April rebound ahead? 31/01/2025

HOT stories for today

US market wrap:
 

• U.S. equities ended the final full week of March in the red, dragged down by stubborn inflation and rising concerns about consumer resilience—fueled further by a weak batch of economic data on Friday. The Dow Jones Industrial Average (DJIA) dropped around 716 points, or 1.7%, after falling as much as 767 points at session lows. The S&P 500 (SPX) slipped 1.7%, while the Nasdaq Composite (COMP) sank 2.7%, erasing earlier weekly gains across all three major indexes. All remain on track for losses in both March and the broader first quarter.
• Friday’s market drop followed the release of February’s personal consumption expenditure (PCE) data, which included the Federal Reserve’s preferred inflation metric. The core PCE price index, which excludes food and energy, rose 0.4%—above expectations—and lifted the year-over-year rate to 2.8% from 2.7%, reinforcing concerns that inflation remains firmly above the Fed’s 2% target. Adding to market jitters, tariff-related headlines also weighed on sentiment. President Trump’s newly announced auto tariffs earlier in the week, coupled with fears of more reciprocal levies expected on April 2, have stoked anxiety over potential stagflation and deepened uncertainty around U.S. trade policy.

April ebound ahead?

• U.S. equities are on track for their weakest monthly performance since 2022, with March losses driven by sticky inflation, trade policy uncertainty, and cautious Fed messaging. Despite early-year strength, the rally has faltered under the weight of renewed economic concerns. The S&P 500 is down nearly 2%, while the Nasdaq is pacing for a monthly loss of more than 3%, marking a notable shift from the strong gains seen earlier in 2024.
• However, some analysts see the pullback as a potential setup for new opportunities. Historical data shows April tends to be one of the strongest months for stocks, with seasonal strength and earnings optimism often driving gains. If inflation shows signs of cooling and trade rhetoric settles, bulls could regain control heading into the second quarter. Still, with volatility rising and uncertainty lingering, traders are keeping a close eye on macro trends and upcoming corporate earnings before diving back in.

Stocks on the move: 
      

• Lululemon (LULU) — Shares of the athletic apparel brand dropped over 14% after the company released 2025 guidance that came in below analyst expectations
• Oxford Industries (OXM) — The clothing retailer slipped more than 3% after issuing full-year guidance that fell short of Wall Street forecasts
• Bausch + Lomb (BLCO) — The eye health company declined 5% after announcing a voluntary recall of certain implantable lenses due to reported complications
• AppLovin (APP) — The mobile tech firm rebounded 7% on Friday, recovering part of Thursday’s sharp 20% drop
• Braze (BRZE) — The cloud-based software provider rose 6% after posting stronger-than-expected fourth-quarter results on both revenue and earnings

Today’s action

• Markets across the Asia-Pacific region declined sharply on Monday as investors braced for a new wave of U.S. tariffs expected later this week from President Donald Trump. Japan’s Nikkei 225 dropped 3.86%, after sinking more than 4% at one point. Meanwhile, China’s CSI 300 slipped 0.99% and Hong Kong’s Hang Seng Index declined 1.46%. China’s official NBS Manufacturing PMI for March came in at 50.5, matching economists’ forecasts and slightly above February’s 50.2 reading, indicating modest expansion in factory activity.
• U.S. stock futures were under pressure early Monday as traders awaited policy clarity ahead of what Trump has dubbed “Liberation Day” on Wednesday. The administration is set to implement a new round of levies, including a 25% tariff on all non-U.S.-made vehicles, alongside expected announcements on reciprocal tariffs. Dow futures fell 145 points, or 0.35%, while S&P 500 and Nasdaq 100 futures retreated 0.64% and 1.18%, respectively.Investors are also eyeing a packed economic calendar this week, with the March U.S. jobs report—set for release Friday, April 4 at 8:30 a.m. ET—taking center stage.

Watchlist: LULU, APP, TSLA, BABA, NVDA, MSFT, COIN, PLTR

Bitcoin

• Bitcoin (BTC) hovered around $81,678 on Sunday evening, staging a slight rebound from its intraday low of $81,551. Despite the minor recovery, BTC has dropped 4.27% over the past week, extending a broader downturn in the crypto market. Ethereum (ETH) fared worse with a 9.7% weekly loss, while XRP plunged over 12%, reflecting a tough week for digital assets. Trading volume remained light on Sunday, down 17% from the previous day, as market momentum cooled.
• The steady decline across major tokens has sparked significant volatility in derivatives markets, triggering $192.64 million in liquidations over the past 24 hours. Long positions in bitcoin and ethereum accounted for $44.08 million and $45.09 million of that total, respectively, highlighting continued pressure on bullish traders.
  Watchlist: Bitcoin: 78 000-100 000, Ethereum:1900-2600, Solana: 100-176
   

Forex

• EUR/USD remained firm for a third consecutive session on Monday, recovering from an early dip near 1.0800 as the U.S. dollar softened across the board. Last Friday’s hotter-than-expected PCE inflation data has stoked stagflation fears, keeping pressure on the greenback. Still, the pair’s advance lacked strong momentum and hovered around 1.0835 as investors eye upcoming German CPI data and escalating trade tensions.
• Meanwhile, the Japanese Yen (JPY) extended its rebound from last week’s lows, buoyed by safe-haven demand and rising expectations of further tightening from the Bank of Japan. Though the USD/JPY pair trimmed losses and bounced around 40-45 pips off its intraday low, global recession concerns and uncertainty surrounding President Trump’s planned reciprocal tariffs continue to drive risk-off flows into the yen.
  Watchlist: EUR/USD: 1.0700-1.0950, USD/JPY: 148-151
   

Basic Materials

• Gold (XAU/USD) rallied for the third straight session on Monday, surging past the $3,100 level to notch a new all-time high. Ongoing concerns over President Trump’s impending reciprocal tariffs and their potential drag on global growth continue to fuel safe-haven demand. A weaker U.S. dollar and rising geopolitical risks are also supporting the non-yielding metal, though overbought technicals may slow further upside in the near term.
• Meanwhile, West Texas Intermediate (WTI) crude oil eased slightly after climbing into the mid-$69 range during the Asian session. Prices hovered near $68.80, little changed on the day. Uncertainty around the economic fallout from upcoming U.S. tariffs is capping bullish momentum, though geopolitical tensions and a softer dollar are helping to keep oil supported near multi-week highs.
  Watchlist: GOLD 2600-3100, US Oil: 65.00-79.00
   

Key Economic Events Today:

EST time

09:45 am: USD Chicago PMI

Earnings

BMO (Before the US Market opens)
LOAR          Loar Holdings
AMC (After the US Market closes): PVH, PRGS, VENU

The TEFS Analyst team wishes you a successful day!