housing starts declined by -11% compared to a month earlier to a 1.32 million annual rate, according to the US Census Bureau, compared with the 1.42 million estimates compiled by a Bloomberg survey. Wednesday brings the Fed’s Beige Book. On Thursday, durable goods orders look advance in March, though the figures are flattered by tariff front-running.

Retail sales rose +1.4% m/m, driven by auto purchases and tariff-related pull-forward spending. Weekly initial jobless claims fell to 215k, the lowest in more than two months, indicating firms have not begun layoffs amid economic uncertainty.

Gold shot higher by another +2.7% finishing above $3,300/oz for the first time ever. Bitcoin looks like it is trying to base at $85k and is up about +3% this morning.

The U.S. dollar continued lower to 100, down -10% from its 4q24 peak when most strategists were worried about its strength. This weekend’s talk of firing J. Powell has the dollar down again this morning. It’s likely to late to get good deals on European travel this summer.

1Q25 Earnings season ramps in full force this week including Google. Others on tap per Goldman,

  • Transport: BA, LUV, NSC, ODFL, UNP
  • Healthcare: ABBV, BMY, MRK, GILD, ISRG, BSX, EW, HCA, DHX, DHR, TMO
  • Industrial: GE, GEV, LMT, MMM, NOC, RTX, APH, OTIS, LII, DOW, DOV, TXT, WY
  • Financials: SYF, COF, DFS, RJF, AMP, CBRE, FI, NDAQ, MCO, MSCI, NTRS
  • Telcom: VZ, T, TMUS, CHTR
  • Tech: NOW, DLR, IBM, TXN, LRCX, INTC
  • Consumer: CMG, ORLY, LVS, HAS, KDP, PEP, PG, CL, TSCO, POOL, PHM, MAS
  • Energy: BKR, SLB, PSX, ENPH, STD, NEM, EQT, NEE, FE, VLO, XEL

Oak Harvest Weekly Stock Talk

Sometimes: You Gotta Close Your Eyes and Buy (or Laugh)

Week Ending 4/18/2025 tables.

Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.

The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Past performance is no guarantee of future results. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.