Stock exchanges and markets in the first quarter of 2023

The U.S. Nasdaq and Italy's Piazza Affari stock market. Both had double-digit performances in the space of just three months, up more than 14 percent. The Milanese list also managed to outperform the rises of Paris and Frankfurt, which, again in three months, gained between 12 and 13 percent. Much less consistent was the performance of the non-European stock exchanges, with Tokyo's Nikkei 225 index rising about 7 percent between January 1 and March 30, narrowly outpacing the S&P 500 (which brings together the most important companies listed in New York) and having a positive performance of just over 5 percent. Black jersey was the London Stock Exchange, which gained just over 2 percent in three months, also outperformed by Hong Kong (up about 3 percent).

Aside from these geographic differences, however, it can be said without a doubt that the equity asset class was nonetheless profitable in the first quarter, after a 2022 certainly to be forgotten. "Europe outperformed the average of developed markets, with the Euro Stoxx 50 index gaining 13 percent in the quarter," says Corrado Cominotto, head of Active Management, Wealth Management at Banca Generali, "and after suffering the negative effect caused by the war conflict in Ukraine, it has found the most favor with investors in these early months of the year."

From a macroeconomic point of view, the quarter instead saw inflation at still high but under control levels: in the euro area, the consumer price index rose 8.5 percent, compared with 6 percent in the United States.  As for gross domestic product, Cominotto points out that the first quarter saw more solid growth than expected in recent months. The first three months of the year also ended on a positive note for gold (which gained about 9 percent) and for the bond sector, which in Europe gained about 2 percent while in the United States had a positive performance of around 7 percent.

Despite this plus sign balance for the major asset classes, there was certainly no shortage of volatility in the first quarter of the year either. In recent weeks, as is well known to those who have been following the news, the markets have been thrown into turmoil by events in the banking sector, first with the bankruptcy of a number of U.S. regional institutions, and then with the rescue in extremis of Credit Suisse by compatriot Ubs. Before these events, banking stocks were the best performing stocks on the stock market since the beginning of the year, aided by higher rates that boosted lenders' net interest income. Then, after the turmoil of the past few weeks, the banking sector quickly turned into the Cinderella of the stock markets, registering the worst performance among all sectors.

Paying the price for this turbulence were certain categories of bonds and in particular subordinated bonds issued by banks and classified as AT1 (which in the Credit Suisse restructuring saw their value wiped out and were thus penalized even more than stocks)

"Despite this vicissitude, it should be emphasized that the bond asset class, both at the level of government bonds and corporate Investment Grade and High Yield, has had positive absolute returns since the beginning of the year," Cominotto adds, "demonstrating how the yield offered in the bond world is now able to make up for any periods of stress present in the markets."

Thanks to the positive performance of bonds, yields collected today by those who buy bonds in the market decreased: that of the German 10-year Bund fell from 2.6 percent at the beginning of the year to 2.3 percent at the end of March while that of the U.S. Treasury over the same period fell from 3.9 percent to 3.5. In contrast, the spread on Italian government bonds was stable with the 10-year now stable for a few weeks at about 180 basis points.