Picture your Future. Save for it by earning 1.5% on a 1-year Term Deposit Account! Learn more.

Notes from the Trading Desk – Franklin Templeton

Franklin Templeton’s Notes from the Trading Desk offers a weekly overview of what our professional traders and analysts are watching in the markets. As part of Templeton Global Equity Group, the European equity desk is manned by a team of professionals based in Edinburgh, Scotland, whose job it is to monitor the markets around the world. Their views are theirs alone and are not intended to be construed as investment advice.

The Digest

The global equity market felt a little rudderless last week as investors digested a glut of US corporate earnings and Fedspeak. In Europe, the hotter-than-expected March UK inflation print was a talking point, as was some mixed Purchasing Managers Index (PMI) data. Overall, indices saw muted moves, but there was a rotation into more defensive sectors, suggesting a more cautious mood amongst some investors. On the week, the MSCI World traded down 0.1%, The Stoxx Europe 600 Index was up 0.4%, while the S&P 500 Index was down 0.1% and the MSCI Asia Pacific Index was down 1.3%.

Week in review


Trading volumes and newsflow picked up in European markets after a very quiet couple of weeks, as US earnings news impacted the market and European earnings started coming through as well. The STOXX Europe 600 Index has had a sharp recovery since the SVB/Credit Suisse situation in mid-March, trading up 6% over the past month. Feedback indicates that this move was something of a “pain trade” higher considering how negative investor sentiment was back in March. It is worth noting the Index is back at levels last seen in January 2022. In addition, Friday’s close was the highest recorded since 12 December 2007 for the EURO STOXX 50, a benchmark of Europe’s largest 50 companies.

The French CAC Index has also been reaching record highs and was up 0.8% last week. Luxury heavyweights have performed well on the China reopening story.

In terms of sector performance, travel and leisure names outperformed last week, with some positive earnings in the space. A decline in crude oil boosted airliner stocks. There was a defensive bias too, with staples and utilities stocks both higher. This is actually a theme we have seen play out throughout the year.

European auto stocks had a torrid week, declining amid some weaker-than-expected earnings and talk of slowing demand in the second half of the year.

Looking at central bank chatter, European Central Bank (ECB) Chief Economist Philip Lane seemed to indicate policymakers are keeping options open. “As of now, two weeks away, I think the baseline is that we should increase interest rates in May but what we do in terms of scale, I’m not going to set a default number.” The market expects a 50 basis-point (bps) rate hike from the ECB at its next meeting.

Looking at macro data, the March UK Consumer Price Index (CPI) data was the main talking point. The year-over-year CPI came in at 10.1% vs. 10.4% prior. This higher-than-expected inflation print now sees the market pricing in a 25-bps rate increase in May and a terminal rate of 4.9% (the current rate is 4.25%).

Bloomberg gave us another example of the everyday impact of inflationary pressures for those who like a full cooked English breakfast. The Bloomberg “Breakfast Index,” which tracks the staples that make up a cooked breakfast, jumped to record highs, up 23% in the last year.

That all said, it is worth noting the market expects inflation to fall sharply in the second half of the year as low energy prices feed into the data.

United States

US equities remained rangebound last week, with the S&P 500 Index essentially unchanged, down 0.1%. During April, the S&P 500 Index has traded in a tight range between 4100 and 4150, the smallest monthly trading range for some time.

In terms of market themes, US corporate earnings dominated last week. Overall, earnings season has seen companies perform well. As we stand now, 88 companies in the S&P 500 have reported first-quarter 2023 earnings. About 75% of companies have beat expectations for earnings per share, and about 63% have beaten sales expectations. However, some market observers highlight that expectations were very low ahead of earnings season, with consensus expectations lower than historical averages.

In the commodity space, the price of West Texas Intermediate crude oil declined about 6% last week, the first weekly drop following four consecutive weeks of gains on excitement over the surprise OPEC production cut faded and recession fears resurfaced. Energy stocks thus declined in tandem.

