PETER’S BUSINESS & FINANCE BRIEFING – Wednesday 23 April 2025, 06:00 Hong Kong
● IMF says its economic projections have been 'jettisoned' ● Modi & Vance optimistic on New Delhi-Washington trade deal ● Bessent said he expects “de-escalation” in US-China tariff war

Wednesday’s Opening Call
Hang Seng (Hong Kong) Projected Open: 21,772 +210 points +1.0%
Nikkei 225 (Japan) Projected Open: 35,300 +1079 points +3.2%
Quick Summary - 4 Things To Know Before Asian Markets Open
The International Monetary Fund (IMF) said at a press conference in Washington D.C. Tuesday that it has "jettisoned our projections" for the world economy after US President Donald Trump's announcement of what he called “reciprocal tariffs” on other countries. In its latest World Economic Outlook, the IMF predicts the global economy will grow by 2.8% this year, down from its previous forecast of 3.3% and trimmed its prediction for 2026 to 3.0%. The fund slashed nearly a percentage point off its growth forecast for the US this year and downgraded its outlooks for all other G7 nations, as well as major economies including China, India, Brazil and South Africa.
US Treasury Secretary Scott Bessent told a closed-door investor summit Tuesday that the tariff standoff with China is “unsustainable” and that he expects the situation to “de-escalate” in the “very near future.” Speaking at a private investor summit in Washington, Bessent said, “no one thinks the current status quo is sustainable” with tariff rates at their current levels. Bessent said he believes that the prospect of de-escalation between the economic superpowers “should give the world, the markets, a sigh of relief.”
The US Commerce Department has announced plans to impose tariffs of up to 3,521% on imports of solar panels from four Southeast Asian countries, meaning import duties are more than 35 times the cost of the product itself. The duties are the culmination of a yearlong trade probe, initiated under former President Joe Biden, that found solar manufacturers in Cambodia, Vietnam, Malaysia and Thailand were unfairly benefiting from government subsidies and selling exports to the US at rates lower than the cost of production. Several major solar equipment producers asked the Biden administration to protect their US operations.
Trade talks between India and the US have made “significant progress” during US Vice President JD Vance’s trip to India. The two sides have finalized the terms of reference for negotiations on “a new and modern trade agreement,” the White House said. “This is very much a win-win partnership,” Vance said in Jaipur on Tuesday. “The future of the 21st century is going to be determined by the strength of the United States and India partnership.” Barring a trade deal, India faces tariffs of up to 26% on its exports to the US under Trump’s April 2 levies, which are currently on a 90-day pause.
IMF Says Its Economic Projections Have Been 'Jettisoned'
The International Monetary Fund (IMF) said at a press conference in Washington D.C. Tuesday that it has "jettisoned our projections" for the world economy after US President Donald Trump's announcement of what he called “reciprocal tariffs” on other countries. In addition, uncertainty around constantly changing policies is leading to investment “pauses” and the “revaluation of credit” by banks, the IMF warned. In its latest World Economic Outlook, the IMF predicts the global economy will grow by 2.8% this year, down from its previous forecast of 3.3% and trimmed its prediction for 2026 to 3.0%. This is a slowdown from 2024’s rate of 3.3%. The fund slashed nearly a percentage point off its growth forecast for the US this year and downgraded its outlooks for all other G7 nations, as well as major economies including China, India, Brazil and South Africa.
IMF chief economist Pierre-Olivier Gourinchas said the global economy is being "severely tested". He noted the global economy "still bears significant scars" from the "severe shocks of the past four years". Uncertainty around trade policy was a "major factor" behind the growth downgrades, Gourinchas said. "Faced with increased uncertainty, many firms' initial reaction will be to pause, reduce investment and cut purchases."
