(New York) Markets ended April on a lackluster note as Wall Street plummeted as weak growth prospects and still-high inflation weighed on corporate earnings and stock prices.
Updated yesterday at 5:08 p.m.
Friday in New York, after a rebound in the indices on Thursday, Wall Street concluded with a severe loss. The Dow Jones index fell 2.77%, the tech-heavy NASDAQ tumbled 4.17% and the S&P 500 fell 3.63%.
Over the month, the Dow Jones was down almost 5%. The NASDAQ down more than 13% and is at its lowest level in a year. As for the S&P 500, with a fall of almost 9% over the month, it is posting its worst month since the start of the pandemic.
European stock markets reduced their gains from the opening. Paris took 0.39%, London 0.47%, Frankfurt 0.84% and Milan 0.82%.
Over the whole month of April Paris lost 1.89%, Frankfurt lost 2.20% and Milan -3.07%. Only London remained slightly positive in April (+0.38%).
Conflict between Ukraine and Russia, lockdowns in China, runaway inflation and rising interest rates in the United States weighed on investors.
On Friday, the PCE indicator, the preferred measure of the American Central Bank (Fed) to gauge inflation, rose 6.6% over one year and 0.9% over one month. It’s been a 40-year high.
In the euro zone, inflation remained at an unprecedented level in April, at 7.5% over one year.
“While energy prices have stopped rising recently, […] food prices have continued to soar” notes Ulrike Kastens, Economist Europe at DWS.
At the same time, growth in Western countries is showing signs of weakness.
After gross domestic product fell in the United States on Thursday in the first quarter, growth in the euro zone slowed to 0.2% on Friday.
What complicate the task of central banks to control inflation without permanently disrupting economic activity, especially for the Fed which meets next week.
Interest rates on the bond market started to rise again and approached the 3% mark again, at 2.92% for the 10-year American loan, against 2.82% at the close the day before.
The Toronto Stock Exchange’s S&P/TSX Composite Index returned 359.06 points, or 1.7%, to close with 20,762.00 points. It has fallen 5.4% since the beginning of April, marking a fifth consecutive monthly decline.
In the foreign exchange market, the Canadian dollar traded at an average rate of 78.17 cents US, up from 77.95 cents US the previous day.
On the New York Commodities Exchange, crude oil prices fell 67 cents US to US$104.69 a barrel, while natural gas rose 35.6 cents US to US$7.24 million BTUs.
The price of gold rose US$20.40 to US$1,911.70 per ounce and that of copper fell US$2.5 cents to US$4.41 per pound.
Concerns for the American giants
Google, Meta, Apple, Microsoft and Amazon posted consistently impressive earnings this week, but their outlook hasn’t thrilled investors.
Amazon reported a net quarterly loss for the first time since 2015 and its stock fell 14.05% to $2,485.63.
Apple, which on Thursday announced record sales of iPhones for this time of year, but fears that the confinements in China and the suspension of its activities in Russia will weigh on its future results, dropped 3.66% at $157.65.
Natwest worried, BBVA jumps
Among other results published, Natwest bank saw its profit increase in the first quarter, but the outlook “is strongly clouded” by the risk of household default, according to an analyst. The stock lost 2.15%. The Spanish bank BBVA soared 6.04% after its results, and its compatriot Santander (+2.18%) followed.
In Germany, justice raided the headquarters of Deutsche Bank (+0.04%) on Friday in a money laundering investigation.
China in support
On Friday, a call by senior Chinese officials for a “healthy evolution” in the technology sector helped the Hong Kong Stock Exchange climb 4.01%.
The trend then spread to stocks linked to China such as the Prosus fund (+9.01%), or luxury stocks (Kering +1.42) and Chinese technology listed on NASDAQ such as Alibaba (+11 .07%).
On the side of oil, the euro and bitcoin
Oil prices evolved in a disorganized fashion, agitated by a possible European embargo on Russian oil and gas.
Brent crude from the North Sea for June delivery, which was the last day of use as a benchmark contract, gained 1.62% to close at $109.34.
As for the barrel of American West Texas Intermediate (WTI), also for delivery in June, it lost 0.63% and ended at 104.69 dollars.
On the equity side, ExxonMobil (-2.24%) and Chevron (-3.16%) also published their results, with a jump in their profit thanks to soaring prices.
The euro rebounded after six consecutive sessions of decline against the dollar. The European currency gained 0.69% to 1.0571 dollars around 6:40 p.m. GMT.
Bitcoin fell 3.74% to $38,399.