Market Wrap: 21 April 2023

Market Wrap: 21 April 2023

Stocks Struggle Amid Mixed Earnings; Dollar Gains: 

  • US futures, European equities little changed ahead of PMI data
  • Yen outperforms as geopolitical tension spurs haven buying

European stocks and US futures struggled for direction amid mixed corporate earnings and as traders awaited key manufacturing data on both sides of the Atlantic.

The Stoxx Europe 600 index was little changed at the open. Mining stocks lagged as iron ore fell to the lowest since December, with Rio Tinto Plc down more than 3%. SAP AG, Europe’s biggest software company, declined after forecasting profit just slightly ahead of analyst’s estimates. Carmaker Mercedes-Benz AG gained after an earnings beat.

Futures on the S&P 500 and Nasdaq 100 wavered after yesterday’s losses on Wall Street. PMI data from the eurozone and US later Friday will provide more clues on the state of the global economy after unprecedented tightening by monetary authorities to curb inflation.

Treasury yields dipped. The dollar advanced against most of its Group-of-10 peers, with a gauge of its strength set for its first weekly gain in six weeks. The yen outperformed as signs of worsening ties between the US and China spurred traders to buy the haven currency before the weekend. A benchmark of Asian stocks declined.

US President Joe Biden aims to sign an executive order in the coming weeks that will limit investment in key parts of China’s economy by US businesses, people familiar with the internal deliberations said. The move is another measure in the years-long economic campaign against China.

“It’s just the next step in a long line of such restrictions that adds to underlying tension between the US and China, raises the cost of trade, and moves the world further away from peak globalization,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney.

Recurring claims for US unemployment benefits jumped to the highest level since November 2021, adding to signs the labor market is beginning to cool. Sales of previously-owned homes fell in March by more than economists forecast, underscoring a housing market that’s still on shaky footing despite some signs of stabilizing. US mortgage rates rose for the first time since early March.


The data led traders to pare bets on more Federal Reserve rate hikes. The policy-sensitive two-year Treasury yield dropped two basis points to 4.12% after sliding 10 basis points on Thursday.

Fed Bank of Cleveland President Loretta Mester signaled support for another rate hike to quell inflation while flagging the need to watch recent bank stress that may crimp credit and damp the economy. Her Dallas counterpart Lorie Logan said inflation has been “much too high,” while outlining measures to watch.

In other markets, oil extended declines after dropping by the most in more than a month on Thursday, wiping out almost all of the gains stemming from OPEC+’s output cut on signs of a global economic slowdown. Gold dropped below $2,000 an ounce. 



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