The US is forecast to be hit the hardest among advanced economies because of uncertainty caused by tariffs, the IMF said. Growth is now expected to be 1.8% this year, down from the IMF's estimate of 2.7% for the US in January. Gourinchas said the fund’s central forecast was that the US and global economies would avoid recession this year, after entering 2025 with firm momentum. But the probability of a recession in the US had increased to nearly 40%, Gourinchas said, compared with 25% in its previous World Economic Outlook. The tariffs will also feed through to higher inflation in the US, according to the IMF, with consumer prices set to grow 3% this year, a full percentage point higher than expected.
The IMF also restated the importance of central bank independence, after the president called the Federal Reserve chair Jerome Powell a "total loser" and demanded interest rate cuts. Reiterating the fund’s argument that central bank independence is important to keep inflation in check, Gourinchas said the Fed was right to keep interest rates on hold as it weighs the impact of the levies. He said it's "critical" to make sure inflation expectations "remain anchored", "and everyone remains convinced that central banks will do what's necessary to reduce inflation to the central bank's targets". Their credibility is "critical," he says, and part of that credibility is built on their independence. "From that perspective, it's very important to preserve that," he added.
The IMF’s outlook assumes there will be two Fed rate cuts this year. He added that extra trade barriers represented a supply shock that could “materially” affect goods prices in coming years. “The Fed is sitting at this point and saying, ‘OK, how is this going to play out?’” Gourinchas said. “And waiting and figuring things out seems very appropriate.”
The IMF’s World Economic Outlook also predicts that China will grow by 4% this year, down from the IMF's previous estimate of 4.6%. Its expansive fiscal policy will go some way to easing the impact of tariffs, according to Gourinchas. Growth in India is revised down by 0.3 percentage points this year to 6.2%. In Japan, growth is projected at 0.6%, half a percentage point lower than January’s forecast. Mexico is set to suffer the largest reversal of the big economies for which the IMF provides forecasts and is now expected to see its economy contract by 0.3% in 2025, having previously been on course for an expansion of 1.4%. Canada's economy will grow by 1.4%, a cut from 2%, reflecting tariff uncertainty and "geopolitical tensions". It projects a more modest setback for the eurozone, with growth this year now seen at 0.8%, having been forecast at 1%. Growth in Germany is now expected at zero this year, with an expansion of just 0.9% in 2026. The UK’s growth forecast for 2025 has also been cut to 1.1% from the previous prediction of 1.6%.
US Faces Recession This Year, IIF Says
The US economy is likely to shrink by an annualized 0.8% in the third quarter, and 0.3% in the last three months of 2025, according to a note Monday from the Institute of International Finance (IIF). Growth next year is likely to total just 0.8%. The IIF cited "intensifying policy-driven uncertainty across trade, inflation, and growth." In its report, the IIF team pointed to crumbling consumer sentiment and a March slowdown in US manufacturing, as signs of a weakening economy after some strong data so far this year. IIF economists said the downturn would be self-inflicted, calling it a “a more manufactured deceleration,” rather than resulting from an external shock like the 2008 financial crisis or the 2020 Covid-19 pandemic. The likely slowdown is due to shifting tariff policy and a Trump administration “that is increasingly willing to use trade and migration policy as macroeconomic and geopolitical levers,” the IIF's Marcello Estevão and Jonathan Fortun wrote.
The IIF also said tariffs could help lift inflation, as measured by annual core PCE, toward 4.6% by year-end. The gauge, which is favoured by the Federal Reserve, was running at 2.8% as of February. The Institute predicted the Fed could make three quarter-point interest-rate cuts in the second half, and three more next year. Futures pricing shows a nearly 70% chance the Fed cuts in June.
Trump Says He Has No Intention Of Firing Fed Chief Powell
Shortly after the end of Tuesday’s trading session on Wall Street, Donald Trump said he had no intention of firing Federal Reserve Chairman Jerome Powell despite his frustration with the central bank not moving more quickly to slash interest rates. “Never did,” Trump told reporters on Tuesday. “The press runs away with things. No, I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates.” Trump’s National Economic Council Director Kevin Hassett on Friday told reporters that Trump was studying the question of whether he’s able to fire Powell after a series of presidential social media posts and public comments criticizing the Federal Reserve.
