Markets Update Friday 30/04/2021 – Come back in November?

Frankfurt -30/04/2021

Come back in November?

April brought gains predominantly for the international stock markets, but it still became a little more uncomfortable. Even though many companies were convinced with strong quarterly figures, various risk factors remain and are becoming increasingly apparent to some market participants. 

Sell in May and go away!?

Whether the old stock market adage, according to which the month of May heralds a weaker stock market phase, will prove true this year, the coming trading days will show. However, according to some investment experts, the stock markets are likely to develop rather stably this year.

US Markets at a glance

On Wall Street, profit-taking before the weekend and month’s end led to losses. The Dow Jones remained in the red for the entire trading day and slipped 0.54 per cent to 33,874.85 points at the close of trading. The NASDAQ Composite was also weaker, losing 0.85 per cent to 13,962.68 points.

After the record highs of the previous day, Wall Street saw profit-taking at the end of the week. Traders pointed to a turbulent week with a flood of corporate figures and the meeting of the US Federal Reserve. Despite the losses on Friday, April was still the best month for the S&P-500 since November. The picture also included weak economic data from China, where purchasing managers’ indices fell in April and missed expectations.

In addition, the Corona headlines increased concerns. The current wave of infection is raging mainly in Japan, Brazil and India. This development could severely disrupt global supply chains, causing prices to rise. This could add fuel to the already high inflation in the US, they said.

Positive US economic data, on the other hand, is not supporting the market. The sentiment of purchasing managers in the Chicago area unexpectedly brightened in April. The index of US consumer sentiment calculated at the University of Michigan also rose more than expected in April.

Far East Markets at a glance

The stock exchanges in the Far East also fell at the end of the month.

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Japan’s leading index, the Nikkei, was down 0.83 per cent at 28,812.63 points on Friday. On the Chinese mainland, the Shanghai Composite fell by 0.81 per cent to 3,446.86 points. The Hang Seng lost 1.97 per cent to 28,724.88 points in Hong Kong.

Stock exchanges in Asia declined uniformly before the weekend, with good US data failing to provide any support. On Friday, caution dominated among investors: In Tokyo and Shanghai, longer trading breaks are imminent due to celebrations around May 1 – work will not resume until Thursday next week.

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New economic data failed to generate buying sentiment on the Chinese stock markets. Although the Caixin manufacturing index improved, the purchasing managers’ indices for manufacturing and the service sector fell in April compared to March. In Japan, meanwhile, industrial production was better, while new consumer price data argue for further loose monetary policy.

European Markets at a glance

In the end, the stock markets in Europe also lost ground today. The EuroSTOXX 50 started Friday’s trading marginally lower by 0.09 per cent at 3,993.19 index units. It climbed temporarily but then fell back into the red and ended the day 0.55 per cent lower at 3,974.74 points.

In Germany, the DAX opened the session 0.33 per cent up at 15,204.39 points. It failed to find a clear direction during the day and eventually gave up brief gains to enter the weekend 0.12 per cent weaker at 15,135.91 points. The TecDAX ultimately posted a gain of 0.4 per cent to 3,503.01 points.

Before the weekend, investors in the European stock markets remained on the sidelines. The focus remained on the financial statements of numerous companies, such as MTU and Wacker Chemie, as well as a flood of economic data. 

Forex, gold, oil and crypto

The euro reacted to weak EU economic data with more significant declines against the US dollar on the foreign exchange market. The common currency traded at 1.2020 dollars in the evening, almost one cent below Thursday’s level. 

Oil prices also came under greater pressure on the last trading day of the week. In late trading, a barrel of US grade WTI cost 63.40 dollars, around 1.5 per cent less than the previous day. Brent crude also fell significantly, by 1.9 per cent to $67.26 an ounce. Prices are being burdened by the somewhat stronger greenback, which makes commodities traded in the US currency more expensive for investors outside the dollar area.

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Gold prices hardly changed today and traded in a tight range between $1,764 and $1,773 per troy ounce.

Cryptocurrencies, on the other hand, continued their rally and extended their weekly gains further. Bitcoin moved up by 8.2 per cent to $58,250, while Ethereum added another 3.7 per cent to $2,848, a new record high for the number 2 in cryptoland. XRP rose even sharper and added 14.5 per cent to $1.61, while Bitcoin Cash performed yet even better and increased by 15.8 per cent to $1,022. 

Corporate and world economic news

Economic data

Positive economic data came out of the US today. The business climate in the industrial region of Chicago surprisingly rose in April. According to the University of Michigan’s consumer sentiment survey, consumer confidence across the country also rose in April to its highest level in over a year. And new economic stimulus from the US government boosted household incomes by an unexpectedly strong 21 per cent in March.

Contrary to the US data, weak growth data had been reported from Germany and the eurozone in the afternoon. Due to the third corona wave, the lockdown caused the German economy to shrink unexpectedly in the first quarter. According to the Federal Statistical Office, the gross domestic product fell by 1.7 per cent from January to March compared to the previous quarter. Previously, the economy had grown for two quarters in a row. And in Europe, too, the economy declined, although not as strongly as in Germany. According to the European statistics office Eurostat, in the eurozone, economic output (GDP) fell by 0.6 per cent quarter-on-quarter at the beginning of the year.

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