The markets breathed a sigh of relief in April, thanks especially to signs of possible monetary policy easing by central banks. As a result, the world’s major stock exchanges held up well overall, albeit with varying performances. However, concerns still persist about the high level of inflation and the resilience of the banking sector after the vicissitudes just experienced.
At the aggregate level, the MSCI World index performed well for the month, closing at +1.9%. In the United States, the S&P 500 index did well, closing positive by 1.45%. Slightly positive also Nasdaq technology index that closed at +0.30% after slipping -3.20% during the month. This recovery came thanks to the release of better-than-expected quarterly results from tech giants Microsoft, Alphabet and Meta. On the subject of quarterly reports, it is surprising how well corporate earnings held up even in this first quarter, given fears of an economic slowdown.
European stock exchanges performed well, with Euro Stoxx index appreciating +1.20%. Also good German index +2.20%, countering Italian index with -0.40% due to greater weight in banking stocks. Swiss index also rebounded with +3.10%. Contrasting performance in Asia where Japanese index closes positive +2.40%, while Hong Kong index continues to decline closing at -2.50%.
Well overall the commodity index, which closes April up 0.20 percent. This result is mainly due to the good performance of gold, which closes +1.1%.
On the bond market front, it was a relatively quiet month after last month’s shock related to the problems in the banking sector. Euro area rates rose and then fell, closing slightly up from the previous month’s levels.
The trigger that could lead to increased volatility in the financial markets in the short term will be the debt crisis, due to the rapid rise in rates in recent months. At the moment there have only been defaults in the U.S. regional bank sector, but this danger could expand to other sectors in other geographic areas and have a negative impact on financial markets.