MILANO – April is the cruelest month of the year. At least for the Nasdaqwho accused the worst monthly decline since 2008. Not that the other indicators have done well in this second month of war fought between Russia and Ukraine. But the Nasdaq fared worse: the drop was 13.3% compared to the close of March, against the minus 8.8% of the Standard & Poor’s and minus 4.9% of the Dow Jones (Piazza Affari, for example, lost 6%).
On the surface, it emphasizes the Financial Times, unlike in 2008, there are no financial crises or shocks that would justify such a slip. But at the same time the reasons are not lacking. Chief among them is the “hawk” approach of Fed in contrasting with the rise in interest rates inflationary pressures (now at 8.5% in the States). Higher rates are the main enemy of so-called businesses growth, at high prospective growth rates, which discount future revenue streams with interest rates (and which need a lot of capital to invest in order to grow).
And this is the reason why analysts are very cautious: unlike the other slip, in march 2020 (when the Covid epidemic exploded) this time there is the risk of not being a prompt and lively recovery, because the Fed will not stop in its fight against inflation until it has tamed it (with blows of rate hikes).
The second disturbing factor in the American technological list was the re-emergence of the lockdown in Cina, for Covid infections. A factor that aggravated the bottlenecks in supplies, which had never been completely overcome: a few days ago, for example, the Apple said the closures of Chinese cities will result in a loss of 8 billion.
The last factor – and from a human point of view the most dramatic – is the outbreak of the Russian-Ukrainian conflict. Which, for example, has led to companies from various sectors, including Snapchat, to report the negative impacts on their business. Another effect? The technology fund Ark Innovation fundamong the best known in the sector, recorded a 26% decline in the month, in a portfolio that has Zoom (-82% from the highs) Roku (-80%) and Coinbase (-67%).
In short, the prospects are not necessarily positive. Also because the large US technology companies report the first difficulties, especially after the very strong results of the previous period. Amazonfor example, just reported the first quarter in the red after 2015, Robinhood recorded a 43% decline in turnover, Apple he spoke of supply difficulties (the quarterly report went well, but the outlook is more cautious) while Google disappointed in earnings, below expectations and Netflix for the first time it marked a decline in subscribers (with a relative collapse on the stock market).