wall street closes the month of April with heavy losses in its three main indicators and a drop of 13.3% accumulated in the Nasdaq index, which has suffered its worst month since 2008dragged down by sell-offs in the tech sector.
In April, the Dow Jones Industrials lost a cumulative 4.9% and the S&P 500, which represents the largest market in the US and includes many technology companies, fell 8.8%, which is the worst for its part month for both since 1970. Investors on the New York stock exchange have dumped their securities en masse for safer assets in the face of a multitude of concerns, such as rising interest rates and high inflation in the US, the war in Ukraine and the outbreaks of covid-19 in China.
Macroeconomic data has cast a gloomy outlook for global growth, with GDP in the US contracting by 1.4% at an annualized rate in the first quarter of the year, which raises fears of a more serious episode of recession than in 2020. The quarterly results of the most important listed companies in Silicon Valley have also had an influence, which have offered weaker figures than expected and generated a flight from their shareholders, in an apparent puncture after the bonanza associated with the pandemic.
In the monthly computation of the sectors, that of communications has fallen more than 13% and that of technology by 7%, with bleeding figures from companies like Netflix, which has lost 49% in April, or Amazon, 24%. The sectors that have resisted have been essential goods, which rose by an accumulated 6%, real estate, almost 4%, and public services, less than 1%.
“Large price swings in both directions have been the norm all month,” said analyst Randy Frederick of the firm Charles Schwab, who warned that volatility remains high in anticipation of the Fed’s monetary policy decision this week.
At the corporate level, attention has focused on Twitter after the billionaire Elon Musk, founder of Tesla, agreed to his buy for about 44,000 million dollars, for which it has sold part of its shareholding in the electric vehicle company. Twitter has soared 25% on the stock market this month, while Tesla has lost about 20%.
In the public debt market there have been big movements due to expectations that the Fed will raise interest rates in the coming months, with the benchmark 10-year Treasury bond yield increasing by nearly 25%, to brush 2.93%.
As for oil, the Texas barrel has appreciated almost 5% between strong swings due to the effect on demand of the confinements in China and a possible veto by the European Union on Russian oil, which seems increasingly closer.
It has also been important strengthening of the dollar against other currencies such as the euro, against which it has reached a maximum not seen in two years, and the yen, at a maximum of the last two decades.