WEEKLY MARKET REVIEW

Tech Earnings Dominate to Provide Upward Push

Tuesday, May 2, 2023 - By Vincent David-Robin

It was the big tech earnings that dominated the releases last week. Meta (the parent company of Facebook and Instagram) and Microsoft reported earnings that were stronger than analysts’ expectations. That created a strong momentum, pushing the US stock market upwards.

Even weaker earnings by Amazon, especially in the cloud business, did not derail the momentum. Neither did the weaker 1st quarter US GDP number (at +1.1% annualised). Inflation data was a bit softer, but wage pressures remained high.


Global Markets Show Positive Signs

It was a similar story in Europe. At 1.3%, GDP growth was low. Inflation, however, was higher than expected, particularly in France, Spain, and Germany.

Meanwhile in Asia, the new head of the Bank of Japan, Mr. Kazuo Ueda, commented on adjusting the current monetary policy. This gave an upward push to equities.

Overall, US markets were up 1% to 1.5%. Japan was up by close to 2%. Though Europe remained quite flat, it is still near the all-time highs.


Good News for Equities?

Markets seem to suggest that there is no recession. Corporate earnings remain resilient. Especially for larger companies. Going by the numbers: the path is likely to perhaps head towards a moderate slowdown, but not a recession. This would be a near-perfect outcome for equities.

General disclosure: This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Aria Capital Management or any of its related companies to participate in any of the transactions mentioned herein. This material may contain estimates and forward-looking statements, which may include forecasts and do not represent a guarantee of future performance. This information is not intended to be complete or exhaustive and no representations or warranties, either express or implied, are made regarding the accuracy or completeness of the information contained herein. The opinions expressed are subject to change without notice. Reliance upon information in this material is at the sole discretion of the reader. Investing involves risks. Past performance does not guarantee future results. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.
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