US share markets retreated inApril posting their worst month since September 2023 affectedby diminishing hopes of rapid us Federal Reserve interest ratecuts this year amid a series of higher than expected USinflation readings ongoing Middle East tensions alsoweighed on risk sentiment expectations for rate cuts, which had been a key driver ofthe Wall Street rally to record highs in the March quarter fadedfollowing signs of US economic.
Strength and sticky inflation usfutures markets are now pricing in just 31 basis points of ratecuts for 2024 compared to more than 150 priced in January inresponse benchmark US 10 year Treasury yields jumped 50basis points to 4.69% in April the biggest monthly gain sinceSeptember 2022 two year yields lifted 42 basis points to 5.084%the highest since November 2023 and the largest monthly increasesince June 2023 investors worried that increasing yieldswill hamper further gains in shares especially whenstocks are relatively expensive.
Compared with corporateearnings rising yields typically cut the added returninvestors receive in exchange for the extra risk of holdingstocks instead of bonds while eroding the present value thatWall Street places on companies future profits the S&P 500 indexfell by 4.2% in April dipping below its March 28th record highafter the US equity benchmark notched five straight months ofgains in April investors were spooked by waves of stagflationafter us data showed inflation surging and economic growthslowing in the March quarter.
Earnings results were also infocus with investors punishing companies that missed analysts'earnings estimates Facebook parent Meta Platforms plunged10% immediately after its disappointing forecast asales Warning from industrial bellwether caterpillarsaw its shares down 7% after its result but mega-captech rivals Google parent Alphabet and Microsoft were up10.2% and 1.8% after both sent a message that spendingon artificial intelligence and cloud computing is payingoff when their results were.
Released Microsoft however, was still down 7.5% for themonth of the 265 companies in the S&P 500 that havereported earnings to date the first quarter 79.2 a beatanalysts' estimates compared with the long run average of 67%according to LSEG data insurer global life was the worstperformer in April down 34.5% following a negative reportfrom fuzzy panda research that the company refuted a bullishfull year profit forecast helped to lift General Electric orGE Aerospace shares by 15.6%.
In April the top performer onthe S&P 500 index the Dow Jones index shed 5% in April itsworth monthly performance since September 2022 weighed down bypoor performance of Intel shares of the chip maker slid 31% after its forecast for secondquarter revenue and profit did not meet estimates the techheavy NASDAQ composite index lost 4.4% Supermicro computerslumped 15% after the AI chip server manufacturer said salesmore than tripled to a record 3.85 billion US in the latestquarter but fell short of Wall.
Street forecasts in Australiathe S&P ASX 200 index lost 3% in April after the benchmarkindex closed March at all time highs Australian consumer priceinflation slowed less than expected in the March quarteras domestic and service cost pressures stayed stubbornlyhigh a disappointing result for policy makers that ledmarkets to abandon hopes for any rate cuts this year all sectorsfinished lower in April except for utilities andmaterials sector stocks, which rose 4.8% and 0.6%respectively power company AGL.
Energy was a strong performerup 13.4% after a class action proceeding related to allegedbreaches of Australia's consumer and Competition Act weredismissed gold producer emerald resources soared 20.8% the topof the ASX 200 index after it found significant mineralisationat its mining projects in West Australia and Cambodiadiversified miner South32 was also a strong performer up 19.7%as it posted record quarterly production from its Hillsidealuminium and South African manganese projects whilereducing its net debt by 154.
Million US in the quarter realestate shares fell from two year highs ending 7.8% lowerpressured by a 44 basis point jump in the 10 year Australian government bond yield to 4.42%higher than expected inflation data supported the view that theReserve Bank of Australia may keep rates higher for longercharter Hall shares tumbled 12.8% consumerdiscretionary sector. Shares shed 5.1% With Starentertainment the biggest drag plunging 29.6% in April thegaming and Casino operator.
Reported lower third quarterrevenue rose about stars casinos licence amid a second inquiryinto its Sydney operations led to broker downgrades of thestock in company news BHP group shares fell 2.8% in April afterits initial $39 billion takeover offer for London listed minerAnglo American was rejected a deal of successor would be thelargest mining takeover globally in 2024 so far and would rankamong the top 10 largest deals ever for the sector Thanksfor listening for further developments on the markets,.
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