In April, Wall Street restored the natural order by reclaiming equity market leadership in 2026. One statistic captures the scale of the recent turnaround: the Nasdaq 100 has risen in 16 of the past 19 sessions. Europe's purple patch ended in late February. Since then, the picture has been much less flattering, with the STOXX Europe 600 rising in only 7 of the past 19 sessions. The US market's rocket fuel is artificial intelligence: stocks with direct or indirect exposure to the sector have bounced by more than 20% since the start of the month. But it would be wrong to say they are the only beneficiaries of the rebound. Nine of the ten main sectors have gained ground. The exception is energy, which has digested its hefty gains from the start of the year. With oil where it is, however, investors are unlikely to lose much sleep over the sector.
That is the paradox of this spring: the Middle East crisis appears to be bogging down, tensions are building in some commodities, and yet investors are raising their exposure to AI, seen as a long-term engine of prosperity. I slightly bent the truth in the previous paragraph: Wall Street has regained its lead over Europe, but not over the Asian markets seen as beneficiaries of the investment cycle in computing capacity. Since 1 January, Japan is up 20%, Taiwan 41% and South Korea 57%, versus 8% for the Nasdaq 100 and 2.8% for the STOXX Europe 600.
The final week of April began with investors sitting on their hands. A flood of earnings is due between today and Thursday, including all the stars of US tech, apart from Nvidia, whose financial year is on a different calendar. More traditional companies are also on the docket, namely those generally forced to discuss the impact of higher energy prices on their products and services. Hyperscalers never have to talk about that, at least not for now.
On prices, markets were given an overnight inflation reminder by the Bank of Japan. There was no surprise on Japanese rates, which were left at 0.75%. The debate, however, was far more heated than expected: six policymakers voted to hold, while three called for a rate rise. The split reflects a sharp upward revision to 2026 inflation projections, from 1.9% to 2.8%. Economists described the decision as a "hawkish hold", prompting increased bets on tightening at the next meeting, and pushing the yen lower. For the rest of the world, it is a concrete illustration of the consequences of the closure of the Strait of Hormuz, even though Japan is particularly exposed to Middle Eastern oil.
Elsewhere, Brent crude for June delivery is trading at $109 a barrel. King Charles and Queen Camilla arrived in Washington yesterday for a four-day visit, amid a crisis of confidence between the UK and the US. Charles is due to address Congress on Tuesday. The royal couple were received at the White House by the Trumps. On the Middle East crisis, visible progress remains scarce, although the US said it is discussing Iran's latest proposal, which Donald Trump is reportedly not especially keen on. In the meantime, traffic through the Strait of Hormuz remains down to a trickle, while Vladimir Putin hosted Iran's foreign minister in Moscow, assuring the country that their strategic relationship would continue.
In Asia-Pacific, Japan is down 1.1% after the BoJ decision. Hong Kong has shed 1% and Australia 0.6%, while South Korea remains in good shape, up 0.5%. European futures lack a clear direction.
Today's economic highlights:
Today's agenda includes: the Bank of Japan's interest rate decision and quarterly outlook report in Japan; the unemployment rate in Spain; unemployment benefit claims in France; in the United States, the S&P/Case-Shiller home price index, the Conference Board's consumer confidence, and the API crude oil stock change; finally, ECB President Christine Lagarde's speech in the Euro Area. See the full calendar here.
- GBP / USD: US$1.35
- Gold: US$4,631.82
- Crude Oil (BRENT): US$103.67
- United States 10 years: 4.35%
- BITCOIN: US$77,014.4
In corporate news:
- Bill Ackman's Pershing Square IPO is expected to raise $5 billion, making it one of the largest closed-end fund IPOs in years.
- Shell agreed to acquire ARC Resources for $16.4 billion, expanding its presence in Canada's Montney shale basin.
- Wizz Air announced a 17% increase in its summer schedule and plans to receive 35 new Airbus aircraft in 2026.
- A British court has approved the transfer of Wise’s primary listing to the Nasdaq.
- Novartis reports a decline in earnings for Q1 due to competition from generic drugs.
- Deutsche Börse announces an increase in net income and revenue for the first quarter.
- EON is close to acquiring British supplier Ovo for 600 million GBP.
- The battle over the Swatch Group intensifies after ISS backed an activist shareholder.
- Celestica plunges 8% in after-hours trading following its quarterly results.
- Meta is preparing to cancel its acquisition of Manus following the Chinese ban.
- Starboard Value has taken a stake in software publisher Dynatrace, according to the WSJ.
- Google signs a classified AI contract with the Pentagon, according to The Information.
- The FDA proposes withdrawing an Amgen treatment for a rare autoimmune disease.
- Today’s key earnings reports: Visa, The Coca-Cola Company, T-Mobile US, Corning, Welltower, Booking, S&P Global, Starbucks, Waste Management, United Parcel Service, Mondelez, General Motors, Teradyne, Novartis, BP PLC, Spotify, Atlas Copco, Barclays, NXP Semiconductors, Anglo American, Assa Abloy, Coca-Cola Europacific Partners, Telenor, Boliden, Puig Brands, Securitas…
See more news from UK listed companies here
Analyst Recommendations:
- J Sainsbury Plc: RBC Capital maintains its outperform rating and reduces the target price from GBX 385 to GBX 375.
- Wh Smith Plc: RBC Capital maintains its sector perform recommendation and reduces the target price from GBX 650 to GBX 600.
- Associated British Foods Plc: RBC Capital maintains its underperform recommendation and reduces the target price from GBX 1850 to GBX 1800.
- Greatland Gold: Argonaut Securities Pty Limited maintains its buy recommendation and raises the target price from GBP 8.80 to GBP 8.90.
- Glencore Plc: Morgan Stanley maintains its overweight rating and raises the target price from GBX 570 to GBX 610.
- Whitbread Plc: Barclays maintains its equalweight recommendation and reduces the target price from GBP 26 to GBP 25.
- Watches Of Switzerland Group Plc: UBS maintains its neutral recommendation and raises the target price from GBX 540 to GBX 565.
- Ssp Group Plc: UBS downgrades to neutral from buy and reduces the target price from GBX 245 to GBX 180.
- Auto Trader Group Plc: Morgan Stanley upgrades to market weight from underweight and reduces the target price from GBX 710 to GBX 650.
- Molten Ventures Vct Plc: TD Cowen maintains its buy recommendation and raises the target price from CAD 94 to CAD 104.
- Rentokil Initial Plc: Hedgeye Risk Management maintains its long recommendation.
- Experian Plc: Hedgeye Risk Management downgrades to short from watch list.
- Big Yellow Group Plc: Morgan Stanley downgrades to underweight from market weight and reduces the target price from GBX 1150 to GBX 1000.
- Haleon Plc: Morgan Stanley maintains its overweight recommendation and raises the target price from USD 11.25 to USD 11.85.
- Hammerson Plc: Morgan Stanley upgrades to overweight from market weight with a price target raised from GBX 350 to GBX 400.
- Tesco Plc: Jefferies maintains its hold recommendation and raises the target price from GBX 430 to GBX 460.
- Pagegroup Plc: Jefferies maintains its hold recommendation and reduces the target price from GBX 145 to GBX 125.
- Shell Plc: Gerdes Energy Research LLC upgrades to buy from neutral with a price target raised from USD 108 to USD 109.
