Apr 23 2024: Global stocks saw an uptick on Tuesday, spurred by a rebound on Wall Street, where investors are eagerly awaiting earnings reports from major U.S. technology companies. Concurrently, the yen reached a new 34-year low against the dollar, prompting concerns from Japanese authorities.
The MSCI All-World index, which recently hit a two-month low, rose by 0.3%, driven by gains in European markets. The FTSE 100 achieved a record high, and the STOXX 600 traded at one-week highs, buoyed by strength in the technology sector.
Optimism was further fueled by positive business activity surveys, indicating growth in Germany and accelerated expansion in the broader eurozone.
Investor attention has shifted from Middle East tensions to earnings performance, contributing to a more positive risk sentiment. However, uncertainties persist, particularly regarding geopolitics and rising U.S. real yields.
Gold is on track for a weekly decline of 3.2%, its largest this year, while oil has eased from last week’s highs.
“We are cautiously optimistic about risk sentiment. While uncertainties remain, including geopolitical issues and rising U.S. real yields, our outlook is more positive compared to a week ago,” stated Mohit Kumar, a strategist at Jefferies.
The dollar has retreated from recent highs but remains supported by investor expectations of no imminent rate cuts from the Federal Reserve and rising Treasury yields.
On Wall Street, big tech stocks outperformed ahead of their quarterly results. Notably, Nvidia gained 4.4%, Amazon.com rose 1.5%, and Alphabet jumped 1.4%, while Tesla dropped 3.4% after announcing price cuts in major markets.
Tuesday’s earnings calendar includes reports from Tesla, PepsiCo, UPS, Lockheed Martin, and Halliburton.
UBS recently downgraded its rating on mega-cap tech companies, expressing concerns about potential profit growth deceleration in the coming quarters.
Key macroeconomic data releases this week include U.S. business activity, quarterly economic growth, and inflation metrics. Traders now anticipate the first Fed rate cut most likely in September, with expectations for a total of 40 basis points of cuts this year, significantly lower than earlier forecasts at the beginning of the year.
