By using our website, you agree to the use of our cookies.


Monthly summary – April 2023

Strong earnings beat weak regional banks! Following the collapse of Silicon Valley Bank and Credit Suisse in March, market action was dominated by fears of a full-blown bank crisis not seen since 2008. As these fears successively subsided, even though problems remained for some regional banks such as First Republic, investors in April choose to focus more on the earnings reports for the first quarter of 2023.

Subdued expectations  

Going into the earnings season, expectations were subdued with estimates generally having been lowered during the first quarter. However, corporate profits proved to be more resilient than expected and the number of beat ratios (outcomes versus expectations) were high in major regions such as the US and Europe. Additionally, outlooks were not as downbeat as feared. Even though not all companies were rewarded for good results in their share price developments some received high praise, not least some of the mega cap tech companies such as Microsoft.

The overall outcome of results in April contradicted the bearish view that earnings were about to deteriorate sharply in a world of high inflation, increased interest rates, tighter lending standards and geopolitical tensions.

Focus remained on inflation

Apart from earnings, inflation and the response of the central banks to it, were at the center of attention. While inflation numbers still ran high, the incremental changes pointed downwards, and investors were increasingly inclined to look for silver linings (i.e., interest hikes soon to end), especially in the US. Another topic of interest was the looming debt ceiling in the US, where tax receipts were closely followed by analysts in order to determine the time frame by which a solution must be reached.

No improvements to the geopolitical situation

Geopolitically, little was achieved in April to improve the overall situation. The war in Ukraine went on without any major changes, albeit with increased attention on a possible counteroffensive by Ukrainian forces later this spring. A surprise telephone meeting between China’s Xi and Ukraine´s Zelensky (their first since the outbreak of the war) led to some speculation that China would try to broker a deal to put an end to the war.

World index up in April

The world index in April rose and thus followed up on the somewhat surprising gain seen in March, albeit with differences depending on base currencies. Consumer staples and energy were the best performing sectors, while materials and consumer discretionary lagged. Among major markets, Europe outperformed the US, with Hong Kong and Japan trailing behind.



The overall healthcare sector which performed well in April. Growth stocks seemed to be coming back in favor.

Investors reminded about underlying fundamentals

With the start of the earnings season, investors have been reminded about the strong underlying fundamentals, and the fact that many stocks have not done much year to date. Valuations are attractive while recession clouds continue to form over the horizon, likely giving healthcare companies a more solid fundamental outlook in relation to many other industries. Seasonal strength in healthcare should support a positive outlook. However, debt ceiling tensions are mounting in the US and geopolitical issues continue to dominate and could still bring negative surprises. Regional banks in the US seem to have more issues to be resolved. The positives may outweigh overall, but nothing can be taken for granted in an uncertain world.