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Please see below article received from Brooks Macdonald this morning, which provides a global market update as tensions appear to settle in the Middle East.

What has happened

Monday saw a modest recovery in markets in aggregate – it was enough for US equities to end their back-to-back run of 6 daily declines in a row, with the US S&P 500 equity index ending the day up +0.87%. With hopes that Middle East tensions were easing back a little for now at least, oil prices edged lower with Brent crude dropping back -0.33% to US$87 a barrel, its lowest level so far this month. Bucking the improved sentiment however are Chinese stocks, with both China’s CSI and Shanghai Composite equity indices trading lower currently. In bond markets, government 10-year bond yields edged lower (bond prices rose) in both the US and Europe on Monday.

Japan’s flash PMIs land

Today sees the latest preliminary, so-called ‘flash’ Purchasing Manager Index (PMI) surveys land for the month of April for a number of countries globally, across Asia Pacific, Europe, and the US. Over in Japan, manufacturing and service activity improved in April to its highest levels in nearly a year, with the April flash manufacturing PMI up to 49.9 (from 48.2 in March), and just below the 50 mark which marks the dividing line between month-on-month (MoM) contraction versus expansion in activity levels. Meanwhile, Japan services PMI rose MoM, to 54.6 in April (up from 54.1 in March), so the economy is still being services-led relative to manufacturing currently, a not-unfamiliar theme in other developed economies around the world.

Middle East tensions ease a little

Middle East tensions appear to have continued to ease so far this week. Yesterday, Iran’s foreign ministry spokesman said that Israel had received the “necessary response at this stage”. This proved enough for oil prices to drop, as well as a pull back in the gold price which fell -2.59% on the day and which is down again this morning at the time of writing.

What does Brooks Macdonald think

US megacap technology stocks narrowly led the market yesterday, but it was a mixed affair with Tesla weaker. All eyes now turn to the 4 of the so-called ‘Magnificent 7’ which report this week, starting with Tesla due after the US close later today.

Please check in again with us soon for further relevant content and market news.