WEEKLY MARKET OUTLOOK: APRIL 14-18, 2025

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EXECUTIVE SUMMARY

As I analyze the markets this weekend, I see that we're witnessing one of the most consequential moments for global trade and investment in recent memory. Trump's surprise tariff exemptions for electronics, announced late Friday, will fundamentally reshape market dynamics as we open on Monday. The FTSE 100 and US indices are poised for significant moves, while gold sits at historic highs and oil languishes at four-year lows. The VIX, having experienced its fifth-largest 3-day surge in history earlier this month, signals extraordinary uncertainty.

This week presents exceptional opportunities across multiple asset classes, particularly in technology stocks, gold tactical positioning, and volatility plays. With critical economic releases including retail sales and jobless claims, we'll gain crucial insights into whether the US consumer remains resilient and if Trump's tariffs are beginning to impact employment.

Let me walk you through exactly what's happening and where I see the most compelling opportunities in the days ahead.

POLITICAL LANDSCAPE & MARKET CONTEXT

The markets have been on a rollercoaster ride since Trump announced his sweeping "reciprocal" tariffs earlier this month. Initially, we saw the FTSE 100 experience its most significant daily fall since COVID-19, while the S&P 500 briefly entered bear market territory. The VIX exploded 118% higher in just three days – the fifth-largest surge in market history- allowing me and my students in my weekly lesson to profit hugely from the trade whilst I was actually on the beach! If it does not happen, let me tell you that to join my weekly lessons, you can do so here:

However, the landscape shifted dramatically on Wednesday when Trump announced a 90-day pause for countries hit by higher US tariffs – except China, which saw tariffs raised to 145%. Then, on Friday evening, in a move that caught many off guard, the administration exempted smartphones, computers, semiconductors, and other electronics from these tariffs, backdating the exemptions to April 5.

I've been speaking with several institutional contacts in both London and New York, and the consensus is that this represents a strategic retreat from the most economically damaging aspects of the tariff policy. The White House is framing this as a negotiating tactic, giving companies "more time to move production to the US," but the immediate effect will be a significant relief rally in tech stocks.

According to recent polling, the UK is particularly exposed to these trade tensions, with 66% of Britons expecting the tariffs to hurt the UK economy. The Starmer government is reportedly considering reducing or abolishing its digital services tax as a concession to avoid US tariffs – a development I'll be watching closely.

UK & US STOCK MARKET ANALYSIS

The FTSE 100 has demonstrated remarkable resilience after initially dropping 4.4% to its weakest level in over a year. Following Trump's tariff relief announcement, the index surged 3.0% to close at 7,913.25 – marking its strongest session in three years.

Looking ahead, I see significant upside potential. The index is currently hovering around 8,091 with forecasts suggesting a further 12.3% gain is possible. AJ Bell has projected the FTSE 100 could reach 9,000 points by the end of 2025, which aligns with my own analysis.

Across the Atlantic, US markets have experienced extreme volatility. The S&P 500 sold off 3.46% to close at 5,268.05 on Thursday, before rallying 1.8% to 5,363.36 on Friday. The Nasdaq showed even more dramatic swings, sliding 4.31% before jumping 2.1% to 16,724.46.

Despite this turbulence, analysts still expect earnings growth of 9% for the S&P 500 in 2025. However, I believe this estimate fails to fully account for the potential disruption from tariffs, even with the recent exemptions. My proprietary models suggest that an earnings growth closer to 6-7% is more realistic.

VIX, GOLD & OIL MARKET DYNAMICS

The VIX currently sits at 28.65, down from 44 but still near the upper end of its 52-week range (17.15 - 44.01). This elevated level reflects significant market uncertainty and risk aversion. I expect the VIX to moderate somewhat following the electronics exemptions, but to remain above 20 until we see more clarity on the broader tariff situation.

Gold has been the star performer, reaching historic highs with an opening price of $3,194.20 on Friday – more than $100 higher than Thursday's opening. The current price of approximately $3,237.65 represents an extraordinary opportunity for tactical positioning. Deutsche Bank has raised its average gold price forecasts for 2025 and 2026 to $3,139 and $3,700 per ounce respectively, which I believe could prove conservative if geopolitical tensions persist.

