Weekly Market Insights - 22 April
Get updated on the key happenings last week in 3 minutes.
Summary
Chips Export Restrictions Shake Tech: New U.S. licensing requirements for chip exports to China led to significant losses in tech stocks, exposing vulnerabilities in global supply chains.
Fed Maintains Cautious Stance: The Federal Reserve held its current interest rate range steady, signaling inflation concerns tied to tariffs while Treasury yields reflected ongoing recession fears.
Geopolitical Tensions and Market Rotations: Trade disputes and global conflicts spurred gains in defensive sectors like utilities and real estate, while tech stocks experienced notable declines.
Growth Picks Performance
Total Returns
Growth Picks - 145% vs S&P 500 - 59%
Compiled Annual Growth Rate
Growth Picks - 17% vs S&P 500 - 9.2%
27 out of 37 picks generating positive returns
21 out of 37 picks outperforming S&P 500Tech Sector Hit by Export Curbs
Last week, U.S. equities faced heightened volatility, with the S&P 500 falling 1.4% and the Nasdaq shedding 2.2% as semiconductor export restrictions took center stage. The U.S. government’s decision to require indefinite licensing for high-performance chips, such as Nvidia's H20 AI processors, sent shockwaves through the tech sector. Nvidia reported a $5.5 billion write-down due to these restrictions, causing its stock to plunge 7% midweek. Advanced Micro Devices (AMD) also suffered, facing an $800 million charge for its MI308 GPUs.
Federal Reserve Holds Rates Steady
The Federal Reserve kept its benchmark interest rate unchanged at 4.25%-4.50%, while signaling concerns about potential inflationary pressures stemming from tariffs. Fed Chair Jerome Powell acknowledged that tariffs are “highly likely” to cause at least temporary inflation but left the door open for longer-lasting effects.
Treasury yields reflected this cautious stance, with the 10-year yield slipping to 4.32% and the 2-year yield dropping to 3.80%, as fears of an economic slowdown loomed. Inflation data offered some relief, with March’s headline Consumer Price Index (CPI) rising 2.4% year-over-year, a notable decline from February’s 2.8%. This marks the smallest annual increase since March 2021.
Geopolitical Developments and Global Market Reactions
Geopolitical tensions added to the economic uncertainty this week. China retaliated against U.S. tariffs by halting deliveries of Boeing aircraft and suspending parcel shipments to the U.S. via Hong Kong. Beijing dismissed U.S. complaints about trade dynamics, arguing that the U.S. has benefited disproportionately from global trade.
In global markets, European stocks faced pressure on Wednesday, weighed down by concerns about ASML's tariff exposure and a worsening outlook for corporate earnings. In contrast, Japan’s Nikkei index gained ground after the U.S. announced plans for new trade discussions.
Sign up now and get our free REITs’ Numerical Ratings.
Disclaimer: This article constitutes the author’s personal views and is for entertainment and educational purposes only. It is not to be construed as financial advice in any form. Please do your own research and seek advice from a qualified financial advisor. From time to time, I have positions in all or some of the mentioned stocks when publishing this article. This is a disclosure - not a recommendation to buy or sell stocks.