Shares in the US edged higher on Monday, extending last week’s gains as investors geared up for a busy week of earnings reports and the Federal Reserve’s rate decision. The S&P 500 and Nasdaq rose by 0.3%, while the Dow climbed 148 points. Tesla shares surged 15.8% after receiving approval from Chinese authorities to deploy its driver-assistance system. Earnings season will peak with reports from Amazon, Apple, and other major companies. Meanwhile, in Europe, the Stoxx 50 Index closed 0.5% lower, pressured by losses in heavyweight sectors such as luxury brands like LVMH and Hermes, as well as tech shares like ASML and SAP, despite positive earnings from BBVA. 

Summary for 30.04.2024 

  • Asian equity markets rose on Tuesday, following Wall Street’s gains driven by strong corporate earnings. Economic data showed China’s manufacturing and services remained in expansion in April, while Japan and South Korea saw mixed industrial production and retail sales. Samsung Electronics reported a 933% surge in Q1 operating profit due to rising memory chip prices amid AI optimism. 
  • European markets are expected to see a data-heavy session, with a focus on eurozone inflation figures for April.  Meanwhile, US equity futures are holding steady ahead of the opening bell, as investors await more corporate earnings, the Federal Reserve’s policy decision, and a key jobs report. 
  • Oil prices edged down on Tuesday as ceasefire talks between Israel and Hamas in Cairo eased concerns about an expanded conflict in the Middle East. Brent crude futures dipped to $88.30 a barrel, while US West Texas Intermediate crude slipped to $82.50 a barrel. Market worries about US interest rates also weighed on prices. Continued attacks by Yemen’s Houthis on maritime traffic near the Suez Canal kept a floor under prices.  
  • China’s manufacturing activity surged to a 14-month high in April with the Caixin/S&P Global PMI rising to 51.4, indicating solid growth in output and new orders. Despite this, concerns remain about meeting the 5.0% GDP growth target for 2024 due to frail domestic demand and weakness in the property sector. Input costs rose while profits fell, leading to cautious hiring and concerns about deflation. 
  • Germany’s consumer price inflation remained at 2.2% in April 2024, matching its lowest level since May 2021 and slightly below the anticipated 2.3%. Services inflation slowed to 3.4% from 3.7% in March, balanced by a rise in food prices and a smaller decline in energy costs due to the end of a tax cut on natural gas. The EU-harmonized rate increased to 2.4%, slightly above market expectations, while core inflation dropped to 3.0%, its lowest since March 2022. 
  • In April, the Euro Area’s economic sentiment indicator dropped to 95.6, missing expectations of 96.9, primarily due to a sharp decline in confidence among manufacturers. Service providers, retailers, and constructors also saw worsened morale. Consumer sentiment improved slightly. Inflation expectations decreased, but varied among the largest economies, with France and Italy declining, while Spain, Germany, and the Netherlands improved. 
  • HSBC Holdings PLC announced CEO Noel Quin’s retirement after nearly five years, during which he oversaw a transformation focusing on core consumer banking in Europe and Asia, resulting in improved earnings. Q1 pretax profit was $12.65 billion, slightly down, with net interest income at $8.7 billion. The bank announced a $3 billion share buyback. 
  • Samsung Electronics recorded a tenfold surge in first-quarter profit, reaching 6.6 trillion won ($4.8 billion), driven by AI-driven chip demand. Revenue rose to 71.9 trillion won. The surge was supported by strong sales of the Galaxy S24 smartphone line and a weaker Korean won. Samsung plans to develop next-gen HBM chips for AI amid expectations of continued demand. 
  • Banco Santander reported an 11% increase in net profit for the first quarter compared to the same period in 2023, attributing the growth to a strong performance in its retail business, particularly in Europe. The euro zone’s second-largest lender in terms of market value recorded a net profit of €2.85 billion, up from €2.57 billion in the corresponding quarter last year and practically in line with analysts’ expectations. 
  • Mercedes-Benz reported lower-than-expected first-quarter earnings before interest and tax, down 29.8% to €3.86 billion, but in line with expectations. Free cash flow from its industrial business grew by 3.2% to €2.23 billion. The company aims to maintain current pricing levels and expects sales volume to increase in the coming quarters, while forecasting stable sales and slightly lower EBIT for 2024. 
  • Stellantis reported a 12% revenue decline in Q1 due to lower volumes, product mix, and exchange rates, offset by strong pricing. CFO Natalie Knight attributed this to transitioning to new platforms and reducing inventories. Despite missing analyst expectations, Stellantis aims for growth with 25 new model launches in 2024, including 18 EVs. 
  • Adidas reported strong first-quarter results, with growth in all regions except North America, where high inventory levels persisted. Revenue in North America declined 4%, an improvement from the previous quarter. The company cited conservative sell-in due to excess inventory. However, improved inventory levels, reduced discounts, and lower sourcing costs boosted Adidas’ gross margin to 51.2%. 
  • MicroStrategy‘s Q1 2024 earnings disappointed, with a loss per share of $8.26, far exceeding the expected $0.58, and revenue of $115.25 million, below the anticipated $121.72 million. However, the company purchased 25,250 bitcoins, totaling 214,400, with an average cost of $35,180 each. CEO Phong Le emphasised their commitment to Bitcoin development and highlighted double-digit growth in subscription services. 
  • BYD’s Q1 2024 saw its weakest profit growth since 2022, with a 10.6% increase in net profit to 4.57 billion yuan ($631.08 million) and a 4% rise in revenue to 124.94 billion yuan, due to slowing EV demand and a price war in China’s auto market. BYD aims for a 20% increase in 2024 sales amid pressure from local EV competitors, as seen with interactions between BYD’s founder and Xiaomi’s founder at the Beijing auto show. 
  • On Monday BBVA raised its annual profit growth forecast after exceeding Q1 earnings expectations. Net profit surged 19% to €2.2 billio, beating estimates of €2.06 billion, driven by a 15.4% increase in net interest income. CEO Onur Genç expects “double-digit” growth in 2024. UBS noted tempered forecasts for BBVA’s Mexico division due to slowing net interest income growth.  
  • Apple Inc shares rose 2.5% on Monday after Bernstein Societe Generale upgraded the shares to “outperform,” citing prospects for phone replacement sales boosted by generative artificial intelligence updates. Analyst Toni Sacconaghi highlighted potential for a strong iPhone 16 cycle, estimating revenue of $416.9 billion in 2025, beating consensus expectations. He maintained a price target of $195. 
  • Morgan Stanley lowered its price target for AMD shares to $177 from $193, maintaining an Overweight rating. They expressed long-term concerns but remain constructive on the equity, despite a mixed earnings picture and competition from NVIDIA’s Blackwell chip. The bank sees potential challenges ahead but believes AMD can react effectively on the product front. 
  • HSBC has shifted to a more defensive stance in the equity market due to changing interest rate expectations. They highlight a potential economic recovery but also geopolitical risks. With falling EPS growth forecasts, they attribute the recent market rally to PE multiple expansion. HSBC upgrades Industrials and Basic Materials, downgrades Technology, and adjusts sector weightings in Europe and the UK.