China official PMIs for April 2022
• Manufacturing 47.4 vs. expected 48.0, prior 49.5
• Non-manufacturing 41.9 vs. prior 48.4
China Caixin /Markit Manufacturing PMI for April comes in at 46.0
• vs. expected 47.0, prior 48.1
The intensification of the COVID-19 outbreak and the associated lockdowns and restrictions across many centres in the country, most notably in Shanghai and other economic powerhouse regions, weighed on the economy in the month.
The old adage is that stocks don’t bottom on Fridays. Of course, it’s also the final trading day of the month so that could have led to some special selling flows that could reverse on Monday as we begin May.
On the day:
Amazon was down 14% in its worst day since 2006.
On the week:
On the month:
On the year, the Nasdaq is now down 21.2%. With that as a monthly close, it’s a bear market in tech stocks.
Drawdowns in big-cap tech:
The major European indices are closing higher on the day. A snapshot of the provisional closes are showing:
For the trading week, the major indices are down modestly lower with the exception of the UK FTSE 100 :
EPS $1.52
Revenue $97.28bn
The existing share buyback program has been boosted by US$90bn
Tim Apple (OK, actually Tim Cook but I prefer Trump’s name for him):
Amazon reported an unexpected loss of $-7.56 versus an expected gain of $8.36. The Rivianan impact seems to be more than expectations.
The market is optimistic today on the combination of:
I don’t know if any of that is a foundation for a sustained rally but sustained rallies are built on optimism. What I do know is that tomorrow the March US PCE report is out that will offer another read on inflation. One reason that Q1 real GDP was low as that inflation was surprisingly high. Another high reading in tomorrow’s report will put the focus back on prices and the possibility of fast Fed hikes beyond neutral.
Reports earlier in the week highlighted that this was coming, so I don’t think it’s a big market mover but keep an eye on crude oil, which is now at the highs of the week.
The WSJ — citing a source — said that Germany has lifted its objection to a phased-in Russian oil embargo. Before the war, Germany imported 35% of its oil from Russia.
The report highlights issues around refinery supply but notes that Poland is now willing to supply a key refinery via Gdansk. Notably, that refinery is owned by Rosneft.
“Should Rosneft refuse to process non-Russian oil imports, Germany could put the refinery under state management under laws protecting strategic assets,” the report says.
What’s not addressed here is the many other countries in eastern Europe that rely on Russian oil — some of them 100%.
