STOCK MARKET REPORT by CEO Silvano Grimaldi of the independent asset management company GRIMALDI & PARTNERS Ltd.

MONTHLY REVIEW

The international stock markets ended the month of APRIL with gains.

DRIVING FACTORS

General inflation has cooled noticeably in the USA.
Manufacturer-level inflation in the US also weakened more than expected in March. Producer prices influence consumer prices.
Investors are now wondering whether the Fed could perhaps pause interest rates in May or only raise interest rates slightly.
Convincing quarterly figures from well-known US (tech) companies have turned out to be convincing.

EQUITIES IN FOCUS

APPLE relies on India, “triple iPhone production”

Apple is accelerating its reduction in Beijing dependency by tripling its iPhone production in New Delhi. According to Bloomberg reports, the American giant is now assembling nearly 7% of its hugely popular smartphone in India as it seeks ways to reduce its exposure to China amid rising geopolitical tensions and the serious problems it faced in late 2022 due to the draconian measures being taken against the Covid that shut down Foxconn factories.

Apple produced more than $7 billion worth of iPhones last fiscal year, tripling its number in India, the world's fastest-growing smartphone market. The growth was possible thanks to the ad hoc expansion of the activities of partners such as Foxconn and Pegatron. This is a significant leap for India, which accounted for only about 1% of the world's iPhones in 2021.

MONTHLY OUTLOOK

“Sell in May and go away” will happen this year? After a good start to the year, the stock rally has weakened. Concerns in the banking sector slowed the recovery in stock markets, while positive earnings numbers from large companies and slowing inflation supported stock prices.

The upcoming summer months are usually characterized by a lull, with major investors withdrawing somewhat due to the holidays. Aside from positive surprises (eg progress in the Ukraine war; a rapid fall in inflation; the absence of a severe economic downturn), the coming months on the stock markets are likely to be characterized by a sideways trend. The trend towards weakness in the stock markets is likely to continue into the autumn. After that, a seasonally stronger period begins for the stock exchanges.

We expect a sideways trend on the equity markets in May.

STOCK RECOMMENDATION: APPLE