Bessent Expects ‘De-Escalation’ In US-China Trade War
US Treasury Secretary Scott Bessent told a closed-door investor summit Tuesday that the tariff standoff with China is “unsustainable” and that he expects the situation to “de-escalate” in the “very near future.” Speaking at a private investor summit in Washington hosted by JPMorgan Chase on the sidelines of the World Bank meetings this week, Bessent said, “no one thinks the current status quo is sustainable” with tariff rates at their current levels. Bessent said he believes that the prospect of de-escalation between the economic superpowers “should give the world, the markets, a sigh of relief,” according to a person in the room at the private event. “We have an embargo now, on both sides, right?” he said.
Bessent also insisted that, despite the US ratcheting up tariffs on Chinese imports to 145% and China retaliating with 125% duties on American goods, the goal of Trump’s policy “isn’t to decouple.” He noted that negotiating with China is likely to be “a slog.” He didn’t suggest that those negotiations had actually begun. However, two people familiar with his remarks said there were no signs Beijing and Washington were anywhere close to finding a solution and markets were reading too much into his comments. “This is all messaging to hold the markets together while these negotiations are ongoing,” said Steven Blitz, chief US economist at TS Lombard. “Bessent is stating an obvious fact.”
Later Tuesday, White House press secretary Karoline Leavitt said in a briefing, that Trump wants people to know that “we’re doing very well in respect to a potential trade deal with China.” Trump is “setting the stage for a deal with China,” she said, “and the ball is moving in the right direction.” Asked if Trump has spoken directly with Chinese President Xi Jinping, Leavitt said she had nothing to share. But people familiar with the situation in Washington and Beijing stressed there were no talks between the capitals on resolving the dispute. China has made clear to the White House that it views its approach on tariffs as a form of bullying and will not capitulate.
Leavitt said in the same media briefing that there have been no concrete trade deals struck since Trump paused the onset of "reciprocal tariffs" for 90 days. But there are 18 proposals on paper and the US trade negotiation team will be in talks with 34 countries this week, Leavitt said.
US Sets Tariffs Of Up To 3,521% On Southeast Asia Solar Panels
The US Commerce Department has announced plans to impose tariffs of up to 3,521% on imports of solar panels from four Southeast Asian countries, meaning import duties are more than 35 times the cost of the product itself. The duties are the culmination of a yearlong trade probe, initiated under former President Joe Biden, that found solar manufacturers in Cambodia, Vietnam, Malaysia and Thailand were unfairly benefiting from government subsidies and selling exports to the US at rates lower than the cost of production. Several major solar equipment producers asked the Biden administration to protect their US operations. A separate US government agency, the International Trade Commission, is due to reach a final decision on the new tariffs in June.
The countervailing and anti-dumping duties vary between companies and the countries their products are made in. Some solar equipment exporters in Cambodia face the highest duties of 3,521% because of what was seen as a lack of cooperation with the Commerce Department investigation. Products made in Malaysia by Chinese manufacturer Jinko Solar faced some of the lowest duties of just over 41%. Another China-based firm, Trina Solar, faces tariffs of 375% for the products it makes in Thailand.
The levies would be imposed on top of other tariffs already rolled out by the Trump administration. In 2023, America imported almost US$12.9bn in solar equipment from the four countries, according to US Census Bureau figures, representing about 77% of total module imports. Trump has so far imposed taxes of up to 145% on imports from China. Other countries are now facing a blanket US tariff of 10% until July. His administration said last week that when the new tariffs are added on to existing ones, the levies on some Chinese goods could reach 245%.
