Today's Update 04-24-2025
Key Points and Metrics
Key Points and Metrics:
U.S. Economic Data Releases:
Initial Jobless Claims:
Actual: 222,000
Forecast: 222,000
Previous: 215,000 (Revised to 216,000)
Continued Jobless Claims:
Actual: 1.841 million
Forecast: 1.8685 million
Previous: 1.885 million (Revised to 1.841 million)
Durable Goods Orders (March Preliminary):
Actual: 9.2%
Forecast: 2%
Previous: 1.0% (Revised to 0.9%)
Core Durable Goods Orders:
Actual: 0.0%
Forecast: 0.3%
Previous: 0.7%
Chicago National Activity Index:
Actual: -0.03
Forecast: 0.12
Previous: 0.18
Existing Home Sales:
Actual: 4.02 million
Forecast: 4.13 million
Previous: 4.26 million (Revised to 4.27 million)
Existing Home Sales Change:
Actual: -5.9%
Forecast: -3.05%
Previous: 4.2%
Federal Reserve Communications:
Fed's Hammack:
Emphasized the need for patience in monetary policy.
Indicated it's too soon to consider a rate move in May.
Noted uncertainty is weighing on business investment.
Fed's Waller:
Stated that the impact of tariffs will become clearer in the second half of the year.
Mentioned potential for increased layoffs and higher unemployment due to tariffs.
European Central Bank (ECB) Insights:
ECB's Lane:
Expressed that uncertainty might lead to varying policy decisions.
Indicated no precommitment to any specific rate path.
Suggested that a 25 basis point move is not always the default.
ECB's Rehn:
Commented on the materialization of economic risks.
Mentioned few arguments exist to pause rate cuts.
U.S.-China Trade Relations:
The U.S. is considering exceptions for some Chinese auto parts.
China's Stance:
Foreign Ministry stated that there are no ongoing talks with the U.S. on tariffs.
Emphasized readiness to engage in a tariff war if necessary.
Commerce Ministry declared that reports on trade negotiations are unfounded.
International Monetary Fund (IMF) Projections:
Cut Asia's economic growth forecast to:
2025: Approximately 3.9%
2026: Approximately 4%
IMF Managing Director Georgieva:
Highlighted the high cost of uncertainty from trade issues.
Urged major economies, including the U.S. and China, to address imbalances.
Corporate Earnings Reports:
American Airlines (AAL):
Q1 2025 Results:
Adjusted Loss Per Share: $0.59
Revenue: $12.6 billion (Slightly above estimates)
Outlook: Forecasts Q2 adjusted EPS between $0.50 and $1.00
Procter & Gamble (PG):
Q3 2025 Results:
Core EPS: $1.54
Net Sales: $19.78 billion (Below estimates)
Adjusted Sales Guidance: Lowered due to volatile market conditions
Merck (MRK):
Q1 2025 Results:
Adjusted EPS: $2.22 (Beat estimates)
Sales: $15.53 billion (Above estimates)
Noted a decline in Gardasil sales due to reduced demand from China
Adjusted full-year earnings guidance
Market Movements and Investor Sentiment:
U.S. stock futures fluctuated amid tempered optimism about U.S.-China trade progress.
Investors showed increased demand for safe-haven assets such as the Swiss franc, Japanese yen, and gold.
Global stocks struggled to maintain momentum due to mixed signals on trade policies.
Other Notable Developments:
IMF Comments on Asian Economies:
Suggested that many Asian central banks have room to ease monetary policy.
Emphasized the importance of currency flexibility as a buffer against shocks.
Germany's Economic Outlook:
Government forecasts:
Inflation decreasing to 2% in 2025 and 1.9% in 2026.
Economic growth stagnation in 2025, with a projection of 1% growth in 2026.
Oil Market:
WTI Crude Oil prices strengthened amid ongoing geopolitical factors.
Summary of Key Metrics:
Economic Indicators:
Initial Jobless Claims: 222,000
Continued Jobless Claims: 1.841 million
Durable Goods Orders Growth: 9.2%
Core Durable Goods Orders Growth: 0.0%
Chicago National Activity Index: -0.03
Existing Home Sales: 4.02 million units
Existing Home Sales Change: -5.9% month-over-month
Corporate Earnings Highlights:
American Airlines (AAL): Adjusted Loss Per Share: $0.59; Revenue: $12.6 billion
Procter & Gamble (PG): Core EPS: $1.54; Net Sales: $19.78 billion
Merck (MRK): Adjusted EPS: $2.22; Sales: $15.53 billion
IMF Economic Growth Forecasts for Asia:
2025: 3.9%
2026: 4.0%
Market Impact:
US stock futures fluctuating after back-to-back gains on Wall Street
Dollar weakened as unpredictable White House policy moves boost demand for safe havens
Swiss franc, yen, and gold seeing increased demand as relative safe havens
Deutsche Bank slashed S&P 500 year-end target by 12% to 6,150 points
IBM shares down 8% in premarket after disappointing earnings
Treasury yields advancing amid uncertainty
Fed Commentary:
Fed's Waller: "The easiest place to offset tariff costs is by cutting payrolls"
Fed's Waller: "We could see prices going up as layoffs start to happen"
Fed's Hammack: "The Fed needs to be patient, it's too soon to consider a move in May"
Fed's Hammack: "Fed could move in June if the data is clear about economy's state"
International Relations:
Trump signaled US will have a "fair deal" with China, possible new tariff rate in 2-3 weeks
Treasury Secretary Bessent: Full trade deal could take 2-3 years
Japan reportedly resisting Trump efforts to form trade bloc against China
Reports indicate Trump administration nearing trade agreement in principle with India
Corporate News:
Procter & Gamble lowered sales guidance citing "volatile" market conditions
Merck sees $200M in added costs from tariffs announced to date
American Airlines reported Q1 loss of 59 cents per share (adjusted)
CME Group to expand crypto derivatives with XRP futures launch
Final Thoughts:
The markets are navigating significant uncertainty as US-China trade tensions remain at the forefront. Fed officials are increasingly concerned about the economic impact of tariffs, particularly on employment and inflation. While President Trump has signaled some flexibility on China tariffs, his administration continues to send mixed messages, creating market volatility. The housing market shows weakness with existing home sales falling sharply, while the surprising jump in durable goods orders was driven by transportation equipment, masking flat core orders. European economic forecasts are deteriorating, with Germany now expecting stagnation this year. Investors should prepare for continued volatility as trade policy developments unfold and corporate earnings reveal the early impacts of tariff concerns on business planning and investment.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.
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Harry