- Asian Shares Post Cautious Start, Futures Drop: Markets Wrap
Asian shares had a modest start to the week as investors awaited progress in US trade negotiations with the
region and signs of further stimulus from China before taking risky bets. A regional gauge advanced 0.6% while
futures for the S&P 500 declined 0.6%, indicating a four-day US equities rally may be poised to snap. Gold
dropped as much as 1.6% as traders unwound positions on signs the metal’s advance may have run too far and
too fast. Treasuries and the dollar were steady while cryptocurrencies edged down. Amid Asia’s busiest
earnings week this season, investors will also focus on key economic data- the Bank of Japan’s rate decision,
and US jobs report and gross domestic product data – to see if the recent steadiness in markets will continue
as tariff tensions tamp down. Traders are also taking some comfort from hopes that the Federal Reserve may
reduce interest rates earlier than expected. - S&P 500 closes higher for a fourth day in a row, notches 4% gain for the week
The S&P 500 rose 0.74% on Friday (April 25) to close at 5,525.21, extending its weekly gains as investors
assessed global trade developments and rotated back into major tech stocks. The Nasdaq Composite
outperformed, climbing 1.26% to settle at 17,282.94, buoyed by strength in large-cap tech names. The Dow
Jones Industrial Average lagged but still edged up 20 points, or 0.05%, to end at 40,113.50. Among the standout
performers, Alphabet gained over 1% after reporting better-than-expected revenue and earnings for the first
quarter. - Oil edges up despite murky economic outlook, potential OPEC+ supply hike
Oil prices inched up in early trade on Monday but remained dogged by uncertainty over trade talks between
the U.S. and China clouding the outlook for global growth and fuel demand, while the prospect of OPEC+ raising
its supply cast more gloom. Brent crude futures and U.S. West Texas Intermediate crude nudged higher for a
third session, up 9 cents by 0025 GMT to $66.96 and $63.11 a barrel, respectively. “Absence of news is
pushing oil prices modestly higher as traders are positioned short ahead of potential increased OPEC+ supply
from the May 5 meeting and a significant production boost in the USA,” Michael McCarthy, chief executive
officer of online trading platform Moomoo Australia. Some members of the Organization of the Petroleum
Exporting Countries and their allies, known as OPEC+, are expected to suggest that the
group accelerates oil output hikes for a second consecutive month when they meet on May 5. Expectations of
oversupply and concerns about the impact of tariffs on the global economy caused Brent and WTI to fall by
more than 1% last week. The market has been rocked by conflicting signals from U.S. President Donald Trump
and Beijing over what progress was being made to de-escalate a trade war that threatens to sap global growth.
In the latest comment from Washington, U.S. Treasury Secretary Scott Bessent on Sunday did not back Trump’s
assertion that negotiations with China were under way. Earlier, Beijing denied any talks were taking place.
Many participants in the International Monetary Fund and World Bank Spring Meetings said Trump’s
administration was still conflicted in its demands from trading partners hit with his sweeping tariffs. - Gold sinks over 1% as easing US-China tensions curb safe-haven demand
Gold prices dropped more than 1% on Monday as easing U.S.-China trade tensions boosted investors’ risk
appetite and dented demand for safe-haven assets such as bullion, while a stronger dollar also piled on the
pressure. Spot gold was down 1.4% at $3,272.89 an ounce, as of 0220 GMT. Bullion hit a record high of
$3,500.05 on April 22. U.S. gold futures eased 0.4% to $3,283.70. The U.S. dollar rose 0.3% against a basket of
currencies, making bullion more expensive for overseas buyers. “It’s probably fair to say that financial markets
and risk-assets in particular are feeling slightly better about the tariff picture now compared to the frantic first
week in April,” said Tim Waterer, chief market analyst at KCM Trade. “Comments last week from the White
House have fueled optimism that a U.S.-China trade deal may eventuate, which has caused safe haven demand
for assets such as gold to subside.” U.S. President Donald Trump has said talks on tariffs were taking place with
China. The Trump administration signaled openness last week to de-escalating a trade war between the
world’s two largest economies that has raised fears of recession. On Friday, China exempted some U.S. imports
from its steep tariffs, though China quickly knocked down Trump’s assertion that negotiations were underway.
Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low interest rate
environment. Meanwhile, many participants in the International Monetary Fund and World Bank Spring
Meetings said Trump’s administration was still conflicted in its demands from trading partners hit with his
sweeping tariffs. Key data releases this week include the job openings report on Tuesday, U.S. Personal
Consumption Expenditures on Wednesday, and the non-farm payrolls report on Friday. These reports may
provide more insight into the Federal Reserve’s monetary policy outlook. Among other metals, spot
silver dropped 1.2% to $32.70 an ounce, platinum eased 0.6% at $965.70 and palladium lost 1% to $939.00. - Chinese factories are stopping production and looking for new markets as U.S. tariffs bite
Chinese manufacturers are pausing production and turning to new markets as the impact of U.S. tariffs sets in,
according to companies and analysts. The lost orders are also hitting jobs. “I know several factories that have
told half of their employees to go home for a few weeks and stopped most of their production,” said Cameron
Johnson, Shanghai-based senior partner at consulting firm Tidalwave Solutions. He said factories making toys,
sporting goods and low-cost Dollar Store-type goods are the most affected right now. “While not large-scale
yet, it is happening in the key [export] hubs of Yiwu and Dongguan and there is concern that it will grow,”
Johnson said. “There is a hope that tariffs will be lowered so orders can resume, but in the meantime
companies are furloughing employees and idling some production.” Around 10 million to 20 million workers in
China are involved with U.S.-bound export businesses, according to Goldman Sachs estimates. The
official number of workers in China’s cities last year was 473.45 million. - China’s first-quarter industrial profits return to growth amid tariff woes
China’s industrial profits returned to growth in the first quarter, official data showed on Sunday, but are likely
to come under further pressure amid a trade war with the United States. Cumulative profits of China’s
industrial firms rose 0.8% to 1.5 trillion yuan ($205.86 billion) in the first quarter from a year earlier, the
National Bureau of Statistics (NBS) data showed, reversing a 0.3% decline in the first two months. - Trump floats tougher Russia sanctions, meets Zelenskyy for first time since Oval Office blowup
U.S. President Donald Trump on Saturday floated the possibility of stronger sanctions on Moscow and
questioned whether Russian President Vladimir Putin wants to “stop the war” against Ukraine. Trump’s social
media post about Putin came just after he and Ukrainian President Volodymyr Zelenskyy met in Rome for their
first in-person session since an Oval Office sitdown that devolved into a shouting match. They met just before
the funeral of Pope Francis. “There was no reason for Putin to be shooting missiles into civilian areas, cities and
towns, over the last few days,” Trump wrote on Truth Social. Vice President JD Vance posted Trump’s
statement on his X account. “It makes me think that maybe he doesn’t want to stop the war, he’s just tapping
me along, and has to be dealt with differently, through “Banking” or “Secondary Sanctions?” Too many people
are dying!!!” Trump said.The White House said that Trump and Zelenskyy “had a very productive discussion,”
but did not include additional details on what was discussed. Zelensky said that it was a “good meeting,”
adding: “Very symbolic meeting that has potential to become historic, if we achieve joint results.” Trump’s
remarks come as he’s increasing pressure for the two countries to strike a peace deal. Earlier this week, Trump
presented the two countries with an offer to end the war. The deal reportedly included, in part, recognition of
Crimea under Russian control, which Zelenskyy has repeatedly said is a red line. In his Truth Social post on
Saturday, Trump said Russia stole Crimea from Ukraine, a rare acknowledgement from the U.S. president that
Russia illegally annexed the region. Trump took aim at former U.S. President Barack Obama and suggested that
he “made it possible for Russia to steal Crimea from Ukraine without even a shot being fired.” Trump told
TIME earlier this month that “Crimea will stay with Russia,” adding: “Zelenskyy understands that, and
everybody understands that it’s been with them for a long time. It’s been with them long before Trump came
along.” After his comments, Zelenskyy reiterated that Crimea belongs to Ukraine. - Tesla stock surges 9.8%, clinches 18% weekly gain after DoT unveils new self-driving car rules
Tesla (TSLA) stock surged 9.8% on Friday, clinching a weekly gain of 17.9% for the stock as several positive
catalysts pushed the beleaguered name higher. The latest positive headline for the company came late
Thursday, when the Department of Transportation rolled out a new framework for self-driving car regulations,
including “streamlining” some reporting requirements for cars equipped with automated or driver-assist
systems. “This Administration understands that we’re in a race with China to out-innovate, and the stakes
couldn’t be higher,” said Transportation Secretary Sean Duffy. “As part of DOT’s innovation agenda, our new
framework will slash red tape and move us closer to a single national standard that spurs innovation and
prioritizes safety,” Duffy added. The National Highway Traffic Safety Administration (NHTSA) also said in
Thursday’s statement it would expand an existing program exempting some foreign-made autonomous
vehicles from some review processes to accelerate testing to include US-made vehicles. CEO Elon Musk said
on the company’s earnings call this week that Tesla expects to be “selling fully autonomous rides in June in
Austin, as we’ve been saying for now several months. So that’s continued.” Musk added, “The future of the
company is fundamentally based on large-scale autonomous cars and large-scale … numbers of autonomous
humanoid robots. So the value of the company that makes truly useful autonomous humanoid robots and
autonomous useful vehicles at scale at low cost, which is what Tesla is going to do, is staggering.” - Google Parent Alphabet Leads Adtech Stocks Higher on Signs of AI Success
Shares of Google parent Alphabet (GOOGL) climbed Friday, leading shares of several other adtech and AI stocks
higher, after showing signs of success with AI features. Alphabet’s Class A shares jumped over 4% to just above
$166, before paring gains in recent trading. Shares of several other tech companies in digital advertising that
use AI tools also gained, including Meta Platforms (META), Pinterest (PINS), Snap (SNAP), and AppLovin (APP).
