Global Markets Weekly: A Comprehensive Overview of Worldwide Economic and Market Trends
United States
- Stocks faced their third consecutive week of losses, influenced by geopolitical tensions and concerns over persistent high interest rates.
- Technology stocks, particularly mega-caps, underperformed due to the impact of rising rates on future earnings valuations.
- The small-cap Russell 2000 Index saw a decline, moving further into negative territory for the year.
- Despite geopolitical tensions, the market began on a strong note, influenced by the interception of missiles fired at Israel, but optimism waned as the week progressed.
- Retail sales in March exceeded expectations, suggesting the Federal Reserve might delay interest rate cuts, possibly until 2025.
- Housing market data indicated stress, with housing starts, permits, and existing home sales all showing signs of decline.
- Federal Reserve officials signaled a cautious stance on rate cuts, emphasizing a data-dependent approach.
- The yield on the 10-year U.S. Treasury note reached its highest level since early November, while municipal and corporate bond markets showed mixed responses to the economic data and geopolitical tensions.
Market Indexes Changes
- DJIA: 37,986.40 (+0.79%)
- S&P 500: 4,967.23 (-3.04%)
- Nasdaq Composite: 15,282.01 (-5.52%)
- S&P MidCap 400: 2,836.88 (-2.17%)
- Russell 2000: 1,947.66 (-2.77%)
Europe
- The STOXX Europe 600 Index ended the week 1.18% lower amid rising Middle East tensions.
- Major European stock indexes showed mixed performance, with Germany's DAX and the UK's FTSE 100 experiencing declines, while Italy's FTSE MIB posted gains.
- Government bond yields in Europe increased broadly.
- UK inflation and wage growth slowed slightly less than anticipated, maintaining concerns over persistent inflationary pressures.
- European Central Bank officials suggested a potential rate cut in June, keeping a close watch on oil prices and the economic impact of Middle East conflicts.
Japan
- Japanese stock markets faced significant losses, partly due to concerns over decreased AI-related demand and escalating Middle East tensions.
- The yield on the 10-year Japanese government bond remained stable, while the yen strengthened slightly amidst geopolitical unrest.
- Exports continued to grow, supported by the weak yen and a pickup in Chinese demand.
- Consumer price inflation showed signs of easing, potentially impacting future monetary policy decisions.
China
- Chinese equities rose following better-than-expected GDP growth in the first quarter.
- Industrial production and retail sales growth were slower than expected, presenting a mixed economic picture.
- Fixed asset investment exceeded forecasts, despite a decline in property investment.
- The People’s Bank of China conducted a net withdrawal of funds from the banking system, indicating a cautious approach to liquidity management.
- New home prices continued to decline, highlighting ongoing challenges in the real estate sector.
Other Key Markets
- Israel conducted a "limited" response to Iran's direct attack, marking a significant escalation in regional tensions.
- Türkiye's central bank prioritized disinflation, indicating a focus on controlling inflation over building foreign exchange reserves.
Disclosures
I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.