Marketmind: April boomlet mocks recession script
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[April 21, 2023] A
look at the day ahead in U.S. and global markets from Mike Dolan
The signal is still lost in an awful lot of noise.
Just when it looked like signs of a recessionary downturn were finally
emerging in U.S. economic and earnings updates, European business seems
to have picked up considerable steam this month and once again questions
the global picture.
The euro zone economic recovery has unexpectedly gathered pace this
month as the bloc's dominant services industry saw already buoyant
demand rise further to 11-month highs, more than offsetting a deepening
downturn in manufacturing.
While there had been some suggestion that ripples from China's
post-COVID reopening boom would benefit European factories, that's not
where the steam is rising and the surveys show demand in the largely
domestic-facing sectors.
Whether that picture of buoyant services is mirrored stateside later on
Friday remains to be seen, but it contrasts with Thursday's U.S.
soundings on unemployment claims and business readings from the
Philadelphia Federal Reserve.
![](http://archives.lincolndailynews.com/2023/Apr/21/images/ads/current/ldn_sda_KAREN_012823.png)
And it also comes after the mood on Wall St darkened somewhat on
Thursday over incoming first-quarter earnings and the looming government
debt ceiling standoff.
Results from Tesla saw it shares tumble almost 10% after the electric
vehicle giant posted its lowest quarterly gross margin in two years amid
serial price cuts. Along with outsize earnings-day stock losses for AT&T
and Lam Research, U.S. equity benchmarks beat a retreat.
But in a tumultuous week for owner Elon Musk, whose SpaceX venture saw
its next-generation Starship explode minutes after lift-off on Thursday,
Tesla shares rebounded a touch into the weekend after the firm said it
moved to lift U.S. prices for its Model S and X premium vehicles.
With next week's Big Tech earnings reports hoving into view, the overall
U.S. corporate healthcheck remains pretty mixed.
The overall estimated annual profit drop for S&P500 companies is now
expected at 4.7% for the first quarter - a slight improvement on
aggregate estimates at the start of the month, even if more than 5
points down on where it was in January. Estimates for the remaining
quarters of 2023 have been pared back a bit.
![](http://archives.lincolndailynews.com/2023/Apr/21/images/ads/current/charrons_bch_2022.png)
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![](../images/042123PIX/busine97.jpg)
Traders work on the floor of the New
York Stock Exchange (NYSE) in New York City, U.S., March 27, 2023.
REUTERS/Brendan McDermid
![](http://archives.lincolndailynews.com/2023/Apr/21/images/ads/current/graue_lda_preowned_040323.jpg)
Perhaps unsurprisingly, the overall global stock market direction
remains equivocal. Although Asia bourses had initially followed Wall
St's Thursday swoon, European indexes and S&P500 futures were little
changed on Friday.
Even with debt ceiling jitters building in the background, making
for an anxious summer period, U.S. Treasury yields slipped lower on
Friday after Philadelphia Fed chief Patrick Harker said overnight
that the central bank was "pretty close to where we need to be".
Crude oil prices continued their retreat to hit the lowest since
March 12.
The dollar was generally firmer.
In politics, President Joe Biden may announce his re-election
campaign by video as soon as Tuesday - setting the stage for a
possible rematch with his Republican predecessor Donald Trump.
And all NATO allies have agreed that Ukraine will eventually become
a member of the alliance, NATO Secretary-General Jens Stoltenberg
said on Friday.
In banking, Credit Suisse investors who held a total of more than
4.5 billion Swiss francs ($5 billion) of the bank's Additional Tier
1 (AT1) bonds have sued the Swiss banking regulator, challenging the
legality of writing them down.
Events to watch out for on Friday:
* Flash S&P Global business surveys for April from the U.S. and
around the world
![](http://archives.lincolndailynews.com/2023/Apr/21/images/ads/current/culligan_sda_SFARM_2023.png)
* U.S. corporate earnings: Procter & Gamble, HCA Healthcare,
Schlumberger, Regions Financial etc
* U.S. Federal Reserve Board governor Lisa Cook speaks. European
Central Bank Vice President Luis de Guindos and ECB Executive Board
member Frank Elderson speak
(By Mike Dolan; editing by Christina Fincher; mike.dolan@thomsonreuters.com.
Twitter: @reutersMikeD)
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