The Google parent reported better-than-expected quarterly earnings Thursday, with CEO Sundar Pichai telling
investors Google Search growth was driven by “engagement we’re seeing with features like AI Overviews,
which now has 1.5 billion users per month” in just under a year since its launch. Several analysts, including
those at Citi and Wedbush, boosted their price targets for the stock in the wake of the results, pointing to its
AI potential. Bank of America analysts, who also raised their price target, said they believe Wall Street “may be
underappreciating” opportunities tied to search features like AI Overviews and AI-driven cloud demand. - T-Mobile US Stock Sinks as Firm Posts Slow Phone Subscriber Growth
Shares of T-Mobile US (TMUS) slumped 9% Friday, a day after the cellphone service provider added fewer
wireless customers than expected, and warned that customers would have to pay more if new tariffs raised
phone prices. The company reported that it had 495,000 new postpaid phone customers in the first quarter, a
drop of 37,000 from the year before. Analysts surveyed by Visible Alpha were looking for 499,000. In addition,
the postpaid “churn rate,” a key metric for the industry, rose 5 basis points to 0.91%. Adding to the concerns
for investors were comments by CEO Mike Sievert, who toldYahoo! Finance that T-Mobile is closely watching
the situation with potential tariffs on cellphones, and said that if they happen and are significant, “that’s going
to have to be borne by the customer. I mean, our model isn’t prepared for something like that.” - Aon Plc shares fall as much as 11%, the most intraday in nearly a year, after the insurance brokerage firm
reported adjusted earnings per share for the first quarter that missed the analyst consensus due to slower
than expected organic growth in three out of four units
FIRST QUARTER RESULTS: Adjusted EPS $5.67 vs. $5.66 y/y, estimate $5.99 (Bloomberg Consensus); Revenue
$4.73 billion, +16% y/y, estimate $4.83 billion; Commercial Risk Solutions revenue $2.00 billion, +11% y/y,
estimate $2.06 billion; Reinsurance Solutions revenue $1.19 billion, +1.9% y/y, estimate $1.22 billion; Wealth
Solutions revenue $519 million, +40% y/y, estimate $498.9 million; Health Solutions revenue $1.03 billion,
+40% y/y, estimate $1.01 billion; Adjusted operating margin 38.4% vs. 39.7% y/y, estimate 38.9%; Organic
revenue +5%, estimate +5.74%; Commercial Risk Solutions Organic revenue +5%, estimate +5.66%; Wealth
Solutions organic revenue +8%, estimate +5.01%; Health Solutions Organic revenue +5%, estimate +5.79%;
Reinsurance Solutions Organic revenue +4%, estimate +5.94%; Operating expenses $3.27 billion, +25% y/y,
estimate $3 billion; Compensation and benefits expense $2.25 billion, +19% y/y, estimate $2.27 billion; Cash
and cash equivalents $964 million, -3.1% y/y, estimate $1.02 billion. Adjusted EPS of $5.67, including an
unfavorable impact of 14c/shr if prior year results were translated at current period foreign exchange rates,
compared to $5.66 in the prior year period. “We are reaffirming our 2025 guidance, across all key metrics,
reflecting the resilience and strength of our business and financial model.” “We are driving growth by providing
actionable insights, powered by Aon Business Services, to our clients in an increasingly complex macro
environment.”
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