20 May 2025 - Glenmore Asset Management - Market Commentary

After steep falls in March, global equity markets stabilised in April. In the US, the S&P 500 fell -0.8%, the Nasdaq rose +0.9%, whilst in the UK, the FTSE declined -1.0%. Domestically, the All Ordinaries Accumulation index outperformed its global peers, rising +3.60%. On the ASX, the top performing sectors were consumer discretionary (beneficiary of expected interest rate cuts) and banks. The worst performing sector was energy, which was impacted by a -18% fall in the Brent oil price. Growth stocks recovered strongly in April, as investor risk appetite improved following the tariff driven sell off that was the key driver of weak investor sentiment in February and March.

April was a very volatile month with the ASX falling sharply in the first week before staging a significant recovery as (in our view) investors realised the sell off was excessive, particularly given many Australian companies are not significantly impacted by Donald Trump's tariffs. In addition, it appears many of the tariffs may end up being less harsh than first announced. Pleasingly the fund was able to take advantage of this volatility by adding to many of its existing holdings at very attractive stock prices.

In bond markets, the US 10-year bond yield fell -5 basis points (bp) to 4.16%, whilst its Australian counterpart declined -27 bp to close at 4.11%. The Australian dollar was stronger in April, rising +1.6 cents over the month, closing at US$0.64. The US dollar has been weakening against most major currencies as markets factor in the uncertainty from Donald Trump's tariff policies and their impact on the US economy.