Market Analysis – April 14, 2025

Looking back at the previous week, financial analysts and market experts are describing it as one of the most tumultuous in trading history, marked by extreme volatility and roller-coaster movements. The US and ASX 200 markets were still dealing with the aftermath of the 2 April announcement regarding reciprocal tariffs when another major event rocked the financial world. Initially, the ASX 200 experienced a slight drop, followed by sideways trading until a significant announcement changed the course of markets globally.

When the bond market began showing signs of distress, with reduced bond sales and rising yields, it became evident that the situation was serious. Typically, in times of stock market turbulence, investors turn to bonds for stability. However, this time even bonds were seen as a risky asset. The subsequent decision by the US to delay the implementation of the recently announced tariffs for 90 days due to the bond market crisis led to a remarkable rally in the Dow Jones Industrial Average by 2,962 points. In response, the ASX 200 also surged by 9.5%.

Despite the initial market rally, which some experts believe might have been a short-lived rebound, both the US and ASX 200 markets returned to a downward trajectory. By the end of the week, the ASX 200 recorded a 0.28% decline, while US markets managed to close in positive territory. Amidst the market turmoil, gold and gold miners emerged as key beneficiaries as investors sought refuge in the precious metal, dubbing it the ultimate safe haven in the current economic climate.

Looking ahead, the market outlook remains uncertain as investors may have misinterpreted the headlines regarding the tariffs. While the US and China are seemingly embroiled in a trade war with the implementation of the 10% baseline tariffs, negotiations are ongoing with over 70 countries to find mutually agreeable trade policies within the next ninety days. The unpredictability of US trade policy has created a sense of unease in the markets, with the likelihood of extended volatility for the foreseeable future.

In the coming week, key economic data releases include import/export data from China, RBA Meeting Minutes in Australia, Retail Sales and Industrial Production Data in the US, and Employment Data from both Australia and the US. The economic calendar is relatively light due to the shortened trading week, with markets in Australia and the US closed for Good Friday at the end of the week.

In the IPO market, activity remains subdued with only two upcoming listings scheduled. WAM Income Maximiser Limited and Stormeur Group are set to debut in the near future, reflecting the cautious sentiment in the current market environment. Before making any investment decisions, investors are advised to conduct thorough research and consider all available information to make informed choices in the volatile market conditions.