Equity markets are set to end lower for the week as recession fear resurfaces

US equities remained under pressure for the second straight session on Thursday as investors continued to digest the latest batch of earnings and comments from Federal Reserve speakers. The Dow lost 0.3%, while the S&P 500 and the Nasdaq slid 0.6% and 0.8%, respectively. In Europe, the Euro Stoxx 50 index retreated by 0.2%, dragged lower by hefty losses in the auto sector. 

Summary as at 21.04.2023 

• Most Asian equity markets sank on Friday, extending losses into a third straight session as concerns over an economic slowdown were exacerbated by weak data, while hawkish signals from the Federal Reserve also rattled sentiment. Investors also reacted to data showing Japan’s core inflation held steady in March, while private surveys for Japan and Australia pointed to expanding manufacturing activity for both countries. The S&P/ASX 200, Nikkei 225, Kospi, Shanghai Composite and Hang Seng indices all declined. 
• European shares are poised for a steady start while US equity futures are seen flat as traders digest corporate results and soft US economic data. 
• Oil prices moved in a tight range on Friday after falling sharply this week as soft economic readings and fears of rising interest rates pushed up uncertainty over a recovery in demand this year. Crude prices were set to close the week down over 6%, snapping four straight positive weeks. 
• Most European Central Bank policymakers agreed to raise the key interest rates by 50 basis points last month, though some members would have preferred not to increase them until the financial market tensions had subsided, the accounts of the central bank’s March policy meeting showed. The ECB is set to deliver a 25-bps rate increase in May and the other two are expected by mid-year after raising borrowing costs at the fastest pace on record to combat inflation. 
• Cleveland Fed President Loretta Mester, typically among the more hawkish of policymakers, said yesterday that she favoured getting rates above 5% because inflation was still too high. Philadelphia Fed chief Patrick Harmer had a similar message. 
• US President Joe Biden is preparing to make his intention to seek a second term official next week, with advisors planning to launch his re-election campaign as soon as Tuesday, coinciding with the anniversary of his 2020 campaign announcement. 
• The number of Americans filing for unemployment benefits rose by 5,000 to 245,000 on the week ending 15^th April, the most in one month and above market expectations of 240,000. The result was in line with a bath of recent data that suggested some softening in the US labour market, breaking the long streak of releases pointing to a tight labour market. 
• SAP reported this morning a decline in first-quarter profit while revenue increased year over year. The net profit for the quarter came in at €479 million, significantly less than the €740 million registered a year ago while revenue was €7.44 billion, compared to €6.77 billion last year.  
• Mercedes-Benz on Thursday posted a first-quarter group adjusted return on sales of 14.8%, above market expectations of a 13.4% margin. In its statement, Mercedes spoke of healthy net pricing in the passenger car business, higher unit sales and a good product mix. The company sold 503,000 passenger cars in Q1, around 3% more than in the previous year.