Issue link: https://info.seic.com/i/1537680
Executive Summary • April 2 nd marked President Trump's so-called "Liberation Day"; delivering one of the most sweeping tariff packages that the U.S. has implemented in decades. A 10% baseline tariff was placed on all imports into the U.S., along with reciprocal tariffs against more than 180 countries. The result was a selloff that knocked more than $9tn in market capitalisation for global equities in the next two days. Despite the initial shock, markets recovered by month- end, returning close to starting levels. • European and U.K. equities continued to outperform U.S. stocks during the month with optimism around increased German defence spending, a potential resolution to Russia- Ukraine conflict, and reduced exposure to geopolitical tensions such as U.S. trade policy. • The U.K.'s latest economic growth and inflation readings showed relative strength amidst tariff uncertainty. U.K. GDP came in higher than expected, increasing 0.5% in February, while CPI inflation slowed to 2.6% in March. Economic Factors Interest Rates • The ECB reduced interest rates by 25 basis points in April. Focus remains on the upcoming BOE and Federal Reserve policy meetings in May, as investors watch for potential rate cuts later this year amid ongoing economic uncertainty and global trade tensions. Inflation • The U.S. and Eurozone showed inflation readings that were flat month over month, though Eurozone data came in higher than expected. Tariffs continue to cause inflationary concern. Economic Growth • Tariff disruptions caused Q1 U.S. GDP predictions to contract for the first time since 2022. However, Eurozone economic growth doubled to 0.4% from 0.2% in the previous three months. Tactical Views Commodities • Commodities were volatile during the month, with concerns over global trade disruptions and their economic impact leading to worries about weaker demand for raw materials. U.S. Large Cap Equities • The Magnificent Seven companies reported mixed Q1'25 results, with several indicating uncertainty around their outlook. AI investments drove growth for certain companies, while external factors such as tariffs and consumer spending created headwinds for others. Pessimistic Optimistic Pessimistic Optimistic SEI Monthly Update April 2025 Pessimistic Optimistic Pessimistic Optimistic Pessimistic Optimistic For use by advisers of regulated intermediaries in the UK in acceptance with all applicable laws and regulations Legend SEI's Current View: Direction of movement from previous: