Tough US economy reassures stock exchanges, Wall Street best month since 2020

(Il Sole 24 Ore Radiocor) - The European stock markets closed on a positive note as macro data showed the US economy held up, alongside solid firm corporate earnings, while new signs of a breakthrough in talks between the US and Iran. Thus, thanks to the turnaround in oil prices, Piazza Affari closed the last session of the week up 0.94% (over 48,000 points) (the markets will be closed for the May Day holiday), propelling the Ftse Mib towards a over 8% surge in April. On the macro front, March's Pce inflation was in line with expectations and the US GDP for the first quarter improved (+2% from the previous quarter), albeit below estimates (+2.3%). "Overall, these data can be interpreted as a signal that the US economy remains robust, even in the face of the oil price shock," comments Janus Henderson(Bradford Smith). Moreover, the market 'is reassured by the fact that global central banks are pausing'. After the Fed, the ECB (like the BoE) also left rates unchanged (at 2%) but signalled that upside risks to inflation and downside risks to growth have intensified. On the Middle East front - according to CNN - the US expects an updated proposal from Teheran by tomorrow to end the conflict.

"Rising energy prices will keep inflation well above 2% in the short term. As high energy prices continue, the likely impact on headline inflation through indirect and second-round effects will intensify." This was said by ECB President Christine Lagarde at a press conference in Frankfurt. "We will therefore closely monitor the magnitude and persistence of the increase in energy prices and how it is transmitted to price and wage formation, inflation expectations and overall economic dynamics," the Eurotower chief added, reiterating that the institution's approach will be "data-driven for the next steps.

Stock markets left behind the March frost and warmed up again in a month of April marked first and foremost by the ceasefire between the United States and Iran. The pace of trading was also marked by the quarterly earnings season, which saw most companies exceed market expectations. And in the last session of the week, it emerged that the US economy is holding up, while there are no surprises from central banks (unchanged rates in both Europe and the US). Against this backdrop, the Euro Stoxx 600 rebounded 4.5 per cent after its monthly performance in March (-8 per cent) since June 2022. The pink jersey goes to Milan's Ftse Mib, up 8.5% (from -6.1%), followed by Frankfurt (+6.3% from -10.5%), Madrid (+4% from -7.1%), Paris (+3% from -8.9%) and London (+1.9% from -6.7%). Wall Street is preparing to do even better. The S&P 500, which updated its intraday record, is on track for a 10% rise, while the Nasdaq is on track for a 14% jump. Both indices are on track to record their best month since November and April of that year, respectively.

Oil also slowed down, although it remains under pressure due to tensions in the Strait of Hormuz, with the ballet of negotiations between Washington and Tehran. Wti posted +6% in April (up from +58.7% in March), while Brent reversed course (-3.5% from +64%). The rise since the start of the year remains strong (+89% and +84.5% respectively). The monthly balance sheet of stocks in Piazza Affari saw St (+58%), which benefited from the rally in the chip sector and quarterly results and guidance above expectations. Also Prysmian (+29%), which is closely linked to the tech sector and also passed the quarterly accounts test. Nexi (+25.4%) also did well, with the stock recovering sharply after the change at the helm with the departure of Paolo Bertoluzzo, who left the helm to Bernardo Mingrone after 10 years. Mps (+21.4%) and Mediobanca (+18.8%), also stood out after Luigi Lovaglio's surprise victory at the helm of Rocca Salimbeni. Wearing the black jersey in April were defence stocks: Leonardo (-8.6%), Fincantieri (-8.5%) and Avio (-5.6%).

The Wall Street stock market closed higher, which despite the war in the Middle East saw indices at their highest level since 2020. The Nasdaq gained 0.89 and closed the month of April up 15 per cent, its best monthly performance since early 2020. The S&P 500 also closed the month with its best result since November 2020, marking a +1.04% gain today. Both indices reached new all-time highs. The Dow Jones gained 1.62%. On the stock market, the Caterpillar gained ground, thanks to better-than-expected quarterly results. The same goes for Amazon. Earnings in the S&P 500 and Nasdaq, however, are held back by losses in Meta Platforms and Microsoft Corp. Meta's shares are hurt by the company's latest capital expenditure forecast, as user growth has disappointed expectations. Weighing on Microsoft is the announcement that capital expenditure will reach $190 billion.