US benchmarks end mostly lower in low trading activity

Market Summary

Last week, investors focused on US markets which fell during the shortened week while European stocks increased as concerns regarding a potential banking crisis eased.

In the United States, major benchmarks ended lower. Job openings dropped to 9.9 million in February, causing recession concerns to deepen. Poor economic data led to lower U.S. Treasury yields. In Europe, the STOXX Europe 600 Index in local currency ended with a 0.90% gain as concerns about a banking crisis eased, while other major stock indexes showed mixed results. EU home prices fell 1.5% sequentially in Q4 2022 and Germany's industrial production and manufacturing orders rose 2.0% and 4.8%, respectively, indicating an economic recovery.

In Asia, Japan’s stock markets declined over the week. The 10-year Japanese government bond yield rose to 0.46%, following the increase in global bond yields, while the yen strengthened to JPY 131.3 against the US dollar due to dollar weakness as the Fed may slow its monetary policy tightening. Chinese stocks rose in a holiday-shortened week due to a recovery in services activity and the property market. China's new home sales increased by 55.7% in March, up from 31.9% in February.

Major News

China's military conducts exercises near Taiwan after deploying nine warships and 71 fighter jets in Taiwan Strait.

OPEC+ announced a surprise cut to production by 1.15m bpd to support oil prices and deter speculators.

Eurozone's annual inflation slowed to 6.9% in March, but core inflation rose to a record 5.7%.

Egypt and Syria aim to enhance relations during first official visit by Syrian foreign minister to Cairo in over a decade.

What Caught Our Attention

New data suggests that Africa’s birth rate is falling faster than expected, which could have a significant impact on the continent’s total population by 2100 and provide a boost to its economic development. The UN has reduced its population forecast for Nigeria, Africa's most populous nation, by more than 100 million people for 2060 and over 350 million for 2100. The fertility rate in Nigeria, for example, fell from 5.8 to 4.6 in just five years.

Such declines could bring west Africa closer to the lower fertility rates seen in southern Africa. Although demographers are divided over the data, factors contributing to the fall in fertility rates include increased use of contraception, girls' education, and improved economic prospects.

Source: Kredens Capital, T. Rowe Price, Bloomberg, Financial Times, Wall Street Journal, The Economist, Nikkei Asia