Investors hold tight to their hard-earned kroner in April.
– Yes, April is a significantly quieter month than the first quarter, says Nordnet’s private economist Frida Bratt to News24.
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Rest break in April
After several cheerful months at the beginning of the year, the Stockholm Stock Exchange and several other exchanges around the world seem to have taken a rest break in April.
So far, the Stockholm Stock Exchange has retreated 2 percent during the current month, after having had a real rocket development during the first three months of the year.
– The reasons for the somewhat milder stock market mood are partly that the expectations for the first interest rate cut from the US central bank, the Federal Reserve, Fed, have been moved forward.
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Sullen faces on the stock exchange
The reason is that the stock market likes low interest rates, because it makes the wheels of the economy spin faster.
– And when it is even uncertain whether the Fed will lower the interest rate at all this year, there will be sullen faces.
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War in the Middle East is bad for business
In addition, the war between Israel and Hamas in the Gaza Strip, together with the increasingly serious tone between Israel and its Muslim neighbors, has caused concern. And worry is bad for business.
– To this can also be added the geopolitical concern we are currently seeing in the Middle East. It creates uncertainty.
Usually with ups and downs
Ups and downs are common features of the stock market. You should therefore not let yourself be worried that the stock market takes a breather or even falls during certain periods. Money that you invested should hopefully grow over a couple of years at least. Therefore, a weak April does not have to mean that the rest of the spring will be bad.
– It is not an unusual pattern for the stock market to catch its breath a little after an upswing, and it is important to remember as a private saver.
Swedish workshop companies are doing well
In addition, there are several bright spots. Small saver favorites in the Swedish engineering industry have gone like a train. AB Volvo and ABB are two examples of companies that reported good news in their quarterly reports, and Atlas Copco is another engineering company that made strong progress last Wednesday.
This is in contrast to Handelsbanken, which really crashed on Wednesday, and had its worst day ever as a listed company.
Weak Swedish krona is, oddly enough, a good thing
International demand seems to be kept up by the weak Swedish currency, which has lost value against both the euro and the US dollar. It’s not so fun for the summer vacation fund. Except if you have the holiday fund saved in Swedish workshop shares.
– In Atlas Copco, for example, order intake was clearly better than expected, while maintaining the margins. It thus seems that the worse economic conditions are pared quite well, concludes Frida Bratt.
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