Trading update : 17 April 2025

You get an exemption, you get an exemption, will other sectors get an exemption? President Trump’s pullback on sector-specific tariffs helped tech and automaker stocks mount a rally, but industry probes are the latest policy shift to rattle markets. Knowing what the Trump administration does next is anyone’s guess.

Trump talks exemptions

President Trump is exploring possible exemptions to his 25% US levies on imported vehicles and parts to give auto companies more time to set up US manufacturing. Carmaker stocks rallied on the news. In related news, Reuters reported that Tesla (TSLA-NSAQ) halted plans to ship parts for its Cybercab and Semi vehicles from China.

Probing questions

President Trump’s administration is pressing forward with plans to initiate trade probes into semiconductors, pharmaceuticals and critical minerals. Led by the Commerce Department, the moves are a precursor to imposing tariffs and threaten to broaden the president’s sweeping US trade war. Bloomberg reported that the Commerce Department has started investigating the impact on US national security of “imports of semiconductors and semiconductor manufacturing equipment” and “pharmaceuticals and pharmaceutical ingredients, including finished drug products”, and launched a probe into the need for tariffs on critical minerals. Separately, the WSJ reported he plans to use trade negotiations to pressure partners to limit their dealings with China.

China health check

China’s economy grew 5.4% in the first quarter from a year earlier, exceeding estimates. Bloomberg reports that industrial production and retail sales data for March also topped expectations, showing unexpected momentum. China’s home price decline also eased further in March on the back of support policies. Declining house prices are a positive sign for Chinese officials trying to end the housing slump that has weighed on Asia’s largest economy for years. China’s stimulus plans also aim to unleash the potential of service consumption to provide support for economic development, according to a statement from the Ministry of Commerce. However, the data reflects economic activity before massive US levies on Chinese goods kicked in.

UK consumers keep calm and carry on

Despite the global economic turmoil, UK households increased their spending in March, despite an imminent rise in household bills. A Bloomberg article highlighted signs of underlying strengthening in demand and resilient confidence in discretionary spending. Insights from Barclays also suggest most Brits now plan to buy local products following the sharp rise in US tariffs, which should help boost the domestic economy.

Luxury warning

Sales from LVMH Moët Hennessy Louis Vuitton fell more than expected in the first quarter, weighed down by weak demand for luxury goods in China and the US and the threat of a trade war. Bloomberg reported that organic revenue at the French luxury group’s fashion and leather goods division, its largest unit, dropped 5%. The US, which accounted for 24% of LVMH’s sales in the quarter, fell by 3%. The region that includes China fared worse, with sales sliding 11%, more than double estimates. Only Europe showed growth. All units saw declining sales except watches and jewellery, which were flat. Wines and spirits posted the biggest decline, 9%.

Volatility lifts investment banks

Bank of America Corp. (BAC-NASQ) and Citigroup Inc. (C-NASQ) reported strong revenues that beat estimates as traders reaped the benefits of volatile markets. Bank stocks as a whole provided some support, with the SPDR S&P Bank ETF (KBE-NASQ) rising more than 1%. 

US warehousing sector boom

For investors looking for a strong investment theme, US importers are looking for logistics space in customs-bonded warehouses to delay paying tariffs on merchandise. They can store goods for up to five years in these facilities without paying duties. Bloomberg reports that the surge in demand has driven up prices, with custom bonded space now costing as much as 60% more than typical warehouse space, and warehouse owners and operators are seeking certification from the federal government to meet the demand.

Investors buying the dip

According to a Bloomberg article, retail investors are buying into the market despite the turmoil, seeing the downturn as an opportunity to buy equities on the cheap. Many retail investors under 40 have only experienced bull markets in their adult lives, leading them to believe that downturns are short-lived and will rebound quickly. Despite warnings from Wall Street heavyweights, some retail investors are sticking to their strategy of buying the dip.

Anglo, Peabody work to close deal

According to a statement, Anglo American (AALL-TRQX) is working with Peabody Energy Corp. to satisfy the remaining conditions in its agreements required to sell its steel-making coal business. Anglo is also making progress with the temporary suspension of mining operations at the Moranbah North mine following a “minor ignition” in the underground area of the mine on March 31.

FirstRand eyes African growth

Bloomberg reported that a unit of FirstRand (FSR-JSE) plans to set up private banking services in Ghana and expand its offerings in four other markets to tap into Africa’s growing wealthy population.

Sector focus: Steel

The world’s steel industry is undergoing a major structural shift as new dynamics — from the retreat of globalisation to pro-climate policies — change the sector’s demand outlook, according to the top analyst at China’s biggest steelmaker. Bloomberg reports that China’s steel industry, the world’s largest, is facing significant pressure as consumption of the material falls due to a maturing economy and a property sector in crisis. Even as demand drops, the industry is still producing too much steel, pumping out over 1 billion tons last year and prompting the government to call for output cuts. However, despite surpassing its peak, the analyst says China’s steel demand will remain substantial drawing according to research that shows steel usage in developed countries never follows a linear decline.