The markets put a decidedly difficult April on file. Leading the downturns were technology con Nasdaq even dropped 13%, the worst month since October 2008 under the blows of the expectations of a much more aggressive Fed in raising rates. The disappointing quarterly reports of giants such as Amazon and Netflix were added to fears on the central bank front. On Friday, the Nasdaq fell by more than 4% thanks primarily to the collapse of 14% of Amazon. Apple is also bad with -3.66%. The tech index is on its lows since the end of 2020. “What worries operators is above all the performance of technological stocks after the quarterly ones. Amazon, for example, left 14.05% on the ground on Friday Netflix closed the month of April with a -49.18% (-68.4% from the beginning of the year) ”, he recalls Pietro Di Lorenzo, professional trader and founder of SOS Trader. The Nasdaq index marks -21.16% since the beginning of the year, returning to its lows since December 2020 under the important support in the 12,500 area. “Failure to immediately recover from this level could open the field to a reversal of the primary trend”, asserts Di Lorenzo.
In addition to central banks, the markets are affected by fears of a sharp slowdown in global economic growth triggered by the increase in energy and raw material prices, by the Russia-Ukraine conflict and as new lockdown in Cina.
Best and worst YTD
Looking at the Milan Stock Exchange, the Ftse Mib closed the month of April down by just over 3%, bringing the negative streak with a -11.32% YTD to four consecutive months, containing the drops compared to Wall Street (-13.8% the S&P 500 and -21% the Nasdaq). The best Blue Chips in the first quarter are Tenaris (+ 60.8%), Leonardo (+ 55.94%), Atlantia (+ 30.79%), Banco BPM (+ 14.66%) and Eni (+9, 57%). The worst ones are Saipem (-41.36%), Interpump (-39.83%), Telecom Italia (-35.95%), Unicredit (-34.25%) and Nexi (-32.65%).
What to expect from May
What to expect from now on? May is historically a bad month for the markets. Also this time it will be “sell in may and go away” or will the negativity of recent months lead investors to start repositioning themselves in equities? The basic scenario traced by Equita is that the Russia-Ukraine conflict will slow global economic growth in the short term and will keep inflation at high levels for several months, but if limited in time it will not be such as to compromise the expansive economic cycle. “We are assuming that a recession will be avoided, even if the risk profile is continuing to increase, especially for the EU given the greater dependence of the area on inflationary pressures”, asserts Equita, which sees the markets have already suffered a decisive economic slowdown. , with an already decidedly prudent positioning. The Milanese sim believes that equities remain preferable to bonds, and represent the best long-term protection from inflation. Equita maintains a constructive view on equity, although it will be necessary to monitor the consistency of these assumptions with the evolution of the geopolitical and economic scenario.