Modi & Vance Optimistic On New Delhi-Washington Trade Deal
Trade talks between India and the US have made “significant progress” during US Vice President JD Vance’s trip to India. The two sides have finalized the terms of reference for negotiations on “a new and modern trade agreement,” the White House said. Barring a trade deal, India faces tariffs of up to 26% on its exports to the US under Trump’s April 2 levies, which are currently on a 90-day pause. On Monday, US Trade Representative Jamieson Greer said, “there is a serious lack of reciprocity in the trade relationship with India,” putting further pressure on Indian PM Narendra Modi to shield Asia’s third-largest economy from disruptions in global trade by striking an early deal with the Trump administration. Greer added “India’s constructive engagement so far has been welcomed, and I look forward to creating new opportunities for workers, farmers, and entrepreneurs in both countries.”
Vance, who was in India on a mostly personal trip with second lady Usha Vance and his family, met Modi in New Delhi. A statement from Modi’s office said the two leaders “welcomed the significant progress in the negotiations for a mutually beneficial India-US Bilateral Trade Agreement.” They noted “continued efforts” in enhancing cooperation in areas like energy, defence and strategic technologies.
“This is very much a win-win partnership,” Vance said in Jaipur on Tuesday. “The future of the 21st century is going to be determined by the strength of the United States and India partnership.” Vance called for India to lower trade barriers and purchase more American goods, including energy and military equipment, and highlighted the potential of American F-35 warplanes for the Indian Air Force. Vance lavished praise on Modi and pledged that the Trump administration would not treat India with “condescension,” an attitude he said was shown by past US leaders.
Back in February, Modi and Trump had agreed to more than double bilateral trade between New Delhi and Washington to US$500 billion by 2030. US total goods trade with India is estimated at US$129 billion in 2024, according to the Office of the US Trade Representative. India’s surplus with the United States, reached US$45.7 billion last year.
India Slaps 12% Temporary Tariff On Steel Imports
India, the world’s second-largest crude steel producer, has imposed a 12% temporary tariff, known locally as a safeguard duty, on select steel imports to curb a surge in cheap shipments, mainly from China. The tariff, which will be in force for 200 days starting April 21, aims to protect domestic producers from what the government calls unfair competition. India’s Steel Minister H.D. Kumaraswamy said the move will provide “critical relief” to local steelmakers, especially small and medium enterprises, under pressure from rising imports. The Ministry of Finance stated the duty could be amended or revoked earlier if needed.
This marks India’s first major trade policy change since the US imposed sweeping tariffs under President Trump. China, the second-largest steel exporter to India after South Korea in 2024/25, is the main target of the measure. India has been a net importer of finished steel for two consecutive years, with 2024/25 imports hitting a nine-year high of 9.5 million metric tons.
Nomura To Buy Macquarie Asset Management Units
Nomura has agreed to purchase Macquarie’s US and European public asset management business for US$1.8 billion, marking the Japanese brokerage’s most significant overseas acquisition since it bought the Asian and European assets of the then imploding Lehman Brothers in 2008. The deal will add about US$180 billion in client assets to Nomura, increasing its assets under management to around US$770 billion, with over a third managed outside Japan. The acquisition is part of Nomura's strategy to expand in asset management, generate more stable income, and reduce its reliance on volatile trading and investment banking.
Kentaro Okuda, Nomura’s chief executive, has made it his mission since taking over in 2020 to shift the group towards wealth and asset management. Okuda said after the deal the investment management business would derive about 60% of its revenues from outside Japan, compared with about 30% today. “The company will evolve into a global platform,” he added.
CATL Says It Has Overtaken BYD On 5-Minute EV Charging Time
China’s CATL has unveiled upgraded battery cells it claims can offer faster charging for electric vehicles than its rival BYD. The world’s biggest EV battery maker said yesterday that a new version of its flagship Shenxing battery cell could offer a 520 km range from just five minutes of charging time.
