War in Ukraine, tensions over inflation, wave of covid-19 in China. April was not an easy month for the financial markets. May, which will open with the expected increase in US rates, promises even more demanding challenges, both on the EU inflation front, under the pressure of Russian blackmail on gas and the oil embargo, and on that of the zero Covid strategy in China, which is putting a strain on the production and logistics chains of what remains of globalisation. In short, once again the saying "sell in may and go away" seems wise. But, as we know, nothing is taken for granted in matters of markets.
At this point, it's worth doing an initial budget between winners (few) and losers (more numerous) in the first month of the second quarter of 2022, in which, in any case, there was no shortage of positive notes, to console the optimists.
Turbulent April on the Stock Exchange, bonds down
However, it was a horrible month for the money markets, even more than 2020, the year of the outbreak of the pandemic. At the time, one could protect oneself from the turbulence by buying medium/long-term bonds with a view to a sharp reduction in interest rates, an obligatory choice of central banks to revive the economy completely paralyzed by the lockdowns. That year, for example, the 7-year US Treasury Note and the XNUMX-year Italian BTP gained a total of about +XNUMX%.
The script this time is completely different. Thanks to the errors of assessment by the Fed and other central banks (thesis of the Economist), the bonds suffered a sharp increase in yields in the face of the expectation of an increase in inflation. Hence a double-digit drop in medium/long-term bonds. On the 2,7-year maturity we recorded a monthly drop of -5,5% for the Treasury Note, a loss of -7,5% for the XNUMX-year BTP (fifth month down), -XNUMX% for the German Bund.
April the Stock Exchange, the worst month of the Fang
The prospect of rising interest rates had a strong impact on the performance of tech stocks. The FANG Plus index, which brings together the ten largest names in the technology sector listed on Wall Street, is about to close the month of April with a temporary loss of around -16,40% or even worse, given the negative response in after Thursday's Stock Exchange to Amazon's results. The markets have revised their quotations in the light of a higher cost of money and a lower growth rate. In this regard, the collapse of Netflix (and Amazon) at the first sign of a slowdown in growth is exemplary.
Accounts in gray for all exchanges
However, it did not go well for the stock exchanges in general. Virtually all of them went down, some more, some less. The MSCI World index dropped -6,3%, the Emerging Markets index -7,7%. If we want to find a note of optimism for those investing from Europe, we point out the +1% of the Dow Jones, the +0,5% of the London FTSE100, the +3,5% of the Mumbai Sensex index (results expressed in EUR). Our FTSEMIB lost -3,80%.
Superstar dollar, make money against everyone
The dollar gets the Oscar of the month. The US currency, supported by the prospect of the next rate hike, gained against everyone, from the euro to its lowest level in six years up to the yen, which even slipped to the levels of twenty years ago. Not even the slowdown in GDP in the first quarter has slowed down the race, favored by American independence with respect to energy.
Gold's revenge (thanks to the euro), flat oil
Fourth month in a row gain for the Bloomberg commodity index. But with notable differences.
Il Brent oil presents an almost flat monthly balance sheet, after 4 months of impressive rise.
THEgold -1,6% in dollars, it becomes positive +3,5% in Euros if the exchange effect is taken into account.
At high voltage the somersaults of natural gas: -20% for European gas (which only corrected part of the spectacular previous gain), +22% for US gas. Probably the prospect of a constant and growing flow of exports from the USA to Europe over time has helped to close the gap.
