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Stocks on Wall Street rise amid optimism

Note: Due to the 1st of May holiday the next issue will be published on 2nd May

US stocks gained on Tuesday amid a series of first-quarter earnings from major companies like Apple, Amazon, and Microsoft. Media reports that US President Trump might be ready to ease auto tariffs supported the positive tone on capital markets. Meanwhile the global trade conflict has wide effects on companies, such as Adidas, or in politics, as Canada’s election results showed. Since President Donald Trump took office in January, the US stock market has experienced its worst first 100 days of any presidential term since 1974.

  • Date
  • Auteur Alessandro Fezzi, LGT Research Content & Publications
  • Temps de lecture 5 minutes

US banks
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US stocks saw gains on Tuesday as investors processed a wave of quarterly earnings reports. The Dow Jones Industrial Average rose about 0.8% to 40,527.62 points, marking its sixth consecutive day of gains. The S&P 500 increased by 0.6% to 5560.83 points, while the Nasdaq 100 climbed 0.6% to 19,544.95 points. Good sentiment prevailed in the pharmaceutical sector, driven by the 3.2% higher Pfizer shares. Investors were encouraged by the confirmation of this year's outlook, even though first-quarter sales did not meet expectations. In the technology sector, the picture among the seven major tech giants was mixed.

According to the Wall Street Journal US President Donald Trump is set to ease tariffs on automakers. The move includes blocking additional duties on foreign-made cars and relaxing tariffs on imported parts used in US manufacturing.

Today’s focus will be on the first reading of the US first quarter’s gross domestic product, which is expected to show an annualised growth rate of 0.4%, adjusted for seasonality and inflation. Several banks on Wall Street are already trimming back their GDP estimates, anticipating negative growth.

US stock market suffers worst "presidential start" in 50 years

The US stock market has experienced its worst first 100 days of any presidential term since 1974, with the S&P 500 down 7.3% since President Donald Trump took office in January. Despite a recent rally, the market has been plagued by volatility and uncertainty due to Trump's tariff policies. The Dow and Nasdaq have also seen significant declines, while US Treasuries and the US dollar have lost their traditional safe-haven appeal. Investors are increasingly looking to international markets, which have outperformed US assets this year.

Impact of trade conflict - Adidas to raise US prices 

The German sportswear giant announced that it will increase prices on all its US products due to tariffs imposed by President Trump. Adidas cited uncertainty over tariff rates from key suppliers in China, Vietnam, and Cambodia. Despite a 155% rise in first-quarter net income to EUR 436 million, Adidas is unable to raise its full-year outlook due to the ongoing trade disputes. The company highlighted that higher tariffs would lead to increased costs, impacting consumer demand.

Carney wins Canada election amid US tensions

Canadian Prime Minister Mark Carney declared victory in federal elections early Tuesday, vowing that Canada would "never" yield to US President Donald Trump’s provocations and tariffs. Carney's Liberal Party secured a fourth consecutive term, though it is unclear if they achieved a majority. Carney, a former central banker, has positioned himself as a defender against Trump’s threats, promising to reduce reliance on the US and strengthen ties with other allies.

Asia-Pacific markets trade mixed on Wednesday

Equity markets in Asia experienced mixed performance on Wednesday as investors analysed key regional economic data. Japan's Nikkei 225 rose 0.2% and the Topix increased by 0.5%, while South Korea's Kospi and Kosdaq fell by 0.2% and 0.3%, respectively. Australia’s S&P/ASX 200 traded 0.3% higher, and China's CSI 300 remained unchanged after a significant decline in manufacturing activity for April. Additionally, Australia's first-quarter inflation rose 2.4% year-on-year, exceeding expectations, while China's manufacturing PMI dropped to 49.0, indicating contraction.

Corporate news in focus: Quarterly earnings from Adyen, Airbus, Caterpillar, Deutsche Post, Iberdrola, KLA, Mercedes Benz, Meta Platforms, Microsoft, Qualcomm, Santander, UBS.

Economic data in focus: French GDP (08:00), German GDP and retail sales (08:00), Swiss KOF Economic Barometer (09:00), German unemployment rate (09:55), Italy GDP (10:00), eurozone GDP (11:00), Italy consumer prices (11:00), Germany consumer prices (Bundeslaender, 14:00), US ADP National Employment Report (14:15), US GDP and personal spending (14:30), Canada GDP (14:30), US Chicago PMI (15:45), US pending home sales (16:00). 
 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.