Last month, BYD shocked the industry by unveiling a charging system that could add about 470 km in range to its batteries in about the same time. The claims by the Chinese battery groups would put them ahead of major western rivals. At present, Tesla vehicles can be charged up to 320 km in added range in 15 minutes, while Germany’s Mercedes-Benz recently launched its all-electric CLA compact sedan, which can be charged for up to 325 km within 10 minutes using a fast-charging station. Analysts have said the deployment of high-speed charging systems from BYD and CATL will help to eradicate consumer fears about EV driving range, even though there are questions as to how fast the companies can bring these technologies outside China amid rising geopolitical tensions.
Hong Kong Jobless Rate Remains Elevated
Hong Kong’s seasonally adjusted unemployment rate was unchanged at 3.2% in the three months ending March, remaining at the highest level in two years. The number of unemployed persons increased by around 11,100 from the previous month to 122,800, while employment fell by 16,800 to 3.69 million. Sectoral unemployment rose in information technology, social work, business services, and construction, but declined in transportation and insurance. Meanwhile, the youth unemployment rate (for job-seekers aged 20–29) edged up to 6% from 5.6% in the preceding period. The labour force participation rate remained steady for a fifth consecutive period at 56.9%.
Secretary for Labour and Welfare, Chris Sun, said, "the increasingly uncertain external environment due to escalated trade conflicts may weigh on hiring sentiment in some sectors.” He added, "nonetheless, the continued growth of the mainland economy, supported by the central government's boosting policies, alongside the SAR government's various policy measures to continuously promote economic growth and support enterprises, are expected to provide support for labour demand.”
Taiwan Export Orders Growth Below Forecasts
Orders for Taiwanese exports rose 12.5% year-on-year to US$53.0 billion in March, slowing from a 31.1% surge in February and falling short of market expectations of a 15.3% increase. The slower growth was mainly due to a softer rise in export orders for electronic products (21.8% vs 48.6% in February), machinery (2.3% vs 13.4%), electrical machinery (11.1% vs 28.8%), and ICT products (11.4% vs 31.8%). Only transport equipment showed an acceleration in growth (15.4% vs 15.1%). By region, export orders increased from the US (+30.7%), ASEAN countries (+26.3%), and Japan (+21.9%), while declining from Europe (-8.3%) and China including Hong Kong (-5.3%).
US Dollar Assets Tumble Amid Mounting Policy Uncertainty
The US Dollar Index fell to a three-year low Monday and the exit from US assets in general gathered pace after Donald Trump stepped up his criticism of Fed Chairman, Jerome Powell, whom he called “Mr Too Late” and a “loser” for not cutting interest rates. US equities hit their lows of the day after the Trump attacks. The S&P 500’s performance since Inauguration Day is now the worst for any president up to this point in data going back to 1928, according to Bespoke Investment Group. Meanwhile, the Dow is on track for its worst April since 1932.
The selloff in stocks was part of a broad-based flight from dollar-denominated assets as investors reacted to increasingly volatile US policymaking. Counterweights that usually strengthen when stocks fall, such as government bonds and the US dollar, are also under pressure, leaving investors with few havens to wait out the storm. On Tuesday, the dollar index continued to languish near a three-year low. The Japanese yen strengthened above ¥140 per dollar for the first time since September in the rush to haven assets. “It’s the hallmark of the ‘no confidence’ trade,” said Scott Ladner, chief investment officer at Horizon Investments. Societe Generale’s head of asset allocation said the rotation out of American assets will go on for years if Trump persists with his trade policy.
Jens Weidmann, the chairman of Commerzbank and previously the head of Germany's central bank, said last week, “the geopolitical power structure is being reorganized under our eyes.” The “exorbitant privilege of the US,” he said, using a phrase coined in Europe more than half a century ago to describe the dominance of the dollar, “may not be carved in stone.”
