WeeklyWatch – Global markets struggle to find direction

23^rd April 2025

Stock Take

There was a lot of volatility across the markets last week. The culprits: further escalations in trade tensions, central bank policy moves and renewed concern for investors as they look at the global economy.

Increased pressure for US markets

Political tensions seeped into monetary policy discussions, which caused US equities to struggle. Federal Reserve Chair Jerome Powell faced more public criticism from President Trump who called him a “major loser” as he continued to pressure him into making more cuts to interest rates to give the economy an immediate boost and offset the impact of tariffs on Chinese goods.

On his Truth Social platform, Trump described Powell as “Mr Too Late” in responding to the risks that the US economy currently faces. This also gave rise to new speculation over the Fed’s independence. The President can’t dismiss the Fed Chair, but Trump’s strong language has certainly added to investors’ unease.

Over the week, the S&P 500 fell by 1.5%, the Dow Jones Industrial Average was down 2.7% and the Nasdaq Composite lost 2.6%. Many other sectors also finished the week lower, with healthcare one of the hardest-hit areas. There was a 22% single-day fall for UnitedHealth Group following disappointing earnings – the group’s worst performance since 1998.

Adding to the bad news, the US dollar weakened to a three-year low against major currencies. Investors sought safety, leading to gold prices hitting a record $3,450 per ounce.

And to round it off, economic data revealed that while retail sales remained steadfast, inflation data continued to stay high – this leaves the Fed in a challenging place before its next meeting.

Europe paves its own way

The European Central Bank (ECB) decided to cut their deposit rate by 0.25% to 2.25% after concerns regarding economic growth. As inflation moderated, the policymakers made the decisive move to keep momentum up in the eurozone economy.

ECB President Christine Lagarde revealed next to nothing about the bank’s next plan, only insisting that policymakers would make choices meeting-by-meeting. Some of Lagarde’s colleagues spoke out, saying that the bar for future cuts is low. The new rate cuts provided a much-needed boost, and European markets recovered some ground – the Euro Stoxx 50 finished the week 3.09% higher, overcoming a three-week losing streak.

While Europe celebrated positive market reaction, caution lingers. Despite the upswing, growth remains fragile and vulnerable to further external risks, such as weaker demand from China – this could deepen slowdown, causing investors to keep a close eye on the situation.

Mixed market signals from Asia

Reports released from China fractionally beat expectations as they showed first-quarter GDP growth of 5.4% year-on-year, with March data revealing that retail sales and industrial output were strong. But the MSCI China Index dropped by 1.8% over the course of the week; this, coupled with continued concerns around US–China trade tensions, fuelled investor worry further.

Heading east, Japan’s Nikkei 225 reported modest gains, celebrating its best week in three months. Investors also became more hopeful that Trump will broker trade deals with some of the region’s top trading partners, which includes Japan.

The world looks ahead

Market behaviour and developments across the week reflect the forces that are shaping current markets: geopolitical uncertainty, inflation pressures and changes in monetary policy. Investors will be monitoring US–China trade negotiations carefully.

Central banks are predicted to be a key focus during this time. Europe has opted for action to support growth while the Federal Reserve tries to balance matters under increased political pressure.

During these times, it’s important to remember the core principles of investing. Chief Investment Officer at St. James’s Place, Justin Onuekwusi, says:

“Emotional decisions can lead to poor investment outcomes. Investors typically have long-term plans to meet their overall goals. Sticking to those plans in periods of volatility is incredibly important.”

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

Wealth Check 

Building your business takes time and hard work, but there comes a time when you may step back and consider selling and realising the value that you’ve created. But sadly, for many businesses that go to market, a successful exit isn’t achieved.

Chief Revenue Officer at Elephants Child, Crawfurd Walker, has worked to assist many businesses get ready for sale. Here, he shares his top advice on how owners can best prepare.

When preparing a company for sale, it’s essential to maximise value, ensure a smooth transition and minimise risks. If you don’t fully prepare, you could find significant gaps between your expectations and a buyer’s perspective on fair markets prices, and could run the risk of losing buyers.

Preparing a business for sale can take years and depends on several factors so it’s important to work with a team of financial advisers who will help you prepare and guide you through the sales process.

The importance of the preparation process:

1. Business valuation maximised

Potential buyers will pay close attention to financials. By preparing your business properly you have time to improve profitability, sort out inefficiencies and boost value.

Once you’ve resolved outstanding debts and clarified asset ownership, your business will be more attractive as potential financial risks will have been taken away.

2. Attracting potential buyers

Make sure that your business documents are well-organised, processes are clear and your branding is strong. Buyers also seek certainty, so by having your business well-prepared, you present fewer risks and are far more likely to attract serious buyers, who’ll also be willing to pay a premium.

3. Do your due diligence

Unresolved issues or missing information can disrupt or even collapse sales. By having the correct documents, records and contracts ready, you can help avoid delays. Additionally, having well-organised records shows transparency, making it easier for buyers to build confidence in your company, plus you’ll increase the likelihood of a smooth and successful transition.

4. Smooth business continuity during transition

By having guides on operations, customer relationships and staff relationships, you’ll enable a smooth handover to the new company owners. As well as preparing your business, you must also take time to prepare your key employees, making sure that they remain motivated; retaining essential staff preserves important business knowledge and value.

5. Make the most of tax and legal strategies

Reduce your tax liability by structuring the sale strategically so you can minimise tax consequences and maximise financial outcomes. By preparing for this well in advance, you allow yourself time to seek out expert advice to help you along the way.

Furthermore, making sure that you’re addressing all legal compliance criteria (legal and regulatory issues) will reduce the risk of issues arising during the sale.

6. Getting the most out of your personal and business goals

Clarifying your personal objectives during your preparation will help you understand exactly what you want from the sale of your business – from financial security to preserving company legacy or a combination of goals.

Achieving the legacy that you want for your business long after its sale is all down to your preparation, which will ensure that it continues under the new ownership.

Are you considering selling your business?

Making sure your business is well-prepared for sale is a way of investing in its future value. By seeking out the right financial advice, you can boost your chances of a sale, achieve a higher price, get a better deal structure and make the transition as smooth as possible, in order to protect your interests and those of the business.

More opportunities with financial advice

By enlisting the help of a financial adviser, you can access the kind of personalised support that will prepare your business for an exit that’s smooth and successful. Get in touch with Wellesley today to get started on your business transition journey.

St. James’s Place works in conjunction with an extensive network of external growth advisers and SME specialists, such as Elephants Child, who have been carefully selected. The services provided by these specialists are separate and distinct from those carried out by St. James’s Place and include advice on how to grow and prepare your business for sale. Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.

The information contained is correct as at the date of the article. The information contained does not constitute investment advice and is not intended to state, indicate or imply that current or past results are indicative of future results or expectations. Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.

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Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.

SJP Approved 22/04/2025