The week, which started with a bang, risks ending on a low note. The markets are supported by attempts to reach trade agreements after the tariff threats in April and stock prices are now showing levels before that date or even better: the main factor is that fears of a global recession have subsided. However, investors now need to adjust their positions and intercept what has withstood the storm and who has not. Today the dollar US has resumed its slide against major safe havens, as renewed bets on a tightening of the monetary policy in the United States have pushed down the bond markets. Asian stocks are mixed, with the surprise of a sharper-than-expected contraction in the Japanese economy. European stock markets are seen opening positive. Watch out for the defense sector after all NATO members said they would agree to spend 5% of GDP on defense over the next decade.
US, S&P 500 has more than recovered from April's deep sell-off
Wall Street stocks closed higher yesterday, with Cisco Systems rising on optimistic forecasts, while United health tumbled after news of a criminal investigation into the insurance company. The S&P 500 has more than recovered from a deep April sell-off triggered by U.S. President Donald Trump's global trade war, as investors bet Washington will reach a deal to reduce tariffs. Short selling has risen, indicating investors expect a strong performance ahead, analysts said.
Cisco Systems jumped nearly 5% after the networking company raised its annual forecast, boosted by the boom in artificial intelligence. Instead UnitedHealth Group fell 11% to a 5-year low after the Wall Street Journal reported that the U.S. Department of Justice was conducting a criminal investigation into the company for possible Medicare fraud. UnitedHealth said it had not been informed of the existence of a criminal investigation by federal prosecutors.
Walmart fell 0,5% after the retail giant warned it would start raising prices later this month because of tariffs, even after first-quarter U.S. comparable sales beat expectations. Its rival Amazon also heavily exposed to Trump's tariffs, fell 2,4%, weighing on the Nasdaq.
The S&P 500 rose 0,41% to close at 5.916,93. The Nasdaq fell 0,18% to 19.112,32, while the Dow Jones Industrial Average rose 0,65% to 42.322,75.
The S&P 500 remains about 4% below the all-time high reached on February 19.
“The titles to small cap are once again gaining investor interest. Valuations are historically attractive, offering a compelling entry point for long-term investors,” said Oren Shiran, Portfolio Manager/Analyst, Lazard Systemic Equity.
The officials of the Federal Reserve U.S. central banks believe they need to reconsider key elements of both employment and inflation in their current approach to monetary policy, given the inflation seen in recent years and the possibility that supply shocks and related price increases could become more frequent in the years ahead, Fed Chair Jerome Powell said yesterday.
i go down US Treasury yields: The benchmark 3-year yield fell 4,424 basis points today to 7%, after already falling 8 basis points in the previous session, pulling away from a one-month high. It is still up 2 basis points for the week. Two-year yields also fell 3,947 basis points to 8%, after falling XNUMX basis points overnight. Fed Chair Jerome Powell said yesterday that policymakers believe they need to reconsider key elements of both employment and inflation in their current approach to monetary policy. The dollar down 0,4% against the Japanese yen and 0,3% against the Swiss franc.
Japan's Economy Shrinks. US-India Tariff Agreement
Asia Pacific stocks were mixed today with MSCI's index of shares outside of Japan slipping 0,1% to 613,4 on Friday, but still forecast to rise more than 3% for the week. Goldman Sachs raised its 12-month target for the Asian index to 660, from 620 previously.
The index Tokyo Nikkei is little changed and more or less at the same levels as last week. The yen appreciates for the fourth consecutive day, at 145,3 to the dollar. TheJapanese economy contracted for the first time in a year, showing its vulnerability even before feeling the impact of Trump's tariffs. The yen gained 0,2% on Friday, settling at around 145 per dollar. Bank of Japan official Toyoaki Nakamura will speak later. Japan's GDP ended the first quarter of the year with a 0,7% contraction on an inflation-adjusted annual basis, versus expectations of a -0,3%. The decline was mainly due to trade elements, with consumer spending also offering little support.
