Lending Association

End of March quarter

MSCI’s index of world stocks rose 7.7% in the three months to March as increasing optimism about US economy offset worries about slower interest rate cuts — overlain by a frenetic FOMO about AI.

MSCI data showed it was the strongest opening quarter for a year for five years and gives markets a kick start for April and the new month and quarter.

The ASX 200 had a solid near 4% gain for the month, according to AMP Chief Economist, Shane Oliver, but Tuesday’s gains will depend on the share price futures trading on Monday as US markets trade and those here are closed.

Wall Street ended the month, the week and the quarter with a small rise and will be looking to continue that this week, even though it faces the usual start-of-month test from important economic data.

Both the Dow and the S&P 500 ended March and the quarter at record levels and big gains.

The S&P 500 surged 10.2% for its best first-quarter gain since 2019, when it rallied 13.1%. The Dow was up 5.6% for its strongest first-quarter performance since 2021, when it jumped 7.4%.

The Nasdaq ended the quarter with a 9.1% gain, though given all the action in stocks like Reddit, Trump Media, Nvidia and more, it seemed like the gain was larger.

For March alone, the S&P 500 rose 3.1% and the Nasdaq added 1.8%, while the Dow climbed 2.1%.

It was the fifth straight winning month for all three major averages.

While so-called Magnificent Seven stocks such as chipmaker Nvidia and Facebook owner Meta Platforms provided the bulk of the gains for the quarter, economically-sensitive sectors such as energy and industrials rallied in the final month and a half of the quarter.

Driving the gains over the quarter and month was Nvidia, 2023’s market champion, as the artificial intelligence craze shows no signs of slowing. The stock soared 82.5% for the quarter and gained 14.2% in March alone.

In contrast, Apple ended the quarter off around 11% and in second place behind Microsoft in the market cap stakes. Microsoft shares rose 12% in the three months and ended with a cap of $US3.13 trillion, well ahead of Apple’s $US2.68 trillion.

Nvidia’s market cap was $US2.26 trillion, which means that the coming quarterly reporting season could see Nvidia sprint to or past Apple’s level, especially with the iPhone giant on the nose for many Wall Street analysts and influencers.

Apple (down 7.6%) and Tesla (down 29.2%) stumbled on weakening demand worries for their core products — and, in the case of Tesla, worries about the performance of founder Elon Musk.

April is a strong month for markets — especially in the US where you have the optimism of winter ending and spring and summer developing and more data on the health of the economy and earnings.

April is also a solid month in Australia, even as we head into winter and the optimism of the half year reports from three of the big four banks — ANZ, NAB and Westpac — with a Commonwealth Bank trading update ahead of its end of year balance on 3 June (and for much of the rest of the ASX 200).

AMP chief economist Shane Oliver wrote over the long weekend, “It’s also worth pointing out that the breadth of US share market gains has spiked (ie, the proportion of the market making new 52-week highs has risen) whereas major share market tops normally see months of falling breadth beforehand.”

The benchmark index finished Thursday’s session up 77.30 points, or 1 per cent, at 7896.90, led by gains in mining (up 1.9 per cent) and real estate investment trusts (up 1.6 per cent).

With financial markets closed on Good Friday, it was the last trading day of the first quarter. The index was up 2.5% for the month and around 3.7% for the year to date.