The infoshot to help kick-start your week
Nvidia takes more hits, and Trump continues his attacks on Fed Chair
On Wednesday, the Nasdaq fell 3.1% following the news that Nvidia will require licences to export its popular H20 AI chip to China. US officials advised the firm that the licence requirement will “be in effect for the indefinite future.” Nvidia shares tumbled nearly 7% on the day and have fallen further over the Easter weekend.
Trump continued his attacks against the Federal Reserve Chair, Jerome Powell. Last week, he criticised Powell for being “always too late and wrong” and expressed his desire for him to be removed from his role.
Last night, in his attempts to put more pressure on Powell to lower interest rates, Trump took to Truth Social to call Powell “a major loser” for not doing so already. A rate cut by the Fed may help appease the stock markets following the losses imposed by Trump’s tariffs. However, the response so far to Trump’s attacks has seen US markets fall further and bond yields rise as investors worry about the ramifications of Trump’s fight with the Fed over its monetary policy and independence. The Fed meets again in a couple of weeks’ time and is widely expected to hold interest rates in the current 4.25% to 4.50% range.
Amidst the backdrop of Trump’s tariffs, his attacks on the Fed and another week full of problematic political news, including the fallout from Abrego Garcia’s erroneous deportation to El Salvador’s controversial CECOT prison and Defence Secretary Pete Hegseth’s second Signal group-chat scandal, the dollar is now down 9% in 2025 in its worst start to a year ever. The price of gold continues to break records on the back of all the turmoil and now sits at just under $3,500 an ounce, nearly 15% up on where it was this time last month.
UK inflation falls increasing pressure on BoE to cut rates
Here in the UK, inflation fell for the second month in a row. The consumer price index rose by just 2.6% in the 12 months to March putting pressure on the Bank of England (BoE) to cut interest rates when they next meet on 8 May 2025. After publishing the latest inflation figures on Wednesday, the Office for National Statistics (ONS) said falling fuel prices and the slowing increases in the cost of a night out have helped reduce inflation. A host of household bills, including water, energy and council tax went up at the start of April. This combined with US policy is heavily denting the prospects of another month of falling UK inflation.
The ONS also released its latest data on the UK job market. Unemployment remains unchanged from January at 4.4%. Wages (excluding bonuses) are continuing to grow at nearly 6% a year – a modest 3% rise when adjusted for inflation. However, vacancies are still falling steadily and have now slipped below pre-pandemic levels, making this data release a rather mixed bag.
In the markets, the FTSE 100 rose 4% ahead of the Easter break. Share prices in food retailers rose by over 10% week on week, as they bounce back from the plunge caused by speculation a month ago that they would be forced to fund price cuts to compete with Asda.
Coming Up:
- S&P Global Manufacturing PMI, Wednesday 23 April 2025 at 10:00am
- US New Home Sales, Wednesday 23 April 2025 at 10:00am
- US Existing Home Sales, Thursday 24 April 2025 at 10:00am
Notice:
For regulated financial advisers and investment professionals only, Copia does not provide financial advice, and the contents of this document should not be taken as such. The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated but is not an indicator of potential maximum loss for other periods or in the future.
