Ormiga Weekly Market Update: 28th April 2023

US Despite a turbulent week US markets ended on a high with the S&P500 and Dow Jones Industrial Average indices both closing up over 0.85%. Last week marked one of the most anticipated and busiest weeks of corporate earnings season so far with Meta, Microsoft, Amazon and Alphabet all reporting. Meta jumped over 14% after reporting stronger than expected earnings on Thursday pushing tech stocks up generally. Oil giant ExxonMobil's reported recort profits of $11.4bn for the first three months of the year, helped by the increased demand for oil and gas.

Investors kept an eye on signs of an economic slowdown with manufacturing output and shipping volumes both coming in well below expectations for the month while durable goods data was up and the Commerce Departments quarter one GDP growth estimate came in at 1.1%, well below the 2% consensus.

Renewed turmoil in the US banking sector also worried investors and deposit holders alike with consumers shifting away from regional to national banks and stock prices of some regional banks falling by as much as 50%.

Europe European stock markets struggled for much of the week as fears of continued interest rate rises and their effects on the economy continued to weigh. German inflation fell to 7.6% in April from 7.8% in March while Spain and France both reported increases over the same period.

The UK´s budget deficit grew to £139 billion, its highest on record, while still being below the Office for Budget Responsibility’s estimate of £152 billion. Lloyds Bank reported that business confidence in the UK had risen to its highest level in almost a year. UK's Competition and Markets Authority (CMA) blicked a $68.7 billion deal for Microsoft to take over games company Activision saying it was concerned the deal would offer reduced innovation and less choice for gamers in the fast-growing cloud gaming business.

Asia

Japanese markets rose by more than 1% for the week, encouraged by the central bank’s decision to leave short term interest rates at -0.1% despite upgrading its inflation forecast from 1.6% to 1.8%. Bucking a global trend, Japan’s central bank continues to battle low inflation and seek out its 2% target.

Chinese markets ended the week mixed as the government continues to look for ways to stimulate domestic demand and economic growth. The People’s Bank of China extended its short-term cash injections to national banks to ensure short term liquidity targets are met.