Two scary trends in Europe.
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The fund, run by Norges Bank Investment Management, pointed to a pullback in tech stocks as the main drag, with equity returns down 1.6%. Holdings like $AAPL, $NVDA, and $TSLA all took a hit. Fixed income helped a bit, returning 1.6%, but it wasn’t enough to offset the slump. CEO Nicolai Tangen said the recent market turmoil, especially after Trump’s tariff hikes, isn’t even fully reflected yet. That early-April tariff spike alone knocked off another $200M. Despite the loss, the fund still outperformed its benchmark by 0.16%. They’ve already started trimming some tech exposure to reduce risk. CFO also confirmed they didn’t make any moves in U.S. Treasuries in April—no buying or selling. The fund's performance is mostly tied to global indexes, so there's limited room for active moves. And while it’s staying out of nuclear weapons makers like Lockheed due to ethical guidelines, there's growing political pressure in Norway to rethink that stance. Source: Wall St Engine, The Borneo Post
According to S&P Global, the Composite PMI (a key economic indicator) fell to 49.7 in April, dropping below the critical 50 mark that separates growth from contraction. The services sector was hit especially hard, with its index tumbling to 48.8 – the lowest in 14 months. This drop reflects growing worries about tariffs, as well as broader concerns around Germany’s economic and political future. This unexpected decline adds to an already grim outlook for the German economy, which is considered particularly exposed to global trade tensions. The IMF is now forecasting stagnation for Germany this year. Source: HolgerZ, Bloomberg
THE ECB CUTS INTEREST RATES BY 0.25% for seventh time in a year ▶️ The European Central Bank made yet another 25-basis-point interest rate cut on Thursday as global tariff turmoil has created widespread uncertainty and spurred fears about the euro zone’s economic growth. ▶️ A rate cut was fully anticipated by markets, with an around 94% chance of a 25-basis-point trim being priced in ahead of the decision, according to LSEG data. ▶️ The cut takes the ECB’s deposit facility rate, its key rate, to 2.25%. At its highs in mid-2023 it had been at 4%. ▶️ Tariff developments in recent weeks are widely seen by analysts and economists as a key reason for the ECB to cut interest rates. Even though many of the initial duties imposed by the U.S., as well as retaliation measures, have been put on ice or eased, fears about how they could affect economic growth have been rife. ▶️ In its policy statement, the ECB said that the “outlook for growth has deteriorated owing to rising trade tensions.” ▶️ It added, “Increased uncertainty is likely to reduce confidence among households and firms, and the adverse and volatile market response to the trade tensions is likely to have a tightening impact on financing conditions.” Source: Yahoo Finance, CNBC