Trump’s increasingly personal attacks on Jerome Powell threaten decades of monetary policy as well as the dollar’s status as the world’s reserve currency. Powell, who is due to serve until May next year, has refused to lower US interest rates despite Trump’s provocations. The Fed’s next rate-setting meeting is due to start on May 6. Michael Feroli, chief US economist at JPMorgan Chase, said, “any reduction in the independence of the Fed would add upside risks to an inflation outlook that is already subject to upward pressures from tariffs and somewhat elevated inflation expectations.” Steven Grey, chief investment officer at Grey Value Management, said, “the idea that Powell could be on the way out will definitely put real fear into the market. He’s a voice of sanity, a known quantity.” He added, “Trump is unreliable, he cannot be trusted. What many foreigners are inferring from Trump’s getting elected twice is that America itself cannot be trusted or relied upon to the extent that it has been for many decades.”
Japanese investors offloaded more than US$20bn in international bonds as Trump’s tariffs shook markets early this month. Private institutions, including banks and pension funds, sold US$17.5bn of long-dated foreign bonds in the week to April 4 and another US$3.6bn over the next seven days, according to preliminary data from Japan’s Ministry of Finance. The recent sell-off marks one of the biggest outflows over any two-week period since records began in 2005. Japan holds US$1.1tn in US Treasuries across the public and private sectors, the biggest international stockpile in the world. Its transactions are closely monitored and considered a proxy for buying or selling of US government debt.
Asia-Pacific Markets Little Changed In Subdued Trading
Asia-Pacific markets ended the post-Easter break little changed in quiet trading Tuesday following the selloff on Wall Street the night before. Japan’s Nikkei 225 slipped 0.2% to close at 34,220. South Korea’s Kospi ended the day almost flat. Australia’s S&P/ASX 200 was also unchanged. In Taiwan, the Taiex fell 1.6%. India’s BSE Sensex closed 0.2% higher at 79,596, its highest level since January and extending its winning streak into a sixth day.
Hong Kong Stocks Outperform
On the mainland the CSI 300 was unchanged at 3,784 after Premier Li Qiang said on Friday that measures would be taken to stabilise stock and property markets. “Chinese policymakers will intensify policy-easing measures, including monetary, fiscal, housing and credit policies in the coming months,” Goldman Sachs said in a report on Monday. “The upcoming April Politburo meeting should provide important clues on the top leadership’s thinking.”
Hong Kong shares outperformed the rest of the region on the first day of trading after the Easter break. The Hang Seng Index rose 167 points, or 0.8%, to close at 21,562, after declining as much as 1.0% earlier in the day. The Hang Seng Tech Index rallied 0.2%. Pharma stocks rallied, with CSPC Pharmaceutical (+8.8%), Hansoh Pharmaceutical (+7.2%), and Wuxi Biologics (+5.1%) posting solid gains. However, e-commerce shares such as JD.com (-6.3%) and Meituan (-4.6%) slipped amid growing concerns over margin pressures in the competitive food delivery market. Gold producer Zijin Mining Group rallied 4.7% after bullion prices topped US$3,500 an ounce for the first time.
China’s CATL, the world’s largest supplier of EV batteries, announced a set of new incoming products Monday, including a battery it claims has set a “new global record for superfast charging technology.” CATL said that its second-generation Shenxing battery could add 520 km of driving range from just five minutes of charging time, outperforming EV giant BYD, which last month surprised the industry with a charging system it claimed could add about 400 km in range to its batteries also in about 5 minutes. Shares of CATL rose 1.7% in Shenzhen.
European Stock Markets Higher After Easter Break
Traders in Europe returned after the long weekend Easter break and took stock markets higher after overcoming declines at the start of the session. The pan-European Stoxx 600 index closed 0.3% higher. Household goods rose 1.7%, while the construction sector closed 0.7% lower. London’s FTSE 100 rose 0.6%. It was its seventh consecutive day of gains for the UK’s benchmark index and its biggest winning streak in two years. There were no major earnings or data releases from Europe Tuesday, but traders will be keeping an eye on news and comment out of the IMF-World Bank Spring meetings in Washington this week, where the threat and fallout from Donald Trump’s tariffs regime is likely to dominate discussions.
