Market Highlights 💡 - 22 April 2024

Global markets fall on rate cut expectations and rising Middle East tensions

Index changes:

🇺🇸 S&P 500: -0.87% 📉

🇺🇸 Nasdaq: -2.05% 📉

🇪🇺 Stoxx 600 Index: -0.06% 📉

🇯🇵 Nikkei 225 Index: -2.66% 📉

🇭🇰 Hang Seng Index: -0.99% 📉

🇨🇳 CSI 300 Index: -0.78% 📉

* U.S. markets were broadly lower on Friday, with the S&P 500 and Nasdaq Composite down -0.9% and -2.1%, respectively, as poor quarterly earnings and growing pessimism about a Fed rate cut soon also weakened increased market popularity.

* Asia-Pacific stocks closed broadly lower, with the CSI 300 and Hang Seng down -0.8% and -1.0% respectively, as investors were rattled by reports of an Israeli missile attack on Iran and rising tensions in the Middle East sparked a scramble for safe-haven assets.

* Japan's core CPI, excluding fresh food, rose 2.6% year-on-year in March, below market expectations for a 2.7% year-on-year rise and down from February's 2.8% year-on-year rise.

💡 Future events: 💡

* China's 1- and 5-year loan base rates and EU consumer confidence were the focus of investors' attention on Monday.

* Japan, the European Union and the United States are expected to release preview manufacturing PMI data, the EU and the United States are also expected to release preview service PMI data, and U.S. new home sales will be released on Tuesday.

💡 Things you need to know today: 💡

1. American Express beat first-quarter profit expectations on strong spending by affluent consumers. However, company executives stressed the importance of shifting focus back to U.S. small business customers, where growth has slowed.

American Express

2. The UAW achieved a historic milestone with its first successful unionization vote at an auto plant in the southern United States. Now the union is planning another victory next month at a Mercedes plant in Alabama.

UAW

3. Tesla on Friday cut the prices of its Model Y, Model X and Model S cars in the United States by $2,000 each after first-quarter deliveries from the world's most valuable automaker fell short of expectations.

Tesla price cut again

4. The Governor of the Bank of Japan said on Friday that if underlying inflation continues to rise, the central bank is inclined to raise interest rates and may begin to reduce large-scale bond purchases at a later stage.

5. On Friday, the Governor of the Bank of Korea said that the possibility of taking additional policy measures to stabilize the depreciation of the South Korean won depends on the development of the situation in the Middle East.

✅ KEY TAKEAWAYS:

In this environment, interest rates will not fall and multiples will not expand as a result, but must be driven by earnings growth. Therefore, the less favorable the interest rate outlook is for lower rates, the more important the outlook for earnings growth becomes.

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