The Pinnacle: April 2025

Written By TallRock Capital

April 2 0 2 5 • I S S U E 52

April Markets

April 2025 proved to be a testament to market resilience amid policy shocks and geopolitical uncertainty. Although US equities were initially shaken by the “Liberation Day” tariffs announced early in the month, most indices regained significant ground, highlighting investor optimism and structural economic stability. Markets across Europe and Asia also demonstrated constructive momentum, supported by corporate earnings and favourable valuations. Commodity prices told a mixed story, with gold continuing its upward march while oil faced headwinds.

US Markets

The US market began April under pressure following the announcement of sweeping new tariffs under President Trump’s “Liberation Day” initiative. The move caused major indices to fall, with fears of the possible macroeconomic headwinds that could be caused by these tariffs, however, the markets bounced back strongly. The S&P 500 ended the month down just 0.7%, and the Nasdaq Composite gained 0.9%, supported by a tech-sector rally and a late-month rollback on certain tariff provisions, especially for consumer electronics. The Dow Jones Industrial Average still declined by 3.1%, but clawed back much of its losses in the final two weeks. This recovery reflected investor belief that trade negotiations would ultimately support business activity.

Eurozone

European equities showed steadiness in the month of April. The MSCI Europe ex-UK index closed down only 0.4% for the month. Notably, European companies are expected to see earnings growth of 0.4% for the first quarter of 2025, reversing previous expectations of a 1.7% decline. Approximately 58.4% of STOXX 600 companies that have reported thus far  have beat analyst forecasts, boosting investor confidence in the region. The euro has strengthened 9% year-to-date (YTD), reaching a three-year high against the US dollar, which could weigh on exports but also signals global confidence in the region’s economic outlook.

UK Markets

The FTSE 100 posted a historic 15-day winning streak, its longest in over a decade, ending up 1.2% for the month. Optimism was driven by signs that global trade frictions might ease and by strong corporate results in the energy and financial sectors. Adding to the positive sentiment, UK inflation data showed further signs of easing. Headline CPI rose by 2.6% year-on-year in April, slightly down from 2.8% in March and lower than the 2.7% expected. 

Asia Emerging

Asia's emerging markets showed continued resilience. The MSCI Asia ex-Japan index rose by 0.3%, benefiting from improving sentiment on hopes of US–China trade talks. India and Southeast Asia saw particular strength, underpinned by robust local demand and upward earnings revisions. With regional equities still trading at a discount to US counterparts, the environment proved favourable for renewed inflows into Asian markets.


Commodities

Commodities posted mixed performances over April 2025, with oil emerging as the primary underperformer and Brent Crude dropping back down to 2021 levels. This was largely due to softening global demand expectations and increased output from OPEC+. In contrast, gold gained nearly 6% to end the month. This was supported by global uncertainty and a more dovish interest rate outlook, which reinforced its role as a safe-haven asset.

Conclusion

April 2025 reinforced the importance of a long-term focus in an investment strategy. Despite headline risks such as new tariffs and currency movements, global markets demonstrated a strong ability to rebound and recalibrate. With corporate earnings beating expectations, monetary conditions still supportive, and valuations attractive in select regions, long-term investors remain well-positioned heading into mid-year.

Adapting to Tariff Turbulence: How Global Firms Are Reshaping Supply Chains in 2025

As the global economy navigates the complexities of renewed trade tensions, multinational corporations are strategically overhauling their supply chains to mitigate the impacts of the Trump administration's tariffs. These measures, including a 145% tariff on Chinese imports and a 10% levy on all other imports, have prompted companies to diversify manufacturing bases and explore new markets.

Apple's Strategic Shift to India

Apple has taken significant steps to reduce its reliance on Chinese manufacturing. In response to the heightened tariffs, the company plans to shift the majority of iPhone production for the US market to India by the end of 2026. This move involves collaboration with key manufacturing partners, Foxconn and Tata, to expedite the transition. 

In March 2025, Apple's suppliers in India exported nearly $2 billion worth of iPhones to the United States, marking a record high. This included a significant airlift of 600 tons of iPhones to ensure sufficient inventory ahead of the tariff implementation. 

While manufacturing in India is currently 5-10% more expensive due to higher import duties on components, the strategic diversification aligns with Indian Prime Minister Narendra Modi's push to position India as a global smartphone production hub. The US's lower tariffs on Indian imports compared to Chinese products further support Apple's relocation efforts. 

Retailers Pivoting to Europe

The retail sector is also undergoing significant realignment. Companies like Mattel and fashion group OTB are adjusting supply chains and marketing strategies to mitigate the negative effects of US tariffs. Mattel, for instance, has redirected production of its UNO game to avoid tariffs, while OTB plans to increase US prices by up to 9%. Chinese e-commerce giants Shein and Temu are ramping up European advertising as US tariff pressures threaten their dominant American operations. Temu has also discontinued direct shipments from China to US consumers, adapting to new American tariff regulations. The company will now fulfill all US sales through domestic sellers, a significant shift likely to impact its market scale. 

Automotive Industry Adjustments

The automotive sector is not immune to the tariff impacts. President Trump's announcement of a 25% tariff on all imported cars, including those from Mexico and Canada, has led companies like Stellantis to temporarily close factories in Canada and Mexico and lay off some American employees. While some relief measures have been introduced, such as exemptions for USMCA-compliant auto parts, the industry continues to grapple with increased costs and supply chain disruptions. 

The current trade environment underscores the importance of supply chain diversification and strategic agility. Companies that proactively adapt to these challenges by exploring new markets and adjusting their operations are better positioned to navigate the complexities of global trade. As the landscape continues to evolve, staying informed and responsive will be key to maintaining resilience and competitiveness.

Sources

TallRock Capital https://www.tallrockcapital.com
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The Pinnacle: March 2025