Equity Market Update – April 2025

We would like to provide you with an update on recent market developments that may have an impact on your investments.

Market update as of April 2025

Australian Market

Inflation

Inflation has continued its downward path, with the annual trimmed mean inflation rate decreasing to 2.7% in February 2025, aligning with the Reserve Bank of Australia’s (RBA) target range of 2–3%. This decline indicates a moderation in inflationary pressures.

Interest Rates

In April 2025, the Reserve Bank of Australia (RBA) decided to maintain the cash rate at 4.1%. This decision reflects a cautious approach amid global economic uncertainties, particularly concerning potential trade tensions. The RBA acknowledged that while underlying inflation is moderating, the outlook remains uncertain, and it emphasised the importance of sustainably returning inflation to target. Governor Michele Bullock indicated that the central bank is prepared to adjust monetary policy if international developments significantly impact Australia’s economic activity and inflation. Financial markets have adjusted their expectations for future rate cuts, now anticipating potential easing later in the year.

Equity Market

The Australian equity market, as measured by the S&P/ASX 200 Index, closed at 7,982.00 on March 28, 2025, the latest trading day before the end of the month. This value reflects a decline from the reported March closing of 8,172.4, indicating ongoing volatility influenced by global trade tensions, particularly U.S. tariffs on imports from Canada, Mexico, and China, announced earlier in 2025

Economic Performance

Australia’s economic performance is showing signs of recovery, with GDP growth projected at 1.6% for the calendar year 2025, according to recent forecasts from Deloitte Access Economics, up from 1.3% in 2024. This projection, covering the fiscal year 2024–2025 (July 2024 to June 2025), is supported by expected increases in household consumption, driven by tax cuts, lower inflation, and emerging real wage gains. For 2025–2026, GDP growth is forecasted to reach 2.3%, reflecting a gradual strengthening as monetary policy enters a rate cutting cycle, boosting spending and investment

Labour Market

The Labour market remains robust, with the unemployment rate steady at 4.1% in February 2025, up slightly from 3.9% in November 2024, primarily due to a record high labour force participation rate of 66.8%. Employment decreased by 53,000 in February, but the market fundamentals are solid, with significant job creation over the past year and underemployment at 5.9%, down from previous levels.

Currency Strength

The Australian dollar (AUD) is trading at approximately 0.629 USD as of March 28, 2025, slightly below its 2025 high of 0.63 USD, reached earlier in the year. This stability is driven by robust employment data and a strengthening economic outlook, with forecasts suggesting a range of 0.628 to 0.631 USD in early April.

Virgin Airlines prepares for an ASX listing return

Bain Capital is paving the way for Virgin Australia’s return to the ASX after a five year hiatus, following its delisting in 2020 due to COVID related financial collapse. The airline has undergone a major strategic overhaul, shedding long haul routes and simplifying operations, which has helped drive profitability recording $439 million in earnings before interest and tax in the last half of 2024. Now holding 35% of the domestic market, Virgin is set to begin investor meetings this week as part of a non-deal roadshow, led by new CEO Dave Emerson. This comes as Qatar Airways finalises its 25% stake in the airline and amid renewed optimism in the aviation sector, with Qantas shares surging and travel demand remaining strong.

US Market

Stock Market Performance

In March 2025, U.S. stock markets experienced significant declines across major indices. The Dow Jones Industrial Average fell by 5.1%, the S&P 500 decreased by 6.3%, and the Nasdaq Composite dropped by 8.1%, marking the second consecutive month of losses. These downturns were primarily influenced by escalating trade tensions, particularly the implementation of new U.S. tariffs on imports from Canada, Mexico, and China. Additionally, a significant drop in consumer confidence contributed to market volatility, reflecting apprehensions regarding trade policies and their potential impact on the economy.

Federal Reserve Policy

The Federal Reserve maintained the target range for the federal funds rate at 4.25% to 4.5% during its March meeting. Boston Federal Reserve President Susan Collins supported holding interest rates steady for a longer period, citing a cloudy U.S. economic outlook and the potential inflationary impact of recent tariffs.

Economic Performance

Real gross domestic product (GDP) increased at an annual rate of 2.4% in the fourth quarter of 2024, primarily reflecting increases in consumer and government spending. However, forecasts for the first quarter of 2025 indicate a slowdown, with projections ranging from 1.7% growth to potential contraction.

European Market

Economic Growth

The Eurozone recorded marginal GDP growth of 0.1% quarter-on-quarter in the fourth quarter of 2024, indicating stagnation in major economies. Projections for 2025 suggest modest growth, with estimates around 1.2%.

Inflation and Monetary Policy

The Bank of England maintained the base rate at 4.5% in March 2025. The Bank signaled caution against assuming future rate cuts amid ongoing economic uncertainties

International Developments

Commodity Markets

Gold prices have surged, breaking through the $3,000 per ounce mark in mid March 2025, driven by escalating geopolitical tensions and increased demand for safe-haven assets. Analysts have raised forecasts, with Goldman Sachs projecting prices to reach

$3,300 per ounce by the end of 2025.

Advice Warnings & Disclaimers.

This information is intended to provide general information only and has been prepared without considering any particular person’s objectives, financial situation or needs. Any general advice contained within or given during this presentation (whether orally or in writing) does not consider your objectives, financial situation or needs. Nothing in this presentation is intended to be investment, financial advice or a recommendation to invest in a financial product. Before acting on such information, you should consider the appropriateness of the information having regard to your personal objectives, financial situation or needs. To the maximum extent permitted by law, we (Forward Path Advisory Pty Ltd), Joel Cleary & Rathakrishna Jeyabalasingam (Rads Je) disclaim all liability and responsibility for any direct or indirect loss or damage which may be suffered as a result of relying on anything in this podcast, including any forward-looking statements. Past performance is not an indication of future performance. In particular, you should obtain professional advice before acting on the information contained in this presentation

Navigating Australia’s evolving property market requires informed financial decisions. At Forward Path Advisory, we can help you understand how these market trends affect your personal financial situation and investment strategy. Whether you’re considering buying, selling, or investing in this delicately balanced market, contact our team today for tailored advice that aligns with your long-term financial goals.