8th May 2019
Key points
- Global share markets continued their rally in April, reflecting stronger global economic data and US corporate earnings
- Global economic data picked up in April, led by China and the US, while Europe showed signs of improvement, albeit off a low base
- US earnings season quashed fears of an earnings recession. At the time of writing, 390 companies in the S&P 500 had reported earnings, with 293 (75%) of them beating consensus earnings expectations. In aggregate, reported year on year earnings growth is around 1.7%, considerably better than the -5% expected
- Domestically, the NZX50 Index underperformed relative to global share markets as bond yields ground higher, leading to underperformance from some of the more interest rate sensitive sectors such as utilities and real estate. The Australian market fared slightly better with its more cyclical mix of stocks.
Key developments
Global equity markets continued to strengthen in April with the MSCI World index (in local currency) returning 3.8%. Markets were buoyed by the trifecta of a strong US earnings season, signs that Chinese stimulus have had a positive economic impact and, perhaps not unrelated, eurozone growth rates coming in above expectations.