The CSI 300 index of the lists of Shanghai and Shenzhen is down 0,6% and the week is about to close with a rise of 1%. In the context of the rapprochement between China and the United States, it emerges tonight that Nvidia wants to build a research center in Shanghai. According to Financial Times, the new hub will focus on the specific demands of Chinese customers and the complex technical requirements needed to meet US government restrictions. The City newspaper reports that Nvidia is renting a new office in Shanghai to house existing employees and hire more. The design and manufacturing brains will remain in the US, as there are legal issues surrounding the transfer of intellectual property to China.
Hang Seng by Hong Kong is down 0,7%, +1,7% for the week. The title Alibaba tumbled 6,8% after the tech giant's quarterly earnings failed to impress investors. Its U.S.-listed shares plunged 7,6% overnight. Quarterly figures showed net income up 62% from a year ago and adjusted gross operating margin improved to 6%, on revenues up 6%. In the fourth quarter alone, revenues rose 7% and attributable profit nearly quadrupled to $1,7 billion. During the earnings call, management anticipated the start of a “aggressive” plan of e-commerce investments: a price war looms with rivals Meituan and JD.COM.
The Kospi index of Alone gains 0,2%, +1,9% for the week. S&P ASX200 Index Sidney +0,5%, +1,3% per week. The stock market Mumbai, is down 0,2%, at these prices the week ends with an increase of 3,6%. Trump he said yesterday that the Indian government has submitted an offer of commercial agreement that would reduce tariffs on U.S. goods. Speaking at a business event in Qatar on Thursday, Trump said India had come forward with a deal “where they’re basically willing to literally pay us no tariffs at all.” The president later changed his tune and did not provide further details on New Delhi’s offer. India was one of the first countries to start trade talks with the United States after Prime Minister Narendra Modi’s visit to the White House in February, with both sides agreeing to finalize the first phase of a bilateral deal by the fall. India’s trade minister is scheduled to meet Trump administration officials in the United States from May 17 to 20 for further negotiations.
I oil prices settled after falling more than 2% overnight on news of a possible U.S.-Iran nuclear deal, but are still up 1% for the week as the global economic outlook improved. U.S. crude futures rebounded 0,1% to $61,71 a barrel, while Brent crude settled at $64,61 a barrel, also up 0,1% on the day. In precious metals,gold fell 0,5% to $3.223 an ounce, after a 2% gain overnight. They have accumulated a 3% decline over the week.
European stocks seen positively. Watch out for defense
European stock markets are seen positively. Eurostoxx 600 futures are moving up 0,3%. At Piazza Affari, the dividend rain on Monday 19 is expected.
Avio/Iveco/Fincantieri/Leonardo: All NATO members will agree to spend 5% of GDP on defense over the next decade by the 2025 summit in June
Team: Moody's upgrades rating from Ba3 to Ba2, outlook from stable to positive, BUY.
Eni has announced that the new share buyback program will be launched in the coming days. The new buyback program, to be completed by the end of April 2026, will involve up to a maximum of 315 million Eni shares (approximately 10% of the share capital) with an outlay of up to a maximum of 1,5 billion euros, as announced in February during the Capital Markets Update.
Stellantis. Rdb raises target to 10,20 euros.
Terna. Morgan Stanley raises target to 8,2 euros. Requests for electrical connections related to the installation of data centers in Italy reached 42 gigawatts at the end of March, said CFO Francesco Beccali.
Unipol closed the first quarter with a net profit of 285 million euros, the solvency ratio of the insurance group was 277% at the end of March. Conference call at 12,00:XNUMX.
Unicredit, Amundi (which has a partnership in the distribution of managed savings) has announced that it intends to proceed by the end of the year with reorganization and cost-cutting measures in Italy, approved by the board of directors of the local subsidiary on May 12.
Pirelli, the shareholder Sinochem has rejected the proposal on governance because it is harmful and unfair. This was stated in a statement by the holding Marco Polo International through which the Chinese shareholders hold 37% of the tire group, confirming the "willingness to collaborate".
Interpump reported a decline in sales, EBITDA and net income in the first quarter, confirming full-year revenue estimates of -5% to +1% on an organic basis.