The Week Ahead: April is historical the best month for equities, but money flows suggest clients are cautious

The Week Ahead: April is historical the best month for equities, but money flows suggest clients are cautious

Jessica Amir
Market Strategist

Summary:  April historical brings hope to markets, but clients are playing the defensive game, topping up their bond exposure in case of a recession. Across the entire industry $304 billion has flown in money market bonds over the last three weeks. This weeks economic data could be a catalyst for Q1 market darlings, such as high PE semiconductor stocks, to take a haircut. And why consumer spending stocks will be in focus.

April historical brings hope to markets, but clients are playing the defensive game

After end of quarter and end of financial year in Japan, we’re turning the page to Q2 and a new month. April is historically the best month for equites. It is typically attributed to the excess profits or cash being put to work, that was taken off the table from end of March quarter

In Q1, the Economic Surprise Index hit a new high with data coming out better than expected, with inflation continuing to slow. So, we’ve seen the risk-on trade amplify. The Nasdaq 100 gained about 19% in the first quarter. While in Commodities, the iron ore price rose the most, 10%, outpacing gold, as China’s reopening narrative gained pace with the Chinese government introducing more stimulus. In FX markets, the most talked about trade in Q1 was the Euro against the USD, with stubbornly high EU inflation giving the European Central Bank more room to hike than the Fed.  In terms of the major equity themes; semiconductors have been driving markets higher, and are up 23% YTD. Nvidia shares are up 90% in three months.

The most traded instruments at Saxo in Q1 show clients are being defensive

Reflecting on the most transacted upon instruments by Saxo clients; Tesla has garnered the most buys on the Saxo platform. The EV giant has been selling more EVs than expected, and is coming up with new ways to save cost, such as building a battery plant in the US with China’s battery leader, CATL which can build lithium iron phosphate batteries cheaper, than traditional prior nickel-based batteries. Tesla’s also deploying $22 billion in cash to crank up production.

Reflecting on the most purchased ETFs globally now, across the entire industry, quality ETFs have gained the most flows, with QUAL taking in $7.3 billion of flows in Q1. What’s interesting is, the biggest positions in the QUAL ETFs are with Microsoft, Apple, Nvidia, Meta, and Alphabet. Secondly, with investors hunting for stable returns, $6.1 billion has flowed into the 7-10 year government bond ETF IEF.

Stepping back even further, across the entire money market, amid the bank sector turmoil, we’ve seen large withdrawals of cash from bank deposits, with money instead being channeled into bond markets, with $304 billion flowing into bonds just over the last three weeks, as investor seek better returns for their cash component of their portfolio.

What's on the economic horizon that could move markets; PMIs, jobs, central bank meetings

This week, markets will be tracking
recessionary risk, with the US manufacturing and services PMIs indicators out. Manufacturing will likely to slip further into contraction, while the US services PMI is expected to weaken.

US jobs data will also be a focus. If it shows stronger jobs data, as in the US economy can withstand more Fed hikes, then equities could give back some gains. Specifically, watch indices that are more expensive that the global average, with the MSCI World Index’s PE of 17. So keep an eye on the Nasdaq, given its price to earnings (PE) is 35 times. It could be pressured if eco’ prints are hot. Semiconductor stocks could be more vulnerable of a haircut, as their PEs are quite high and their stocks have made strong gains. For example, Nvidia shares are up 90% this year, and it has a PE of 120 times earnings. AMD’s shares are up 51% YTD, and its PE is 85 times.

Secondly, the RBA and RBNZ  interest rate decisions will be watched. If the RBA is more hawkish and backflips from its dovish tone, then the AUD would whip saw higher. The market has priced in rates will stay at 3.6%, given headline CPI and the Melbourne Institute’s gauge showed CPI also slowed. But most economists expect a hike. For more considerations ahead, read our article.

Company news to be across; that could move the beer brewing and consumer spending sectors. 

Earnings releases are thin, ahead of 
earnings season kick off mid-April. Beer brewers could be an interesting sector to watch, with the third largest brewer, Constellation Brands reporting Thursday. It sells brands such as Corona and Modelo, and its earnings are expected to drop amid household disposable incomes being stressed, while higher marketing and packaging costs are expected to weigh. Its results could impact sentiment in other brewers, such as the global giant, Anheuser-Busch InBev, as well as Kirin Holdings.

Outside of earnings Walmart's investors day will be focus as it might divulge insights into the state of the consumer. Its outlook could also cause waves in consumer spending stocks. Walmart is expected to map out its long-term growth outlook targets, as well as cost-saving initiatives and additional revenue streams, which could boost its earnings per share.


Stay tuned to for daily updates, and inspiration
For a detailed weekly report, tune into our 
Spotlight report.  
For a global look at markets – tune into our 



Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.