Weekly Fundamental Analysis Forecast – April 21, 2025
Gold has soared to a fresh high over the impact of the trade war between the U.S. and China. Speaking at an event in Washington, China’s ambassador called on the U.S. to find common ground, even as he warned that Beijing is prepared to retaliate further in the escalating trade war. He cautioned that the sweeping tariffs threaten to devastate the global economy, as trade between the world’s two largest economies has ground nearly to a halt under dueling levies exceeding 100%. While countries like Japan and South Korea are moving to negotiate carve-outs from President Trump’s “Liberation Day” tariffs, there is no high-level dialogue currently planned between Washington and Beijing. Even though Trump has said that the U.S. is having “good conversations” with China behind closed doors – though no public progress has been confirmed, markets are likely to stay nervous unless concrete measures are announced.
The earnings season kicks into high gear next week, with a lineup of major players set to report – and all eyes on tech and trade-sensitive names. Two of the Magnificent Seven will take center stage: Tesla unveils its latest results Tuesday, followed by Alphabet on Thursday, both poised to offer key insights into the health of the tech sector. Intel will also be closely watched, as investors look for clues on its CEO’s roadmap to revive the struggling chipmaker. Meanwhile, Boeing’s earnings could reveal how rising trade tensions are weighing on the aerospace giant’s outlook. Given the outsized influence of these companies on major indices – particularly the S&P 500 and Nasdaq – and their weight in global trade, any surprises could ripple across markets and fuel recent volatility.
Crude prices are poised to stabilize, buoyed by fresh U.S. sanctions on Chinese firms trading Iranian oil. The move adds to mounting pressure on Tehran and raises the prospect of tighter global supply, especially as the Trump administration intensifies efforts to curb Iran’s nuclear ambitions. Both sides have agreed to reconvene this week following a second round of negotiations in Rome. But while diplomacy remains on the table, rising military threats and conflicting signals cloud the outlook. Trump continues to press Tehran with a stark ultimatum: strike a deal or face the possibility of war. Meanwhile, he has reportedly rejected an Israeli proposal to launch strikes on Iranian nuclear facilities as early as next month, signaling a preference, for now, to give diplomacy more time.
China maintained its loan prime rates at 3.1% and 5-year at 3.6% to stabilize the yuan amid U.S. trade tensions. This follows strong economic data, with Q1 GDP growing 5.4% year-on-year. March retail sales and industrial output also exceeded expectations.
Asia-Pacific markets were mixed in today’s early trading. Japan’s Nikkei 225 fell 1.33%. South Korea’s Kospi dipped 0.16%. Australia and Hong Kong markets were closed due to holiday.
Markets reacted to Trump’s trade policies and Fed criticism. After Trump called for rate cuts and Powell’s removal, U.S. futures declined.
