Monthly Macro Review - April 2025

Macro at a glance

The Liberal Party, led by current Canadian Prime Minister Mark Carney, has won the Canadian general election with 168 leading districts out of 343 compared to 153 before. These results show that the Liberal Party will not have enough seats to win a majority against the Conservative Party of Canada. Just a few months ago, the way seemed clear for the Canadian Conservatives, led by Pierre Poilievre to return to power, after ten years of Justin Trudeau's rule. They still went from 120 to 144 leading districts. Mark Carney has promised to maintain tariffs on American products as long as Washington's measures are in place. But he has also promised to develop trade within his country by lifting customs barriers between provinces, and to seek out new markets, particularly in Europe. (Le Monde, FT)

April 2, known as Liberation Day, marks a turning point in the American economy, and more broadly, in the global economy. The introduction of Trump's tax plan had far-reaching consequences despite being suspended immediately. Due to higher return on long term bonds, Trump had to reverse his decision. Let's start at the beginning: the 47th President of the United States aims to implement protectionism, a policy that opposes the free trade highly valued by economists. The goal is to protect American jobs, reduce the trade deficit, and encourage investment in the US economy. As soon as the "reciprocal tariffs" were announced, the world responded, some countries more than others. A notable example is China, a few days after the announcement, a surprising escalation occurred between the two global giants: what initially seemed like fair taxation quickly turned into a disaster. On April 9, Trump responded to China's retaliatory tariffs by imposing a 104% tax on all Chinese goods, in response to that China imposed an 84% tariff on all American goods. Just a few hours later, the tariffs escalated further, with China imposing a 125% tariff on US goods and the US imposing a 145% tariff on Chinese goods. These tensions resulted in a 60% decline in freight shipments between China and the US. This will lead to shortages and price increases on store shelves, according to Walmart (WMT) and Target (TGT). Ultimately, the question remains: was Trump's tariff plan just a negotiating tactic with the rest of the world? Only time will tell. These tensions have been met with skepticism by financial markets. It's been just over 100 days since Donald Trump took office - a period that feels much longer due to his numerous interventions. The S&P 500 has experienced its worst performance in the first 100 days of a presidential term since Gerald Ford, with an 8% decline. Due to the trade war, the dollar is falling and consumer anxiety is getting higher and higher. (FT, BBC, CNN)

One Sector, One Insight

Basic Materials and Energy :

Activist fund Elliott Management has been investing heavily in the energy sector since the beginning of the year. On 9 April, it announced that it had acquired a $2.5 billion stake in Phillips 66 (PSX), demanding the demerger of its midstream and chemicals businesses and the appointment of seven new directors. For its part, BP (BP) is facing a similar offensive: with 5% of the capital, Elliott is demanding a refocusing on oil and gas, cost reductions and a cash flow of 20 billion dollars by 2027, compared with 14 billion today. Elliott's objective is clear: less diversification, more profitability. (FT, Wall Street Journal)

Consumption and General Public Services:

Swiss chocolate giant Barry Callebaut (BARN) has had a complicated first half to the 2024-2025 financial year. Despite a sharp rise in sales (+63% in local currencies to 7.29 billion CHF), Barry Callebaut saw its net profit fall by 60% to 30.5 million CHF. The cause: soaring cocoa prices, up 95% on the previous year, and a sharp increase in working capital requirements. To preserve its cash position, the Group raised 2 billion  CHF through a bond issue. (Le Temps, Le Figaro)

Financial Services : 

On 28 April, Mediobanca (MDBI) announced its intention to launch a €6.3 billion public exchange offer to acquire Banca Generali (BGN), the asset management subsidiary 50.2% owned by Generali (GASI). The deal, financed by the sale of Mediobanca's 13% stake in Generali, aims to strengthen Mediobanca's position in asset management, while reducing its exposure to the insurer. The deal comes against a backdrop of growing tension between Mediobanca and its dissident shareholders, Francesco Gaetano Caltagirone and Delfin (the Del Vecchio family holding company), who are challenging current governance and seeking to increase their influence over Generali, including by supporting a hostile takeover bid for Mediobanca by Monte dei Paschi di Siena (BMPS), of which they are also major shareholders. (FT, Refinitv)

Healthcare :

UnitedHealth Group (UNH) announced disappointing quarterly results of $109.6 billion, below its forecasts of $111.6 billion. It also revised its forecasts for 2025 downwards. This is due to higher-than-expected medical costs, particularly in the Medicare Advantage business. As a result, the share price fell by 17%, dragging the sector down with it. (ZoneBourse, Wall Street Journal)

Industrials:

April 25th, Toyota's (7203) chairman Akio Toyoda proposed a ¥6 trillion ($42 billion) deal to take private Toyota Industries (6201), its largest subsidiary. This move aims to simplify Toyota's complex shareholding’s structure and strengthen the founding family's control over the world’s largest carmaker. Toyota Industries, which manufactures industrial equipment and vehicles, currently has a market capitalization of ¥4.3 trillion. If completed, this deal would not only reshape Toyota’s structure but also signal a broader shift in Japan’s corporate landscape. (FT)

Technology and Network Equipments :

On April 28th, Google (GOOG) faced a landmark antitrust trial. The U.S. Department of Justice pushed for drastic structural remedies against the potential illegal monopoly in both search and advertising technologies. Prosecutors argue that Google’s agreements with device manufacturers have stopped innovation and blocked competition from emerging AI-driven platforms such as perplexity AI and OpenAI. The trial highlights how Google's $1.9 trillion valuation is reinforced by annual payments to partners like Apple, Mozilla, and Verizon to remain the default search engine across devices. This trial could challenge Google’s role as the default gateway to online information. (FT)

The stock of the month

Strategy Incorporated (MSTR) surged 31,3% in April, driven by its role as a key proxy for Bitcoin exposure. As the largest corporate holder of Bitcoin, the company attracts speculative interest and tracks crypto market sentiment more than its underlying business fundamentals. (FT)

Key performances

Name	As of April 30	Monthly change	YTD
S&P500	5569.06	-0.21%	-5.31%
Dow Jones	40669.36	-3.17%	-4.06%
NASDAQ	17446.34	0.85%	-9.51%
FTSE100	8494.85	-1.02%	2.84%
CAC40	7593.87	-2.53%	2.71%
DAX	22496.98	1.5%	12.35%
SMI20	12116.98	-3.82%	4.24%
MSCI WORLD	3652.76	0.34%	-1.63%
VIX	24.70	14.09%	42.36%
CHF/USD	1.2093	6.52%	9.23%
CHF/EUR	1.0674	1.65%	0.34%
Brent $/bbl	61.18	-16.91%	-17.76%
Gold Spot $/oz	3301.00	6.94%	26.65%

Upcoming events

May 7: Fed interest rate decision and FOMC economic projections

May 13: US CPI 

May 21: NVIDIA results (a fall in results could be disastrous for the entire sector on the stock market)