April 25th Market Overview

Happy Friday.

Tech kept pushing higher while traditional sectors lagged - feels like we’re in two different markets right now.

Next week’s big tech earnings will tell us if this recovery has legs. For now, I’m enjoying my weekend knowing we didn’t end April as badly as it looked on Monday.

A personal ask - Please consider checking out today’s sponsor it buys me a sip of coffee. It's free, fast, and keeps these insights coming daily.

Let's dig in...

Executive Summary

• S&P 500 and Nasdaq capped off a strong weekly comeback while the Dow lagged
  

• President Trump indicated a Japan trade deal is “very close” while maintaining China tariffs won’t drop without substantial concessions
  

• Consumer sentiment plunged to near-record lows according to the Michigan survey, marking the steepest three-month decline since the 1990 recession
  

• Companies actively responding to trade shifts - some investing domestically while others cut guidance

Market Overview

Key Market Drivers

1. Trade Developments: Trump expects to announce “200 deals” soon and considers high tariffs a “total victory.” China plans monetary easing to counter effects, while Moody’s downgraded U.S. port outlook, projecting 7-12% volume drops.
   

2. Guidance Turning Cautious: Q1 appears to be 2025’s earnings peak as companies issue conservative forecasts. Intel $INTC ( ▼ 6.7% ) warns of potential contraction while consumer staples firms report customers cutting back on essentials.
   

3. Foreign Capital Outflow: Goldman Sachs reports foreign investors sold $60 billion of U.S. stocks since March, creating valuation pressure given their record 18% ownership of domestic equities.
   

4. Sentiment Stabilizing: Both Citi and InfraCap suggest we’ve reached “peak tariff tantrum,” with today’s calmer trading potentially signaling the worst may be over.
   

Stock Spotlight

Alphabet $GOOGL ( ▲ 1.68% ) gained after beating Q1 expectations. The company flagged the end of the “de minimis” trade exception could create headwinds for its Asia-Pacific ad business.

Intel $INTC ( ▼ 6.7% ) declined on weak Q2 guidance despite Q1 beats. CFO Zinsner warned tariffs would increase costs and said the company is preparing for potential economic contraction.

Tesla $TSLA ( ▲ 9.8% ) climbed, tracking toward its best week since November. The stock rebounded since April 7th after Musk announced he’ll reduce time spent on non-core activities.

T-Mobile $TMUS ( ▼ 11.22% ) dropped after missing Q1 wireless subscriber expectations, reporting 495,000 additions versus 504,000 forecast.

Kenvue $KVUE ( ▲ 1.14% ) rose on reports of activist Dan Loeb’s Third Point taking a stake, adding to existing activist presence with Starboard’s Jeffrey Smith on the board.

Big Name Updates

Meta Platforms $META ( ▲ 2.65% ) gained ahead of next week’s earnings, helped by Reality Labs staff cuts and positive digital ad signals from $GOOGL.

Palantir $PLTR ( ▲ 4.64% ) extended its rally to a 19% weekly gain, pushing its YTD performance above 47%.

Netflix $NFLX ( ▲ 0.43% ) , Take-Two $TTWO ( ▲ 1.21% ), and Verisign $VRSN reached all-time highs, bucking broader market volatility.

PepsiCo $PEP ( ▼ 1.43% ) , Campbell Soup $CPB ( ▼ 1.17% ), UnitedHealth $UNH ( ▼ 1.32% ), and Enphase $ENPH hit new 52-week lows amid sector weakness.

Nvidia $NVDA ( ▲ 4.3% ) advanced with the broader tech sector as AI investments maintained momentum.

Other Notable Company News

AbbVie $ABBV ( ▲ 3.16% ) will invest $10 billion in domestic manufacturing over ten years, including four new plants, responding to tariff concerns.

Colgate-Palmolive $CL ( ▲ 1.31% ) cut guidance, reporting “pensive” consumers reducing purchases of household essentials.

Hasbro $HAS ( ▲ 1.03% ) upgraded to Buy at Citi with a $72 target, citing Wizards of the Coast momentum offsetting potential tariff impacts.

Skechers $SKX ( ▼ 5.35% ) withdrew 2025 guidance despite earnings beats, explicitly citing trade policy uncertainty.

Eastman Chemical $EMN ( ▼ 6.16% ) dropped on weak Q1 revenue and cautious Q2 guidance, pointing to tariff concerns.

Sector Watch

Bond Market

• 10-year Treasury yield settled at 4.269%, declining 0.25 percentage points over the past two weeks

• Persistent yield drop signals growing economic slowdown concerns

• Safe-haven demand remains strong amid ongoing trade and policy uncertainties

• VIX volatility index reached its lowest level since April 2nd, when tariffs were first announced

Policy Watch

• Trump’s Trade Stance:

  • Japan deal “very close” but China tariffs remain firm without “substantial” concessions

  • Dismissed bond market influence on 90-day pause: “bond market was getting the yips, but I wasn’t”

  • Expects to announce “200 deals” in coming weeks

  • Considers 20-50% tariffs a “total victory” for America

• China’s Response:

  • No official trade talks currently underway with U.S.

  • Consulting with U.S. companies about critical supply chain dependencies

  • Politburo planning more monetary easing, including interest rate cuts and lower bank reserve requirements

  • Preparing economic support measures to counter tariff impacts
    
    

What to Watch

1. Tech's Moment of Truth: The big four report next week - $MSFT and $META drop numbers on Wednesday, then $AMZN and $AAPL follow Thursday. Beyond the usual metrics, pay attention to cloud spending trends and how management addresses tariff impacts. These reports could either confirm this recovery or send us back to the drawing board.
   

2. Jobs Report - The First Real Test: Friday brings April employment data - our first clean look at how Trump's tariffs might be hitting hiring. Keep an eye on manufacturing jobs, but also watch retail and transportation for early warning signs. Wage growth needs close monitoring too - if it's heating up while hiring cools, the Fed's inflation fight gets complicated.
   

3. GDP - Setting the Pre-Tariff Baseline: Thursday's Q1 growth reading matters less for the headline number and more for the details. Consumer spending components will tell us if households were already pulling back before tariffs hit. Business investment figures should reveal whether corporate America was battening down hatches ahead of time.

P.S. 

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Thanks for reading 🙂

- John