Fast food for thought

Click here to read our #globalmarkets weekly wrap up

Written by Charles-Henry Monchau | May 4, 2024 7:12:00 PM

 PDF

 

WEEKLY SUMMARY: Big Taper, Bad Data, & Buyback Bonanza

After a volatile week, the main US equity indices ended in positive territory thanks to a strong rally on Friday after a softer-than-expected April jobs report boosted hopes that the Fed could start cutting interest rates soon. Overall, US data have been surprising on the downside recently and markets are now pricing in two full Fed rate cuts in 2024 and three more cuts in 2025. Over the week, growth stocks outperformed value shares and small-caps outpaced large-caps. It was the 2nd-busiest week of Q1 earnings reports and a positive reception to Apple’s earnings release after the close of trading on Thursday seemed to help drive a rebound in overall sentiment. The company beat consensus revenue expectations and announced a $110 billion buyback program, the largest such repurchase in history. Investors’ sentiment was also boosted by the FOMC statement and conference call on Wednesday as Jay Powell pushed back against stagflation worries and announced a larger than expected QT tapering starting in June. A more dovish than expected Fed and the evidence of a cooling jobs market helped push the US 10-year yield to an intraday low of around 4.45% on Friday, its lowest level in nearly a month. The pan-European STOXX Europe 600 Index ended the week 0.48% lower, the Nikkei 225 Index rose 0.8% while the Shanghai Composite Index gained 0.52%. Crude Oil suffered its largest weekly drop in 3 months. Gold and the dollar weakened while bitcoin bounced back above $62k on Friday.