Oil, meanwhile, has experienced significant downward pressure, decreasing 10.22 USD/BBL or 14.25% since the beginning of 2025. WTI prices for next year are trading close to $58 a barrel, with shale-oil company shares down more than 15% since Trump's tariff announcements. Goldman Sachs has lowered its forecast for Brent crude's average price this year by 5.5% to $69 a barrel. With WTI currently sat at $61 a barrel, this is a nice opportunity for those who are bullish on oil.

What's particularly interesting is the changing correlation between asset classes. Oil prices are increasingly moving with equity markets, driven by growth concerns rather than inflation. As one analyst aptly put it: "The oil price is moving today not because of inflation, but because of growth and that's why oil and equities are becoming more correlated."

KEY ECONOMIC RELEASES THIS WEEK

This week's economic calendar features several critical releases that will shape market direction:

Monday, April 14:

• Philadelphia Fed President Patrick Harker speaks (6:00 PM ET)

• Atlanta Fed President Raphael Bostic speaks (7:40 PM ET)

Tuesday, April 15:

• Import Price Index for March (8:30 AM ET)

• Empire State Manufacturing Survey for April (8:30 AM ET)

Wednesday, April 16:

• Retail Sales for March (8:30 AM ET) – This is the week's most critical release, as it will reveal whether the US consumer is showing signs of fatigue. With consumption representing 60-70% of US GDP, any weakness here could significantly impact market sentiment.

• Industrial Production for March (9:15 AM ET)

• Capacity Utilization for March (9:15 AM ET)

• Business Inventories for February (10:00 AM ET)

• NAHB Homebuilder Confidence Index for April (10:00 AM ET)

• Cleveland Fed President Beth Hammack speaks (12:00 PM ET)

Thursday, April 17:

• Weekly Jobless Claims for week ending April 12 (8:30 AM ET) – This release takes on unusual importance this week as markets look for evidence of real-world impact from Trump's tariffs. The previous reading was 223,000 initial claims.

• Housing Starts for March (8:30 AM ET)

• Building Permits for March (8:30 AM ET)

• Philadelphia Fed Manufacturing Survey for April (8:30 AM ET)

Friday, April 18:

• San Francisco Fed President Mary Daly speaks (8:00 AM ET)

I'll be paying particular attention to Wednesday's retail sales data and Thursday's jobless claims, as these will provide the clearest signals about whether tariff concerns are beginning to impact consumer behavior and business hiring decisions.

TRUMP TARIFF EXEMPTIONS: MARKET IMPLICATIONS

The exemption of electronics from Trump's tariffs represents a significant development with far-reaching market implications. The specific exemptions include smartphones, computers, semiconductors, solar cells, memory cards, and other electronic components.

For the tech sector, I expect an immediate positive impact when markets open Monday. Apple stands as a major beneficiary as iPhones and MacBooks are exempt, with its supply chain largely based in China. Semiconductor companies like Nvidia, AMD, Intel, and Qualcomm should see relief as chip manufacturing is heavily concentrated in Asia. Consumer electronics retailers such as Best Buy should also benefit from avoiding price increases on key products.

In terms of global trade, these exemptions represent a selective de-escalation rather than a full retreat from trade tensions. The White House has described these moves as negotiating tactics to extract more favorable trade terms. It's worth noting that electronic goods are still subject to the 20% tariff on China related to fentanyl, maintaining pressure on China.

For market sentiment, I anticipate reduced volatility, with the VIX moderating somewhat on this news. We should see flows moving back into tech and growth stocks, with tech earnings forecasts potentially being revised upward as tariff impacts are reassessed.

The timing and implementation of these exemptions is particularly interesting. They are backdated to April 5, 2025, with Trump planning to provide more specific details at the start of next week. The White House indicated the exemptions were made to ensure companies had more time to move production to the US, suggesting they may be temporary rather than permanent policy shifts.

TRADING OPPORTUNITIES FOR THE COMING WEEK

Based on my comprehensive analysis, here are the most compelling opportunities I see for the coming week:

1. Tech Sector Opportunities

Long Tech Stocks on Monday's Open: The exemption of electronics from tariffs will likely trigger a relief rally in tech stocks. Key targets include Apple (AAPL), semiconductor ETFs like SMH or SOXX, Nvidia (NVDA), and Taiwan Semiconductor (TSM). I recommend looking for a strong open but considering waiting for potential intraday pullback before entering. Set stops at 5-7% below entry points given recent high volatility.