The health care sector sold off by 0.6%. Novo Nordisk shares plunged after a study showed Eli Lilly’s experimental pill helped patients shed weight and control blood sugar about as well as Novo’s injected blockbuster Ozempic. The stock dropped 7.4% in Copenhagen. The study puts pressure on Novo, whose market value has shrunk by a third since the start of the year as investors worry Eli Lilly will steal market share. Zealand Pharma tumbled 6.6%.
Drugmakers Roche and Regeneron said they will spend billions of dollars to expand US manufacturing, the latest pharmaceutical companies to commit to American production as new and future tariffs loom over medicines made abroad. Roche will invest US$50 billion over five years, including in a new factory to make glucose-monitoring devices and a new plant for weight-loss drugs. The Swiss drugmaker said the investments will create 12,000 construction and other jobs. Shares of Roche fell 0.3% in Switzerland.
Regeneron, which makes drugs for skin and respiratory diseases, is doubling its US manufacturing capacity in a new US$3 billion, 10-year agreement with Fujifilm Diosynth Biotechnologies. Fujifilm’s plant in Holly Springs, N.C., will make bulk drug material for Regeneron medicines. Regeneron shares were down 0.2%.
US Shares Rebound On Hopes For Trade War De-Escalation
US shares rebounded Tuesday after US Treasury Secretary Scott Bessent said he expects “de-escalation” in the US-China tariff fight in the very near future. Stocks, which had opened higher following a sell-off in the previous session, climbed further on Bessent’s comments, though they gave up some gains in afternoon trading. The S&P 500 gained 2.5% and settled at 5,288. The Dow rose 1,017 points, or 2.7%, to close at 39,187. The Nasdaq Composite rose 2.7% to end at 16,300. All three indices fell sharply on Monday on fears the president might fire Federal Reserve chair Jay Powell. The Cboe Volatility Index retreated below 31.
The bounce back came despite fresh fallout from the Trump administration's tariffs. Defence contractor RTX said it was bracing for an US$850 million financial hit, while Huggies maker Kimberly-Clark said a shifting “global geopolitical landscape” was partly to blame for a lower profit outlook.
Solar stocks rose after the US set new duties as high as 3,521% on solar imports from four Southeast Asian countries. First Solar (+10.5%), Sunnova Energy (+26.6%), SolarEdge Technologies (+7.9%), Array Technologies (+2.6%) and Enphase Energy (+3.5%) all jumped higher.
Tesla Profits Fall To 4-Year Low
After the closing bell, Tesla shares rose 3.6% despite reporting disappointing quarterly results as automotive revenue plunged 20%. Tesla missed on the top and bottom lines in its first-quarter earnings report, earning about US$2bn less than analysts had projected. Adjusted net income for the first quarter missed analyst expectations, falling 39% from a year earlier to US$934mn, according to a filing from the Austin, Texas-based company on Tuesday. Reported net income dropped 71% to US$409mn. The results mark the lowest profits Tesla has reported since the fourth quarter of 2020. Earlier this month, Tesla reported that its deliveries fell 13% in the first three months of this year, compared with a year before, marking its worst quarter since 2022. It also lost its crown as the world’s largest electric-vehicle maker to Chinese rival BYD.
Tesla executives also anticipate that US tariffs will impact future earnings, and they are no longer predicting a rebound in its electric vehicle business this year. "Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers," the report notes, adding that "political sentiment" could continue to impact demand for Tesla vehicles. Trump has imposed a 25% tariff on cars and car parts. Tesla's Model Y sources only 70% of its parts from the US.
Treasury Yields Stabilise
US Treasury bonds, which reacted sharply to the latest criticisms from Trump Monday, stabilised in yesterday’s session. “Headlines about Trump’s pressure on the Federal Reserve, questions about its independence and his ability to fire Powell, regardless of the outcome, have added uncertainty to a market already flush with uncertainty,” analysts at RBC noted. The 10-year yield fell 1 bps to 4.40%, while the 30-year yield dropped 3 bps to 4.88%. The policy sensitive two-year yield climbed 5 bps to 3.82%. The Fed has kept rates on hold this year after lowering them three times in a row in 2024, including a large half-point move in September. The central bank’s next meeting is in May.