In terms of sector performance, defensives also outperformed in the United States, with staples stocks and utilities rising. Communication services was the worst performing sector.

There were a large number of Federal Reserve (Fed) speakers last week, with the overall tone sticking with the hawkish narrative. The market currently expects a 25-bps hike at the next Fed policy meeting.

Something to keep on the radar: There is increasing chatter around the United States hitting its debt ceiling in the coming months. The US government is closing in on its US$31.4 trillion debt limit, and an extension requires Congress approval. We have seen these standoffs before, but with an election ahead in 2024 and the Republicans controlling the Senate, the political stakes are high.

Asia Pacific

Last week was difficult in Asia, with most major markets in the red and only Japan in the green.

Hong Kong’s equity market started last week strong, but faded over the rest of the week to end down 1.78%, despite some better-than-expected data out from China.

Mainland Chinese equities traded off over the second half of the week even though China’s first quarter gross domestic product (GDP) came in at a higher-than-expected 4.5%.

US-China tensions remain a focus, as reports suggest US President Joe Biden is looking to sign an order within weeks to ban US investment in Chinese chip/AI/computing companies. As a result, artificial intelligence, semiconductor and telecommunications stocks were weaker on Friday, weighed down by concerns of further sanctions on key parts of the supply chain.

COVID-19 concerns were in focus on Friday after media reported new positive cases for the XBB variant. Anti-COVID drug stocks rallied.

Japan’s market was the outperformer on the week, closing the week up 0.25% as earnings season also started in Asia.

Ahead of this week’s Bank of Japan (BoJ) meeting, focus was on last week’s inflation data. Core CPI remained above the BoJ’s 2% target in March, coming in at 3.2%, adding pressure on the bank under its new Governor Kazuo Ueda to take steps to normalize monetary policy. However, ahead of his first monetary policy meeting on 27/28 of April, BoJ Governor Ueda reiterated the BoJ’s commitment to its easing stance until price stability is achieved. The BoJ is widely expected to make no changes to its yield curve control policy in April, with investors largely focused on the quarterly outlook report due after the monetary policy meeting, which includes inflation forecasts that could be revised upwards.

Japanese PMI data also came out last week and was largely in line with the prior readings. The services sector benefitted from the post-COVID-19 reopening.

The week ahead

Corporate earnings will continue to dominate this week, with tech heavyweights a focus in the United States. Microsoft, Alphabet, Meta and Amazon, all report this week. A large number of European and Asian companies also report earnings this week. In terms of macro data, a number of GDP and CPI data points will be in focus. Thursday’s BoJ meeting will be new governor Ueda’s first at the helm.

There are several upcoming market holidays, with all of Europe excluding Denmark closed on Monday 1 May.

Monday 24 April

  • Germany IFO Expectations
  • US Dallas Fed manufacturing survey

Tuesday 25 April

  • Spain PPI
  • US FHFA home prices
  • US New home sales
  • US earnings: Alphabet and Microsoft

Wednesday 26 April

  • Germany GfK Consumer Confidence
  • France Consumer Confidence
  • US Durable goods
  • Australia CPI
  • US earnings: Meta

Thursday 27 April

  • Eurozone Consumer Confidence
  • US GDP & Jobless claims
  • China Industrial Production
  • Us earnings: Caterpillar, Amazon

Friday 28 April

  • France GDP
  • France CPI & Consumer Spending
  • Spain CPI & GDP
  • Germany GDP
  • Italy GDP
  • Eurozone GDP
  • Germany CPI
  • US Personal income & Core Personal Consumption Expenditures prices
  • Japan Industrial Production and Tokyo CPI
  • BoJ Meeting


Franklin Templeton Key risks & Disclaimers:

What Are the Risks?

All investments involve risks, including the possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested.  Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in an investment portfolio adjust to a rise in interest rates, the value of the portfolio may decline. Investments in foreign securities involve special risks including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity.

Any companies and/or case studies referenced herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton. The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio.

Past performance is not an indicator or guarantee of future performance. There is no assurance that any estimate, forecast or projection will be realised.

