Welcome to this week’s Market Wrap. Downward pressure on prices across the main indices spilled into trading on Monday and Tuesday, leaving most regions finishing the month either flat or negative.
Index changes
This Week | 1 Month | 1 Year | |
FTSE 100 | +1.9% | -0.1% | +8.0% |
FTSE AIM All Share | -1.0% | -2.3% | -19.8% |
S&P 500 | -0.2% | -6.3% | +2.5% |
FTSEuroFirst 300 (ex-UK) | +1.0% | -3.3% | +1.2% |
S&P/ASX All Ordinaries | +1.6% | -0.3% | +5.1% |
Source: Stockopedia, London Stock Exchange
Financial headlines
The US S&P 500 is down more than 10% year to date, crossing the threshold to bear territory. It was another big week for Q1 earnings reports, with mixed news from high profile names like Apple (NSQ:AAPL), Amazon (NSQ:AMZN) and Meta Platforms (NSQ:FB).
Beyond the numbers, there’s a clear sense that even premium-product mega stocks like Apple are feeling the heat from supply chain issues, inflationary pressures and the Ukraine/Russia war. Certainly there appears to be increasing concerns about the prospect of recession as inflation seemingly runs away.
Apple is a tech giant with the advantage of being a luxury brand in many ways, and this gives it some defensive clout. Year-on-year Q1 sales were up 9% to $97.3bn, with earnings per share coming in at $1.52 against forecasts of $1.43.
As a quick aside, I saw a note from Morgan Stanley on Wednesday saying that nearly 80% of the companies that had reported first-quarter earnings had beaten estimates.
One that didn’t beat estimates was Amazon, which posted its first quarterly loss since 2015 plus news of slowing growth and a $7.6bn loss on its investment in the EV firm Rivian. By contrast, Meta Platforms did surprise to the upside and my colleague Megan wrote a great assessment of its quality and value strengths here.
Elsewhere, Emanuel Macron secured victory, and a second term in office, in the French presidential election last Sunday. Financial headlines across Europe this week have been dominated by cost of living prices, particularly skewed to rising energy costs. Russia’s ‘closing of the taps’ on gas pipelines to Poland and Bulgaria was a major story and pushed gas prices even higher across the continent.
In the UK, new business data suggests - as one might expect - that confidence is collapsing. A CBI Industrial Trends survey on Monday reported that business optimism in Q1 fell at the sharpest rate since April 2020, with orders slowing and costs rising. A second report mid-week said that retail sales in the year to April had also been ‘disappointing’.
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