Markets last week 26/04/2022

United States

The major U.S. equity indices finished the week in negative territory. The Russell 1000 Growth Index stocks reported losses alongside the large-cap S&P 500 Index and the S&P SmallCap 600 Index. The communications services sector withdrew the most from the S&P 500, with Netflix‘s stock dropping more than 35% this week after the firm released poor quarterly data, contributed by a reduction in global subscriber counts. Only the consumer staples industry grew. 

The Composite PMI Output Index, which measures business activity in the manufacturing and service sectors, indicated that growth slowed in April but remained resilient. The closely monitored economic indicator dropped to 55.1 from 57.7 in March. (An increase in business activity is indicated by a PMI number above 50.). In April, the indicator was 54.7, further suggesting a slowdown despite continuous orders for manufacturing and services remaining strong as covid restrictions have been loosening. However, the services and manufacturing sectors are still dealing with rising costs of labour and inputs, which has had a massive impact on output within the economy. 

The federal reserve policymakers have emphasised that to curb inflation, the central bank should bring interest rates to a level that does not limit but rather stimulates economic growth. Mr. James Bullard indicated that a 75-basis point interest rate hike could be debatable and suggested the economy should expand this year and in 2023. 

The federal reserve chairman Jerome Powell stated that a 50-basis point increase may be realised in May, at an event hosted by the International Monetary Fund (IMF). He also disputed fears of pushing the economy into a recession due to the federal reserve hiking cycle as he cited a historically strong labour market. 


Europe’s stocks sank as concerns over the Ukraine conflict grew, as did central bank policymakers’ hawkishness. The pan-European STOXX Europe 600 Index finished 1.42 per cent lower as the major market indices were in a state of flux. The DAX Index in Germany and the CAC 40 Index in France were both unchanged, but the FTSE MIB Index in Italy fell 2.34 per cent.  

The European central bank Christine Lagarde stated that the asset purchasing program would cease in the third quarter and various results would help determine how interest rates would be adjusted. However, Bundesbank Governor Joachim Nagel and Latvia’s central bank Governor Martins Kazaks stood firm for an early end to stimulus in July and proposed increasing interest rates. 

According to purchasing managers ‘ survey, the eurozone PMI also increased unexpectedly during April due to quicker growth in the service sector as restrictions eased. The S&P Global Flash Eurozone PMI Composite Output Index increased to 55.8 in April, up from 54.9 in March, surprising analyst predictions of a decline as persistent supply restrictions, rising prices, and disruptions associated with Russia’s Ukraine invasion, manufacturing activity appeared to be on the verge of stopping. 

The most recent economic figures in the U.K. confirmed a picture of faltering economic development. In April, business activity grew at its slowest pace in three months, as record price pressures and the Ukraine conflict slowed service sector orders. The S&P Global Flash UK PMI Composite Output Index fell from 60.9 in March to 57.6 in April. According to the U.K. Office for National Statistics, retail sales volumes decreased by 1.4 per cent in March from February, which was worse than projected. Consumer confidence fell in April, according to market research firm GfK, to its lowest. 


With the yen lingering near a two-decade low versus the dollar, Bank of Japan Governor Haruhiko Kuroda stressed that the negative effects of a weak currency, such as increased difficulties in company planning, must be considered. The yen concluded the week at roughly JPY 128.49 against the U.S. dollar, down from JPY 126.44 the week before. To defend the upper limit of its interest rate target range, the Bank of Japan (BoJ) purchased Japanese government bonds (JGBs) and announced further bond-buying plans. As a result, the yield on the 10-year JGB remained relatively steady over time, at 0.24 per cent. Japan‘s stock markets rose modestly over the week and the core CPI was up 0.8%, which was the key factor in the BOJ’s continuous pursuit of its loose monetary policy. 

 Governor Kuroda of the Bank of Japan gave his latest evaluation of the yen’s recent swings, calling them “very severe” and implying that they could harm enterprises’ business plans. He, however, reaffirmed that a weak Yen supports the economy in the long run by increasing the value of companies’ foreign revenues. Kuroda also underlined the Bank of Japan’s commitment to its extensive stimulus program, which is aimed at bolstering the economy’s still-fragile recovery. 

Finance Minister Shunichi Suzuki met with U.S. Treasury Secretary Janet Yellen to discuss recent currency changes. The two agreed that the current Group of Seven (G-7) foreign exchange arrangements should be maintained. These state that foreign exchange changes should be dictated by the market, even though excessive movements might be harmful. 

On the other hand, the private sector in Japan showed signs of picking up as the coronavirus situation has eased. Private consumption, alongside an increase in business investment momentum and industrial production, has played a large role in its contribution. 

PMI (Purchasing Manager’s Index) data also showed an increase in service sector activity and a rise in production levels in manufacturing. However, cost increases were passed to clients at a higher rate, as business confidence eased due to concerns in Ukraine, China Supply chain disruptions due to lockdowns had an impact on sentiments. 


After officials warned stringent restrictions would remain in place, Chinese markets fell as investors fretted about the economic consequences of the coronavirus lockdowns. According to Bloomberg, the CSI 300 Index, which monitors Shanghai and Shenzhen’s largest publicly traded companies, lost 4.2 per cent this week, its worst five-day performance since mid-March. The 10-year Chinese government bond yield rose to 2.88% from 2.82% a week ago, while the yuan struck a seven-month low of 6.47 against the U.S. dollar, down 1.8% for the week. 

After a heavy selloff of Chinese stocks between March and April, reports state that almost 7.1USD billion were sold, citing the largest outflow in nearly 2years. This has raised concerns with the China securities regulatory commission calling upon the national social security Fund and banks to boost investments within the economy. 

The People’s Bank of China (PBOC) maintained interest rates at 3.70 per cent for one-year loans and 4.60 per cent for five-year loans. Economists had expected the central bank to modestly lower both rates, which serve as China’s de facto benchmark lending costs. Governor Yi Gang of the People’s Bank of China promised to keep policy accommodating to help China’s weakening economy, raising anticipation for more easy measures. 

Stronger-than-expected economic growth 

China’s economy grew at a stronger-than-expected 4.8% pace in the year’s first quarter from a year ago, up from 4.0% in last year’s fourth quarter, the economy expanded 1.3% in the first three months of the year, slowing from the previous quarter’s 1.6% increase. The IMF cut China’s 2022 growth forecast to 4.4% from 4.8% in its latest outlook, the second downgrade for the country in three months. The IMF also warned that China’s economy could slow more than currently projected and have supply chain consequences for Asia and beyond. 


Indices for this week 


Weekly Index 

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YTD Index 

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Local Currency 

Sterling Pound 

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Nikkei 225 Index 





Hang Seng Index 





MSCI Emerging Markets Index 






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