Pope Francis Modernized the Vatican's Investment Program, With Some Caveats

Dow Jones Newswires

By Paul R. La Monica

One legacy of Pope Francis, who died this past Monday at 88, will be financial. The Vatican's investments have been profiting from a renewed focus — led by the pontiff — on social values aligned with the Catholic Church.

In 2023, the Administration of the Patrimony of the Apostolic See, or APSA, made nearly 46 million euros ($52 million) from its investments — EUR37.9 million covered Church expenses, and the rest was profit. APSA invests in international and fixed-income securities, and provides the Church "consulting, financial solutions, and access to capital markets."

Profits rose more than 40% from 2022, when the Church outlined "faith-based measures for Catholic investors," eschewing abortion and birth control, pornography, excessive use of alcohol and other addictive substances, weapons, capital punishment, and mining. Many of the factors of ESG "resonate" with its aims, the Church said.

APSA doesn't list specific holdings, but the Global X S&P 500 Catholic Values exchange-traded fund, which also excludes "companies involved in activities perceived to be inconsistent with Catholic values," resembles an S&P 500 fund: Apple, Microsoft, and Nvidia are top holdings.

In 2022, APSA lost more than EUR6 million on its investments. It noted that 2023 maintained "a proper balance between risk and medium- to long-term profitability." The 2024 report won't be out until summer.

Write to Paul R. La Monica at paul.lamonica@barrons.com

Last Week

Markets

The week began as President Donald Trump again attacked Federal Reserve Chair Jerome Powell, sending the S&P 500 down 2.7%. The dollar sank, and gold, Bitcoin, the yen, and the euro rose. Trump walked back his Powell attacks, and Treasury Secretary Scott Bessent admitted the China-U.S. trade war had to end in "the very near future." Stocks rose on the seeming thaw and talk of Fed rate cuts, then wavered as China denied talks were taking place. On the week, the Dow Jones Industrial Average rose 2.5%, the S&P 4.6%, and the Nasdaq Composite — whew — 6.7%.

Companies

Harvard sued the federal government and is in talks to sell a billion dollars in private-equity stakes. Tesla's quarterly profits fell 71%, and Elon Musk said he would return to the company in May. Bullish signals from the Food and Drug Administration ignited a biotech rally. Intel said it would cut its workforce by over 20%. Swiss-based Roche and Novartis both announced big U.S. investments. The European Union fined Apple $571 million and Meta Platforms $228 million for antitrust violations; Apple accelerated its India iPhone production shift. Boeing reported a lower-than-expected loss, but a China shutdown loomed. Alphabet's profits rose 46%.

Deals

The Financial Times reported Chinese state funds have been pulling out of U.S. private-equity firms...Bank regulators approved Capital One Financial's $35 billion merger with Discover Financial...Bloomberg reported that Rite Aid is looking to liquidate as it nears a second bankruptcy.

Next Week

Tuesday 4/29

We enter the heart of earnings season, with roughly one-third of S&P 500 index companies reporting, the busiest week on the first-quarter earnings calendar. Coca-Cola and Visa announce earnings on Tuesday, followed by Meta Platforms and Microsoft on Wednesday. Amazon.com, Apple, Eli Lilly, and Mastercard release results on Thursday, while Chevron and Exxon Mobil close out the week on Friday.

Wednesday 4/30

The Bureau of Economic Analysis releases the personal consumption expenditures price index for March. Consensus estimate is for a 2.2% year-over-year increase, three-tenths of a percentage point less than in February. The core PCE price index, which strips out volatile food and energy prices, is seen rising 2.6%, compared with 2.8% previously. If the Federal Reserve's favored inflation gauge, the core PCE, comes in as expected, it would be the lowest annual reading since March 2021.

Friday 5/2

The Bureau of Labor Statistics releases the jobs report for April. Economists forecast a 130,000 gain in nonfarm payrolls, after a 228,000 increase in February. The unemployment rate is expected to remain unchanged at 4.2%.