Dollar Close To 3-Year Low
The dollar rebounded Tuesday but remained close to a three-year low following Donald Trump’s attack on Fed Chairman Jerome Powell. The US Dollar Index rose 0.6% against a basket of major currencies, leaving it down almost 9% this year. The Japanese yen strengthened 0.3% to above ¥140 per dollar for the first time since September 2024 before retreating 0.5% on the day to ¥141.56. The euro hit its strongest level since November 2021 earlier in the session before retreating 0.8% to around $1.14. The British pound climbed to above $1.33 at one stage, its highest level in seven months. The Australian dollar rose above $0.64 on Tuesday, reaching its highest level in over four months. The offshore yuan depreciated 0.3% to around Rmb 7.3150 per dollar on Tuesday.
Gold Hits $3,500 For First Time As Trump Attacks Powell
Gold hit a record $3,500 a troy ounce for the first time as Donald Trump’s sustained attack on US Federal Reserve chair Jay Powell added to fears over the prospects for the world’s largest economy. Gold climbed 2.2% to an intra-day high of $3,500.10, following a 2.9% jump in the previous session before retreating as US stocks rebounded. Bullion ended the day 1.3% lower at $3,380 an ounce.
The precious metal has cemented its position as one of the biggest winners from Trump’s return to the White House. Gold, which some investors rely on as a hedge against inflation, has surged almost 29% this year. Flows into bullion-backed exchange-traded funds and central-bank buying have supported the upswing, with prices gaining every month this year. Investors poured at least US$19bn into gold-backed exchange traded funds during the first quarter, according to Standard Chartered. Lee Liang Le, an analyst at Kallanish Index Services, observed, “gold’s rapid ascent this year tells me that markets have less confidence in the US than ever.” Jefferies analysts say gold may be “the only true safe-haven asset left.”
Earlier in the day John Paulson, the billionaire hedge fund manager and Trump supporter, struck a US$1bn deal alongside Novagold Resources for an Alaska gold project. “The general level of uncertainty, both economically and politically, is driving the price of gold,” Paulson told the Financial Times. “I think this trend will continue, that gold will become the alternative reserve currency,” he added. “And it’s not just among central banks, but also for private individuals, which don’t want to face the risk of confiscation, currency controls or devaluation given inflation.”
Oil Rebounds
Brent crude oil futures rose 1.0% to $67.25 per barrel on Tuesday, after falling over 2% in the previous session. However, the outlook remains bearish as progress in US-Iran talks raises the possibility of a deal that could bring Iranian oil exports back to the market. Investors also remain cautious amid economic headwinds from tariffs and growing uncertainty over US monetary policy, both of which are expected to weigh on the broader economy and potentially reduce oil demand.
Bitcoin Hits Highest Level Of Month
Bitcoin hit its highest level of the month Tuesday, rising above $91,000. It was last trading about 4.5% higher at $91,250. Bitcoin was trading more in line with stocks for much of the month amid tariff-fuelled volatility and uncertainty but has slowly been decoupling. It’s up about 10.5% in April while the S&P 500 is down about 6% in that period.
Peter Lewis’ Money Talk Podcast
On Wednesday’s “Peter Lewis’ Money Talk” podcast, I’ll be joined by David Roche, President & Global Strategist at Quantum Strategy and Professor John Quelch, Executive Vice Chancellor at Duke Kunshan University in Kunshan, China. With a view from Japan is John Beirne, Principal Economist at the Asian Development Bank.
The podcast is also available on Apple Podcasts, YouTube Studio and Spotify.
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This podcast is sponsored by Surfin Group, which is headquartered in Singapore and offers online financial services to 60 million customers across 10 countries. You can find out more about them by going to their website www.surfin.sg