Global markets react to US economic data and corporate earnings in week 18

…U.S. surge on Apple’s $110 billion buyback

Global markets experienced a week of mixed signals as investors digested economic data and corporate earnings reports from key regions. 

In the United States, markets were lifted by a softer-than-expected employment report and Apple’s record share buyback announcement, leading to gains across major indexes. 

Europe saw a similar trend, with shares rising on tech sector support but banks sliding. In Asia, markets were more subdued, with Japan’s Nikkei 225 closing lower, while the Hang Seng Index in Hong Kong extended its winning streak.

U.S. market overview:

The U.S. markets experienced a week of mixed signals, highlighted by a slowdown in job growth and an uptick in unemployment rates for April. This news was tempered by Apple’s announcement of a record $110 billion share buyback program, which propelled its stock price upwards. 

The Dow Jones Industrial Average rose by 1.18% to 38,675.68, the S&P 500 gained 1.26% to 5,127.79, and the tech-heavy Nasdaq Composite surged by 1.99% to 16,156.33.

Compared to the previous week (Week 17), the U.S. markets showed continued growth and resilience.

The S&P 500 and the Nasdaq registered their biggest weekly percentage gains since early November 2023. The Dow also posted a robust gain of 1.18%, building on the positive momentum from the prior week. 

These gains were particularly significant as the S&P 500 snapped three weeks of losses, while the Nasdaq ended four straight weeks of declines

The Federal Reserve’s more dovish stance, in light of the softer employment report, provided additional support to the markets in week 18. Fed Chair Jerome Powell’s comments following the rate decision further reassured investors about the U.S. economy’s resilience.

Corporate performance:

The first-quarter earnings season continued to impress, with 397 S&P 500 companies reporting as of Friday, with 77% exceeding consensus expectations.

Apple’s stock rose by 6.0% after its buyback announcement and strong quarterly results. Similarly, biotech firm Amgen saw its shares jump by 11.8% after positive data on its experimental drug.

However, not all companies fared well. Travel platform Expedia’s shares fell by 15.3% after revising its full-year revenue growth forecast downwards.

Asia-Pacific market performance:

In Japan, the Nikkei 225 closed lower by 0.10%, reflecting losses in the Transport, Marine Transport, and Warehousing sectors.

This contrasts with the previous week’s performance, where gains in Precision Instruments, Transportation Equipment, and Electrical/Machinery sectors led to a rise of 0.84%. Notably, there was no trading in the Japanese markets on Friday, as they were closed for Constitution Day. 

Meanwhile, the Hang Seng Index in Hong Kong extended its winning streak to eight days, rising by 1.48%. This positive momentum was driven by gains in real estate and tech stocks.

Alibaba surged by 4.07%, while Tencent rose by 1.11%, contributing to the overall bullish sentiment in the market.

South Korea’s Kospi, however, closed 0.26% lower.

Comparing this week’s performance to the previous week, Asian markets displayed mixed outcomes. Japan’s Nikkei 225, which had risen by 0.84% in the prior week, closed lower by 0.10%.

Conversely, the Hang Seng Index in Hong Kong extended its winning streak to eight days, rising by 1.48%

Europe’s market performance:

European markets ended the week higher, with the pan-European STOXX 600 rising by 0.4%. The technology sector saw a notable gain of 1.6%, following an upbeat quarterly sales forecast from Apple.

However, the banking sector declined by 0.8%, with Societe Generale leading the losses after a dismal forecast. 

Comparatively, the previous week saw a stronger performance, with the STOXX 600 ending 1.2% higher. Almost all sectors and major bourses were in positive territory, with construction and material stocks leading the gains. The slight decline in performance this week reflects investors’ cautious approach to market activities.

The UK’s FTSE 100 hit a record high, closing up 0.5% for week 18, driven by gains in homebuilder stocks. This positive sentiment was further bolstered by softer-than-expected U.S. jobs data, which boosted investor confidence. 

In France, the CAC 40 gained 0.54% at the close, with industrials leading the gains and utilities and technology sectors lagging. 

Germany’s DAX index ended the week 0.59% higher, reflecting broader positive sentiment across European markets.

Conclusion:

Despite economic uncertainties and varied corporate performances, global markets ended the week on a positive note. Investors remain cautious, closely monitoring economic data and corporate earnings for further insights into the market’s direction.