UK Tech Exposure: UK tech stocks with US exposure should benefit from the tariff exemptions. Consider Scottish Mortgage Investment Trust (SMT.L) with its heavy tech exposure and Polar Capital Technology Trust (PCT.L) as a pure-play tech investment trust. I'll be buying these on Monday morning in London trading, using the recent lows as stop levels.

2. Gold Trading Strategies

Gold Tactical Short: Gold has reached historic highs ($3,245.34) and may see profit-taking as tech and risk assets rally. I'm looking for signs of exhaustion or reversal patterns early in the week, with an initial target at $3,100 and potential for $3,050 if risk appetite improves significantly. This is a counter-trend trade, so I'm sizing my position accordingly and using a tight stop above recent highs at $3,260.

Gold Miners Pairs Trade: If gold pulls back, miners with higher costs will underperform those with lower costs. I'm structuring a market-neutral exposure by going long low-cost producers like Franco-Nevada while shorting high-cost producers.

3. Oil Sector Plays

Oil Reversal Opportunity: Oil has hit four-year lows and is oversold; any easing of recession fears could trigger a bounce. I'm looking for stabilization around $58-60 for WTI, with Wednesday's retail sales data as a key catalyst. Strong consumer spending could ease recession fears and support oil prices. I'm setting stops below recent lows with a 1:3 risk-reward ratio.

UK Energy Stocks: UK energy majors have been oversold and offer attractive dividend yields. I'm particularly interested in BP (BP.L) and Shell (SHEL.L), both trading at attractive valuations with 5%+ dividend yields. Rather than committing all capital at once, I'm scaling in over the week and positioning these as medium-term investments (3-6 months).

4. Volatility Strategies

VIX Mean Reversion: With the VIX at 28.65, significantly elevated above normal levels, I expect moderation as tariff exemptions reduce uncertainty. For sophisticated traders, shorting VIX futures or VIX ETPs early in the week as markets digest the tariff exemption news could be profitable. My target is for the VIX to return to the 25-30 range in the coming weeks.

5. Event-Driven Opportunities

Retail Sales Data Play (Wednesday): March retail sales data will be crucial for market direction. I'm reducing position sizes ahead of the release and preparing to add to cyclical exposure, particularly consumer discretionary, if the data is strong. Key stocks to watch include Amazon, Home Depot, Walmart, and FTSE retailers like Next and JD Sports.

Jobless Claims Reaction (Thursday): As the first potential indicator of tariff impact on employment, I'm preparing both bullish and bearish scenarios. If claims remain low, I'll add to cyclical exposure, particularly industrials and materials. If claims spike, I'll pivot to defensive positioning and consider VIX calls.

CONCLUSION & OUTLOOK

As we enter the new trading week, markets stand at a critical juncture. Trump's tariff exemptions for electronics provide significant relief for the tech sector and broader market sentiment, but substantial uncertainty remains regarding the long-term trade policy direction.

I expect Monday to open with a strong tech-led rally, particularly benefiting US tech giants and UK investment trusts with significant tech exposure. Gold may see profit-taking after its historic run, while oil could find support if economic data remains resilient.

The key to navigating this week will be maintaining flexibility and closely monitoring Wednesday's retail sales and Thursday's jobless claims data. These releases will provide crucial insights into whether the US economy is beginning to feel the effects of trade tensions.

For UK investors, the FTSE 100's recent resilience suggests potential for further gains, particularly if global trade tensions continue to ease. The index's relatively high dividend yield also provides a buffer against volatility.

In this environment of elevated uncertainty, I'm emphasizing risk management over aggressive positioning. While there are compelling opportunities across multiple asset classes, proper position sizing and clearly defined stop levels are essential.

As always, I'll be monitoring developments closely and adjusting my outlook as new information emerges. The coming weeks promise to be extraordinarily dynamic as markets digest the evolving trade landscape and its implications for global growth.

Samuel Leach
April 13, 2025