The Numbers

$130 B

The U.S. financial-services trade surplus with the world in 2024, threatened by a global trade war.

3,521%

U.S. tariff on solar panels made in Cambodia, the biggest of the duties on four Southeast Asian nations.

23%

Increase in Chinese auto exports in 2024, or 6.4 million cars, over 50% higher than No. 2 Japan.

3.6 M

U.S. births in 2024, up 1% over 2023, but still below the replacement level of 2.1 births per woman.

Write to Robert Teitelman at bob.teitelman@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

The Stock Market Surged This Week. Why Its Next Move Looks to Be Lower.

Dow Jones Newswires

By Paul R. La Monica

Donnie say "relax."

If the name of the game earlier this month was fear and trepidation, investors seem to have shed some of their nervousness about a global trade war after President Donald Trump said China tariffs would come down. The S&P 500 index rose 4.6%, while the Dow Jones Industrial Average advanced 2.5%, and the Nasdaq Composite gained 6.7%. Long-term bond yields edged lower. And Wall Street's fear gauge, the Cboe Volatility Index, or VIX, no longer shows signs of panic.

Don't be surprised, though, to see the nerves return. While the nursery rhyme tells us that April showers bring May flowers, it's more likely that May sours for Wall Street. "I'm hiding out in bonds even though it's not the sexiest position," says Frank Rybinski, chief macro strategist at Aegon Asset Management.

There are plenty of reasons for investors to be on edge. Earnings targets for 2025 are in flux. Delta Air Lines, CarMax, and Tesla are among the companies that have chosen not t o give guidance for the year due to uncertainty about the global economy as a result of Trump's tariffs.

Rybinski is concerned that the outlook for this year is too high. The consensus forecast for the S&P 500's 2025 earnings per share is about $264. With the S&P 500 hovering around 5525, the market is trading for a little below 21 times those estimates. Rybinski argues that this multiple is too rich and that earnings projections are going to fall because of the impact that tariffs would have on the economy.

"What if there is zero growth or a recession? You could see a contraction in earnings estimates," he says, adding that a multiple of 19 times profit forecasts of about 250 would be "more accurately factoring in risks." That would leave the S&P 500 at 4750 — below its early-April trough.

Some fear that stocks have even more downside. The eventual market bottom will look more like a W than a V, says Bob Shea, chief investment officer at Dynasty Financial Partners. There will be several sharp rebounds and pullbacks as opposed to one big spike higher. He thinks the S&P 500 won't only retest the April lows — it could also hit a new one. Shea says a price/earnings ratio of 18 times for the S&P 500 could make sense as a bear case. "If the U.S. continues on the path of upsetting the world, why should the market have a 20 multiple?" he says.

Shea is also worried about the big pullback in the U.S. dollar this year. It's down 8% against a basket of other major global currencies. That usually doesn't happen during times of global crises, when investors typically flock to the greenback as a haven. "The dollar slide shows a lack of confidence in U.S. policies," he says.

Sure, there are reasons for optimism. A Truth Social post about positive trade negotiations could lead to an epic rally. So would any suggestion that inflation is cooling and the job market is weakening, which may lead the Federal Reserve to cut interest rates again. But there may be too many risks to justify jumping into U.S. stocks at these levels. The outperformance of many international markets could continue.

"With U.S. valuations near extremes, now would appear to be an excellent time to increase non-U.S. exposure," says Roy Leckie, executive director at Walter Scott. "We're not of the view that U.S. exceptionalism is dead. But it's on hold."

So, too, it seems, is the bull case for the U.S. stock market.

