Morning Brew April 24 2025

Good morning,

What a day! Conciliatory tones from Washington caused risk sentiment to flourish and many of the recent sharp moves were reversed to a certain degree. The Dow rose 1.07%, the S&P 500 gained 1.67%, and the Nasdaq surged 2.5%, the Dax closed 3.1% higher as SAP gained 10%.

All Magnificent 7 ended green with Tesla the strongest at +6%. Investors are celebrating the return of Elon Musk to the helm more. The valuation of Tesla remains spectacular, the PE is almost 15 times the industry average calculated on the expected earnings.Nestle published better than expected earnings this morning

The US Dollar rose off the lows withth4e USD Index nearing the 100 again after trading as low as 98, EURUSD is trading at 1.1335 after a high of 1.1575, GBPUSD 1.3266 after 1.3425 and USDJPY 142.77 after 139.90.  The Swiss Franc could give up some of the recent gains to trade at 0.8290 after 0.8040 Gold sold off yesterday while silver rose spectacularly. In the Last 2 days, the XAUXAG ratio rose to 107.30 to fall to 97.70 and is currently 99.75. Oil was trading lower on expected production hikes.

Ole wrote : Blowout top leaves Gold in consolidation mode

• In the commodities market, the spotlight remains firmly on gold, which this week surged to a new all-time high of USD 3,500 before suffering a violent 5% correction.
• The latest market turbulence unfortunately unfolded during the Easter period, when several trading centres were closed, leaving liquidity at a premium.
• From a technical perspective, the blowout top around USD 3,500 and sharp reversal has, in the short term, raised the prospect of consolidation with the first level of support at USD 3,292.
• Also, in this a non-scientific observation on gold and the need to watch activity in Asia, the biggest source of demand throughout the last month.

Jacob commented on the shares of Novo Nordisk, formerly the most valuable company in Europe getting hit by the new obesity drug by Eli Lilly:

• Novo Nordisk shares hit hard by Eli Lilly’s new obesity pill
• Potential U.S. drug tariffs pose additional risk to Novo
• Investors urged to diversify and prioritize convenience-driven treatments

In the current environment, economic data takes the backseat behind news and this is unlikely to change anytime soon. The Trump administration has been forced to alter it`s stance on Key items like the leadership of the Fed and the tariffs against China. Current hot topics are negotiations with Ukraine and the trade talks with Japan, both of which are not going well. DJT also indicated a willingness to exempt some car parts from the overall tariffs.

Team Trump needs good news urgently and it is not clear where they should come from. The IMF published an estimate that the most affected by the US tariffs would be the US itself.

Key topics to watch behind the data and earnings below are :
Ukraine, Tariffs, Iran, India / Kashmir

Intel is expected to announce a significant restructuring and Goolgle earnings and it`s outlook will be closely watched.

Thursday, April 24

- Switzerland: Economic Sentiment Index

- Germany IFO

- US Durable Goods Orders, & Initial Jobless Claims, Existing Home Sales

Earnings: INTC, GOOGL, TMUS, LRCX, PEP

Friday, April 25

- Japan CPI

- UK CBI

- Canada Retail Sales.