US equities ended mixed Wednesday, with the S&P 500 Index and Dow Jones Industrial Average slipping and Nasdaq creeping slightly higher after another major bank topped earnings expectations but other companies fell short, contributing to ongoing uncertainty over the outlook for the economy, business performance, and interest rates.  Meantime, European equity markets were also little changed yesterday, dragged by tech and mining shares while insurance companies rose. 

Summary as at 20.04.2023 

  • Most Asian equity markets retreated on Thursday, tracking a weak lead-in from Wall Street, as fears of rising interest rates and slowing economic growth kept traders wary of risk-driven assets.  Investors also digested data showing Japanese exports grew more than expected in March, though the country posted a trade deficit for the 20th consecutive month.  Meanwhile, the People’s Bank of China kept its key lending rates unchanged for the eighth consecutive month at the April fixing.  The Kospi, Shanghai Composite and Shenzhen Component declined, with the S&P/ASX 200, Nikkei 225 and Hang Seng rising slightly. 
  • European shares are poised for a tepid start and US equity futures are slightly down this morning as investors continue to assess the outlook for interest rates and corporate earnings. 
  • Oil prices fell this morning as the US dollar strengthened on rate-hike expectations and after recent economic data from the US and China did little to encourage expectations that demand will improve.  Both Brent and West Texas Intermediate declined for a second day after a 2% fall on Wednesday and traded at their lowest level since OPEC+ announced its surprise production cut on 2nd April. 
  • The US economy stalled in recent weeks, with hiring and inflation slowing and access to credit narrowing, the Federal Reserve said in its Beige Book survey of regional business contracts.  It may add to concerns that the economy is slipping into recession and likely reinforces the chances that Fed policymakers will pause their run of interest-rate hikes following an expected quarter-point increase at the next gathering in May.  Meanwhile, New York Fed President John Willias said that the recent stress may make it more challenging for households and businesses to access credit. 
  • The consumer price inflation rate in the UK eased to 10.1% year-on-year in March, down from 10.4% in February but more than market expectations of 9.8%.  The rate remained above the 10% mark for a seventh consecutive period, suggesting policymakers might continue to raise borrowing costs.  The core inflation was unchanged at 6.2% in March, not far from September’s record of 6.5%. 
  • United Airlines’ shares rallied over 7% yesterday after the carrier reported a net loss of 63 cents a share, about 10 cents smaller than expected.  Like Delta last week, the airline expressed optimism over travel demand in the second quarter with the company saying that “demand remains strong, especially internationally, where we are growing at twice the domestic rate.” 
  • Morgan Stanley, said Wednesday it earned $1.70 per share in the first quarter, about four cents above Wall Street forecasts, while revenue at $14.52 billion surpassed expectations by about 4%.  It shared edged slightly higher after reporting. 
  • US Bancorp’s shares also gained yesterday after the bank said it earned $1.16 per share, about 4 cents above expectations, on revenue of $7.18 billion.  The bank said its quarter-end deposits were down 3.7% at $505.3 billion. 
  • Tesla missed market estimates for first-quarter total gross margin when it released results Wednesday after the market close, throttled by a series of aggressive price cuts meant to spur demand in a sagging economy and fend off rising competition.  Total gross margin came in at 19.3%, compared with expectations of 22.4%.  Meantime, during a conference call, CEO Elon Musk said that Tesla will likely launch full self-drive technology this year and generate significant profits that offset some of the margin pressure it’s facing due to aggressive price cuts. 
  • IBM shares rose in the extended session Wednesday after the company topped earnings estimates and software sales expectations, and played up the efficiency of its own Al, while axing thousands of jobs.   First-quarter net income came in at $927 million, or $1.02 a share, compared with $733 million, or 82 cents a share, in the year-ago period.