Multi-Asset Weekly: Markets Rally on US Tariffs Delay
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Chief Investment Office28 Apr 2025
  • Equities: Worries over US Federal Reserve’s independence waned
  • Credit: We believe a 2–3Y and 7–10Y IG credit duration barbell approach offers resilience
  • FX: Slight détente in US-China trade relations have allowed the USD to stage a corrective rebound
  • Rates: Clear labour market weakness is needed to justify early Fed easing
  • The Week Ahead: Keep a lookout for US Change in Nonfarm Payrolls; Japan Industrial Production
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Equities: Markets rallied on delay of reciprocal tariffs by the US

Equity markets rallied strongly on delay of reciprocal tariffs. Positive sentiment from the delay of reciprocal tariffs by the US benefitted global markets. US stock markets rose, boosted by reduced concerns over the US Federal Reserve’s independence and solid earnings. The Dow Jones, S&P 500, and NASDAQ gained 4.6%, 6.7%, and 2.8% respectively for the week. In Europe, the STOXX 600 and FTSE 100 climbed 2.8% and 1.7%, benefitting from the positive sentiment generated by the tariff pause. The Japanese yen weakened slightly; the Japanese government announced measures to support the economy. The Nikkei 225 gained 2.8%. China markets also rose despite escalated tariffs imposed by the US as the China government pledged to introduce measures to support the economy. The SHCOMP advanced 0.6% and the Hang Seng Index climbed 2.7%, respectively for the week.

Topic in focus: Global Beverages – Navigating costs and tariff volatility. The 25% tariff on US aluminum imports is set to significantly impact beverage companies, particularly brewers, who rely more heavily on aluminum cans (c.40% packaging mix vs c.25% for soft drinks). US aluminum premiums have doubled, driving a 14% increase in can costs. While soft drink companies like Coca-Cola are shifting toward polyethylene terephthalate (PET) packaging to offset costs, brewers have limited alternatives due to taste and transport concerns. Companies with heavier US exposure are likely to face greater pressure.

Broader macro uncertainty is also rising. President Trump’s tariff reversals, particularly on Asian economies, have heightened global market volatility. Despite a 90-day tariff pause for some, a blanket 10% tariff remains, and China faces a sharp 125% levy after retaliation. US consumer confidence has already fallen to a four-year low amid inflation and recession fears with Asia’s economic outlook clouded by investment and hiring caution. Overall, we prefer beverage companies with strong execution capabilities, flexible packaging strategies, and diversified geographic exposure, particularly those more weighted to Latin America and Europe over the US and Asia.


Figure 1: Effective aluminum prices (USD per mt) have soared in the US relative to Europe and Asia due to the newly implemented tariff policy

Source: Refinitiv, DBS; note: Effective pricing is derived from adding the LME aluminum price and duty paid premium in Mid-West US



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