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LGT Navigator: Twitter takeover and expected tech stock reports boost stock market sentiment

April 26, 2022

The quarterly figures of major US technology companies due in the next few days and the successful billion-euro takeover of Twitter by tech billionaire Elon Musk caused a reversal of the previously negative trend on Wall Street at the start of the week. However, concerns about interest rates, inflation and the economy are likely to continue to determine stock market sentiment and may cause setbacks again and again.

Twitter takeover and expected tech stock reports boost stock market sentiment

In New York, the stock indices turned positive after initial losses on Monday. Investors obviously put their hopes in the expected quarterly reports of the major US tech stocks. Today, Alphabet and Microsoft, among others, present their figures for the first quarter. On Wednesday, Meta (Facebook) follows and on Thursday, Apple, Amazon, or Intel. The acquisition of Twitter by Tesla founder Elon Musk is also a topic of conversation on the stock exchange floor. The management of the short message service gave the green light yesterday for the approximately USD 44 billion offer. The Dow Jones Industrial was still down more than three percent at the start of trading, but then closed with a daily gain of +0.7% at 34'049.46 points. The S&P 500 exited Monday's trading with a gain of +0.57% at 4'296.12 points. On the Nasdaq technology exchange, the indices rose by about +1.3%.

At the center of interest, however, certainly remain the anticipated monetary tightening course of the Federal Reserve, the war in Ukraine and the negative impact of China's Covid-19 policy, respectively, the supply chain problems on the global economy, which have been exacerbated again as a result.

Although the re-election of Macron in France guarantees a certain stability in the political and economic structure of Europe, the relatively close result casts a shadow over the future of the continent's second-largest economy.

German companies more confident again according to Ifo survey

The monthly survey by the Munich-based economic research institute Ifo showed a return to a somewhat more optimistic assessment of the approximately 8'000 German companies surveyed. According to the survey, the highly regarded Ifo business climate indicator improved from 90.8 to 91.8 points in April, while analysts on average had forecast a further decline to 89.0 points. Ifo President Clemens Fuest commented that the German economy was showing resilience after the initial shock over the war in Ukraine and that sentiment had stabilized at a low level.

Record high global arms spending

According to a recent study by the Swedish peace research institute Sipri, based on official government data on defense budgets, global military spending in 2021 – well before Russia's attack on Ukraine – rose above the USD 2 trillion mark for the first time (to USD 2.12 trillion). This also marks the seventh consecutive year that defense spending has increased. The United States spent the most on military equipment, and even the corona pandemic did not seem to buck the trend. According to the report, the US invested USD 801 billion in military defense equipment, particularly military research, and development. China increased investment by almost five percent, spending USD 293 billion on its armed forces in 2021. India, the UK, and Russia follow at some distance behind.

  

Economic Indicators April 26

MEZ Country Indicator Last period
08:00 SZ Trade Banalce (March) CHF +5.95bn
14:30 US Durable Goods Orders (March, m/m) -2.1%
15:00 US S&P/CaseShiller House Prices 20 biggest cities (Feb, y/y) +19.1%
16:00 US Consumer Confidence (Arpil) 107.2
16:00 US New Home Sales (March, m/m) -2.0%

 

Earnings Calender April 26

Country Company Period
SZ UBS Q1 
SZ Novartis Q1 
SZ Kuehne & Nagel Q1 
SZ SIG Combibloc Q1 
SZ Temenos Q1
FR Michelin Q1 
ESP Banco Santander Q1
UK HSBC Q1
US Alphabet Q1
US Microsoft Q1
US 3M Q1
US General Electric Q1
US UPS Q1
US PepsiCo Q1

 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, E-Mail: lgt.navigator@lgt.com
Source: LGT Bank (Switzerland) Ltd.

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