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Astute Market Overview - 4th April 2023



Welcome to the Astute Market Overview of the last week. Broadly, financial markets calmed over the last week, as the passage of time put more ground between the present, and the banking woes of Silicon Valley Bank and Credit Suisse. In fact, markets were well into the green, practically skipping through the week after the bruising last few weeks.

Turning to some stock specific news, Alibaba, the Chinese technology giant, announced a major restructuring of the business into six separate business units. The announcement saw a jump in the share price of Alibaba Group over the week. In recent years, and since its 2020 highs, regulatory crackdowns from the Chinese government have compressed the share price. As one of the largest Chinese companies by market capitalisation, the move to split up the business will allow a streamlined process for each of the 6 business units, allowing closer control and oversight of each.

In the US, the media reported that former president Donald Trump was indicted, essentially, formally accused of a crime; Trump is the first ex-US president to face criminal charges, and is presumed innocent until proven guilty.

We know that Trump is running a 2024 presidential campaign, and criminal charges could tarnish his reputation…or perhaps not, given Trump himself boasted “I could stand in the middle of Fifth Avenue and shoot somebody and I wouldn’t lose any voters”.

Shifting to data, we had US data towards the end of the week, which did little to bother markets.

Weekly jobs data from the US highlights that initial jobless claims came in at 198,000 in the week ending 25th March, which is a slight increase of 7,000 from the previous week. Whilst an increase is a shift in the right direction when it comes to bringing down inflation, the minuteness of the increase shows that the labour market is still hot, despite the Federal Reserve’s best efforts to bring down inflation by increasing interest rates aggressively for more than 12 months. However, we have seen a raft of tech job loss announcements recently, which should feed into the data in coming weeks.

Following the most recent 0.25% interest rate increase 2 weeks ago, the Fed are weighing up every ounce of data that comes in, poised to go any which way at their next interest rate decision. They’re not taking anything for granted.

Next week is a shortened week for some key markets. In China, markets close for Qingming festival, in India the markets close for half a day to celebrate Mahavir Jayanti, and many key markets close at the end of the week to celebrate Good Friday. Enjoy the rest of your week, and have a fantastic Easter weekend, and we’ll see you next time.

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