April was, on the whole, a positive month for global stock markets. All major stock markets gained over the month, with the notable exception of China. The thawing of Chinese-American trade relations and the expectation of a recovery of growth in China has meant that global markets saw a largely buoyant month overall.
Despite the political turmoil at the beginning of the month, there was plenty of good news. The EU agreed to a flexible Brexit extension until 31st October, taking some of the pressure off firms who would be hit hard by a ‘no deal’ scenario. The manufacturing PMI jumped to 55.1, its highest reading in a year and Britain’s labour market remained in fine form, with unemployment staying at 3.9% and basic wages rising 3.4% year on year. The FTSE rose by a buoyant 2%, up at 7,418.
The continental markets enjoyed a strong month. However, there were some worrying signs for the French and German economies. French President Macron finally agreed to cut taxes following the Yellow Jacket protest which have caused widespread disruption across the country. Worryingly, French public debt is soaring – the country is on course to overtake Italy as the world’s fourth most indebted country.
The news was also concerning in France’s eastern neighbour. Germany’s growth forecast has been slashed to 0.5% and the country’s usually robust car industry looks like it could suffer over the coming years. Worrying news indeed for Europe’s strongest economy.
These dark clouds on the horizon did little to hinder the countries’ stock markets. The German DAX was up 7% in April to end at 12,344 and the French stock market was up 4% to 5,586.
The first two months of the year showed some worrying signs in the American economy, prompting many to fear a coming recession as the government shutdown and cold weather hit economic data. However, the March labour report helped to calm these fears somewhat. 196,000 jobs were added in March and year on year wage growth stands at 3.3%. On Wall Street, the Dow Jones index enjoyed a healthy month, rising by 3% to close the month at 26,593.
The Far East
After being hit hard by heightening trade tensions with America, the Chinese economy appears to be en route to recovery. Official manufacturing figures indicated a boost in activity and overall production rose from 5.3% to 8.5% in March, compared to a year previously. The Chinese economy grew by 6.4% in the first three months of the year, slightly higher than predictions.
As we previously mentioned, China’s Shanghai Composite Index didn’t gain over the month, and dropped 13 points back to 3,078. The other major Far Eastern stock markets enjoyed a strong month. The market in South Korea was up 3% to 2,204 and the Hong Kong index rose 2% to 29,699.
Whatever you’re doing in May, we hope you have a pleasant month and enjoy the (hopefully!) warmer weather. If you have any questions about the latest stock market news, please get in touch.