March 31, 2025 Market Outlook: A Positive Outlook
Looking back at last week’s events, the ASX 200 managed to steer clear of the turmoil in the US markets, which suffered downturns for the fifth time in six weeks. The index wrapped up the trading week with a 0.16% increase, resulting in a 0.64% rise for the week – marking the second consecutive week of positive gains for the ASX.
While some may view this as a positive development, the sector performance for the week indicated a trend toward defensive stocks. Utilities led the way with a 1.8% increase, while the information technology sector experienced the most significant decline, dropping by 2.4%. Defensive sectors like consumer staples, energy, basic materials, and financials finished the week on a high note. Conversely, consumer discretionary, industrials, and healthcare, in addition to technology, witnessed price decreases. The price of gold reached another all-time high.
On the flip side, the situation in the US took a nosedive following the announcement of a 25% tariff on imported cars, triggering a market plunge towards the end of the week. Disappointing inflation data and a decrease in consumer sentiment further added to the downward spiral, with anticipated inflation levels not seen since March 1993. The Dow Jones closed the week with a 0.96% decline and dropped by 1.69% on the last trading day. The S&P 500 and Nasdaq also experienced declines of 1.53% and 2.9%, respectively.
Looking ahead to this week, interest rate decisions in Australia, along with various PMIs (Purchasing Manager Indexes) from both Australia and the US, are expected to have significant impacts on market movements. However, the most crucial news to watch out for is on April 2nd, termed as “Liberation Day” by the US president, as reciprocal tariffs are scheduled to commence. While the market response initially seemed muted due to hints of “flexibility” in the president’s comments, it’s essential to note that the announced automobile tariffs were included in this so-called “flexibility.”
Upcoming economic data releases to monitor include the Chicago Purchasing Manager Index and Dallas Fed Manufacturing Business Index on Monday, Australian retail sales data and interest rate decision on Tuesday, followed by employment data and factory orders for February in the US on Wednesday. Thursday will see the release of initial and continuing jobless claims data in the US, along with PMIs and new orders for the services sector. Finally, on Friday, comprehensive unemployment data will be unveiled, including non-farm payrolls, labor force participation rates, and the US unemployment rate.
As for IPOs, the market is witnessing a decrease in activity, with only Marimaca Copper Group expected to list on April 2nd with an issuer price of $6.00. Stormeur Group, a cosmetic and laser clinic provider, remains scheduled to list on June 3rd, while Siguiri Gold’s listing remains unspecified.
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