This article reflects the analysis and opinions of Franklin Templeton’s European Trading Desk as of 24th April 2023, and may vary from the analysis and opinions of other investment teams, platforms, portfolio managers or strategies at Franklin Templeton. Because market and economic conditions are often subject to rapid change, the analysis and opinions provided may change without notice. An assessment of a particular country, market, region, security, investment or strategy is not intended as an investment recommendation, nor does it constitute investment advice. Statements of fact are from sources considered reliable, but no representation or warranty is made as to their completeness or accuracy. This article does not provide a complete analysis of every material fact regarding any country, region, market, industry or security. Nothing in this document may be relied upon as investment advice or an investment recommendation. The companies named herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton. Data from third-party sources may have been used in the preparation of this material and Franklin Templeton (“FT”) has not independently verified, validated or audited such data. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments, opinions and analyses in the material is at the sole discretion of the user. Products, services and information may not be available in all jurisdictions and are offered by FT affiliates and/or their distributors as local laws and regulations permit. Please consult your own professional adviser for further information on availability of products and services in your jurisdiction.

Issued by Franklin Templeton Investment Management Limited (FTIML) Registered office: Cannon Place, 78 Cannon Street, London EC4N 6HL. FTIML is authorised and regulated by the Financial Conduct Authority.


MeDirect Disclaimers:

This information has been accurately reproduced, as received from Franklin Templeton Investment Management Limited (FTIML). No information has been omitted which would render the reproduced information inaccurate or misleading. This information is being distributed by MeDirect Bank (Malta) plc to its customers. The information contained in this document is for general information purposes only and is not intended to provide legal or other professional advice nor does it commit MeDirect Bank (Malta) plc to any obligation whatsoever. The information available in this document is not intended to be a suggestion, recommendation or solicitation to buy, hold or sell, any securities and is not guaranteed as to accuracy or completeness.

The financial instruments discussed in the document may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in financial instruments or implementing strategies discussed herein.

If you invest in this product you may lose some or all of the money you invest. The value of your investment may go down as well as up. A commission or sales fee may be charged at the time of the initial purchase for an investment. Any income you get from this investment may go down as well as up. This product may be affected by changes in currency exchange rate movements thereby affecting your investment return therefrom. The performance figures quoted refer to the past and past performance is not a guarantee of future performance or a reliable guide to future performance. Any decision to invest in a mutual fund should always be based upon the details contained in the Prospectus and Key Information Document (KID), which may be obtained from MeDirect Bank (Malta) plc.

Join MeDirect today to access the tools you need to put your money to work on your own terms.

Latest news articles

BlackRock - Why we keep leaning into risk
All News

BlackRock Commentary: Why we keep leaning into risk

Investment opportunities are emerging amid a unique macroeconomic backdrop, with U.S. equities leading gains, particularly driven by AI-related companies, and expectations of continued volatility. The focus is on overweight positions in U.S., UK, and Japan stocks, while favoring quality short-term fixed income and private credit investments.

Epic Investment Partners Weekly Article
All News

Epic Investment Partners Views: The Week Ahead

This week’s key events include China’s Third Plenum, the ECB rate decision, US bank earnings, and several significant economic data releases from the US, Eurozone, and UK.. Last week, Fed Chair Powell highlighted progress on inflation but emphasised caution in rate cuts, while China’s economic recovery showed signs of weakness with lower-than-expected inflation and GDP growth.

Experience better Banking

The sooner you start managing your money, your way, using the best-in-class tools, the sooner you’ll see results. 

Sign up and open your account for free, within minutes.



We strive to ensure a streamlined account opening process, via a structured and clear set of requirements and personalised assistance during the initial communication stages. If you are interested in opening a corporate account with MeDirect, please complete an Account Opening Information Questionnaire and send it to corporate@medirect.com.mt.

For a comprehensive list of documentation required to open a corporate account please contact us by email at corporate@medirect.com.mt or by phone on (+356) 2557 4444.