The Long and Short of it, week ending 21 April 2023
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Major stock-market indexes moved slightly lower last week with investors attempting to divine the market direction amongst mixed economic/earnings reports and Fed rate-hike concerns. Monday’s much better-thanexpected Empire State Manufacturing Index release was countered by Thursday’s unexpectedly sharply weaker Philadelphia Fed Manufacturing Index which in turn was countered by Friday’s S&P Global US Composite PMI release showing much stronger-than-expected manufacturing and services activity throughout the U.S. Initial jobless claims came in higher than expected, adding to concerns of a slowing economy. Earnings reports added to market uncertainty with mixed bank and retailer results. Fed rate-hike concerns and expectations, muddled by the week’s seemingly conflicting data points, added to market uncertainty. For the week, the S&P 500 Index decreased 0.1% to 4,133.52, the Nasdaq Composite Index dropped 0.4% to 12,072.46, the Dow Jones Industrial Average fell 0.2% to 33,809.33, the 10-year U.S. Treasury rate increased 6bps to 3.57% and the U.S. dollar (as measured by the ICE U.S. Dollar index – DXY) strengthened 0.2%.
European stock markets moved higher last week, buoyed by better-than-expected manufacturing and services activity and hopes of increased Chinese demand. Initially unchanged-to-higher on follow through from the previous week’s strong bank earnings reports, both the FTSE 100 and STOXX 600 Indexes continued higher Tuesday on better-than-expected Chinese GDP and consumer spending numbers. Hawkish ECB comments and greaterthan-expected UK wage growth worked to cap gains with growing expectations of central bank rate hikes. Mining stocks, hurt by falling demand expectations resulting from recession concerns, detracted from both indexes while gains in luxury stocks helped STOXX 600 Index performance. For the week, both the STOXX 600 and FTSE 100 Indexes rose 0.5%, the 10-year Gilt rate increased 10bps to 3.76%, the 10-year Bund rate increased 6bp to 2.49%, the British pound strengthened 0.2% and the euro weakened 0.1%, both with respect to the U.S. dollar.
Top performing ETPs over the week
| . | 3x Long ETPs | 3x Short ETPs | ||
|---|---|---|---|---|
| UK | +3x Barclays (3LBC) | +46.2 % | -3x Rio Tinto (3SRI) | +3.2% |
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The Long and Short of it, week ending 21 April 2023
