A Rollercoaster Week with Bumper Profits and Creeping Interest Rate Increases
With the US and Eurozone tackling persistent inflation, Apple and Shell are amongst those countering the economic fears with strong profits
US job report fuels fears for the future
The last week has been dominated by talks of the First Republic bail out that happened late the previous week.
Whilst US markets were initially positive, other regional banks saw their stock values fall as the markets sought out the next potential victim.
The regional bank, Pac Western, was amongst the banks hit by falling stock values, after its stock price hit an all time low on Thursday.
A jobs report released mid week showed surprisingly strong signs for the overall economy, with more jobs once again being created.
But whilst it wasn’t as many as analysts had predicted, it calmed markets sufficiently for a rally by the end of the week.
The last twist on the rollercoaster was the announcement by the secretary that the debt levels permitted by the congress need to be raised to avoid a “constitutional crisis”.
In short, it looks like we’re set for a bumpy few weeks but the scaffolding under the markets seems to be looking relatively strong for the future.
European Central Bank is hiking interest rates, yet again
Last week the ECB (European Central Bank) announced that they would be raising interest rates, taking the interest rate level to a total of 3.25%.
The most recent raise was only by 0.25% (from 3%), a drop down from the two times prior which both amounted to 0.5% increases.
Inflation data released last week reveals that inflation is above 7% across the region, but the changes indicate that attempts are being made to claw it back to the desirable 2% level.
Norway and Czechia also reported on their local interest rates, with Norway opting to follow the ECB’s lead and Czechia voting against further interest rate increases.
Apple gets Buffet’s pat on the back and reaches all-time records
Apple profits hit an all-time record hitting $94 billion of sales last week.
With a record month in March, the success can be put down to the sales of the iPhone, particularly in India where they have been propelled to new heights.
The positive news follows a turbulent period within the tech sector, where low profits and a slide in overall stock values has been the overarching picture.
Warren Buffet, CEO of Berkshire Hathaway and widely seen as an investing guru, also revealed that he holds over $1 billion worth of Apple stock.
Publicly stating that Apple simply “do better business”, it’s safe to say that after such a great week, Apple stock was in the green.
Shell’s profits are shining despite lower oil prices
Shell also posted $9.6 billion in profits for the last quarter, following their all time high profit revelation in February.
Oil prices have actually fallen to around $80 per barrel from their highs of $128, which many suspected would impact the oil giant’s earnings.
However their chemical and refined products company divisions supposedly helped keep the books buoyant.
Shell also declared its intentions to launch a share buy back scheme, which should in turn return money to shareholders.