Global equities are stabilizing after a week of heavy losses. The S&P 500 recorded its biggest one-week fall since March 2023 last week. The flight to safety that dominated movements in the previous week eased as markets calmed down with the fact that Iran did not escalate further after the Israeli retaliation.
The focus is now on corporate earnings and some key economic numbers, including US PCE data – the Fed's preferred inflation measure.
Nvidia is up more than 1% after losing a whopping $212 billion in market value on Friday amid the general sharp selloff in the tech/growth sector. Salesforce is up more than 3.5% after news that takeover talks with Informatica Inc. have cooled. Verizon rose after a strong earnings report. Tesla, on the other hand, continues to weigh on Wall Street: the EV pioneer extended its losses after the company announced further price cuts for its electric vehicles ahead of Tuesday's earnings report.
Selling was particularly heavy on Friday as investors positioned themselves cautiously ahead of the weekend.
So far, we have had a solid earnings season. I believe we will continue to see robust corporate earnings, which could be enough to pull Wall Street out of its recent negative trend, even if concerns about higher interest rates in the longer term continue to push yields higher. I expect most big tech companies in particular to remain optimistic about continued revenue growth.
US growth and inflation data will influence interest rate expectations later this week. Further signs of stubborn inflation in the US remain a major risk this week, so investors should remain cautious overall.
We have seen a sharp fall in gold and oil also remains weak as the risk premium in particular is reduced with rising expectations that the crisis in the Middle East can be contained. Gold remains very attractive in the medium term and oil will benefit from increasing signs of an improving global economy and rising demand expectations.
I expect equity markets to stabilize today, but investors will not be taking very big bets on today's quiet start to a busy week.
👁 ROB'S MARKET OVERVIEW:
April 22, 2024
🌐/🇺🇸 Global Markets ↗️/➡️
Cyclical / Luxury Stocks ↗️/➡️
Tech/Growth Stocks ↗️ (Tesla remains a drag in tech)
Financial Stocks ↗️/➡️
Defensive Stocks ➡️
Energy Stocks ➡️/↗️ (weighed down from temporary weakness in oil prices, but with limited additional downside potential)
Materials Stocks ↗️/➡️
💱 Forex
AUD ↗️ (benefiting from improved risk sentiment)
USD ↗️/➡️ (benefiting from higher yields; short-term limited upside)
CAD ↗️/➡️
EUR ➡️
GBP, JPY, CHF ↘️/➡️
⚒ Commodity Markets ↗️
Oil prices ↘️/↕️ (under pressure as geopolitical tensions fade; medium-term bullish)
Natural Gas prices ↗️/↕️
Metal prices ↘️/➡️ (metal prices to stabilize, remaining bullish)
Gold ↘️/↕️ (heavy headwinds as risk premium reduced; improved risk sentiment)
⚡️Cryptos ↗️/↕️ (reached one-week high after Bitcoin halving – remains volatile)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
Your Robert