Write to Paul R. La Monica at paul.lamonica@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

Risk Warnings and Disclaimers

Add to Favorites

Standard & Poor's Closing Stock Indexes

Dow Jones Newswires

                                  High        Low      Close     Change 
                                  ----        ---      -----     ------ 
  S&P SmallCap 600 Index      1,219.07   1,203.11   1,219.01      -0.34 
  S&P MidCap 400 Index        2,838.16   2,810.52   2,831.67     -12.06 
  S&P 100 Index               2,681.91   2,641.40   2,679.84      29.04 
  S&P 500 Index               5,528.11   5,455.86   5,525.21      40.44 
 
 
Source: FactSet

Risk Warnings and Disclaimers

Add to Favorites

Heard on the Street Recap: Alphabet Spells Gains

Dow Jones Newswires

By Heard Editors

What Happened in Markets Today

Tech led stocks higher. The Nasdaq jumped more than 1% while a strong pickup in tech stocks led the Dow and S&P 500 higher for the day. All major U.S. stock indicies closed the week with solid gains that offset last week's losses.

Trump cools tariff optimism. Another 90-day pause is unlikely, and China needs to offer something "substantial" to land a trade deal with the U.S., according to comments President Trump made to reporters on Air Force One on Friday afternoon.

Consumer sentiment takes a dive. The University of Michigan said Friday its final index of consumer sentiment for April fell 8% from the previous month.

Google keeps up earnings, and AI spending. The internet search giant showed strong profit growth in the first quarter along with record-high capital expenditures-all while pointing to growing usage of its AI tools. Google-parent Alphabet's shares rose nearly 2%, while AI chip giant Nvidia jumped more than 4% by the close.

Intel shows no quick fix in hand. The troubled chip giant's shares slipped nearly 7% after the new CEO's first quarterly call made clear the challenges ahead.

This analysis comes from the Journal's Heard on the Street team. Subscribe to their free daily afternoon newsletter here.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

Risk Warnings and Disclaimers

Add to Favorites

The Dollar Index Rises 0.28% This Week to 96.34Data Talk

Dow Jones Newswires

The WSJ Dollar Index is up 0.27 point or 0.28% this week to 96.34

Largest one-week point and percentage gain since the week ending March 21, 2025
Snaps a three-week losing streak
Today it is up 0.27 point or 0.28%
Up three of the past four trading days
Off 8.38% from its record close of 105.14 hit Tuesday, Sept. 27, 2022
Today's closing value is the seventh lowest this year
Off 7.02% from its 52-week high of 103.61 hit Friday, Jan. 10, 2025
Up 1.08% from its 52-week low of 95.31 hit Friday, Sept. 27, 2024
Down 4.25% from 52 weeks ago
Month-to-date it is down 3.43%
Year-to-date it is down 6.42 points or 6.25%

Data based on 5 p.m. ET values

Source: Tullett Prebon and Dow Jones Market Data

Risk Warnings and Disclaimers

Add to Favorites

S&P/TSX Composite Index Ends the Week 2.14% Higher at 24710.51Data Talk

Dow Jones Newswires

The S&P/TSX Composite Index is up 517.70 points or 2.14% this week to 24710.51

Up for three consecutive weeks
Up 1517.04 points or 6.54% over the last three weeks
Largest three-week point gain since the week ending April 17, 2020
Largest three-week percentage gain since the week ending Nov. 17, 2023
Today it is down 17.02 points or 0.07%
Largest one-day point and percentage decline since Monday, April 21, 2025
Snaps a three-trading-day winning streak
Off 4.25% from its record close of 25808.25 hit Thursday, Jan. 30, 2025
Off 1.43% from the Inauguration Day close of 25067.92 on Monday, Jan 20, 2025
Off 4.25% from its 52-week high of 25808.25 hit Thursday, Jan. 30, 2025
Up 14.84% from its 52-week low of 21516.90 hit Wednesday, June 19, 2024
Rose 12.48% from 52 weeks ago
Off 4.25% from its 2025 closing high of 25808.25 hit Thursday, Jan 30, 2025
Up 9.79% from its 2025 closing low of 22506.90 hit Tuesday, April 8, 2025
Month-to-date it is down 0.83%
Year-to-date it is down 17.43 points or 0.07%

Source: Dow Jones Market Data, FactSet

Risk Warnings and Disclaimers

Add to Favorites

Bovespa Index Ends the Week 3.93% Higher at 134739.28Data Talk

Dow Jones Newswires

The Bovespa Index is up 5089.25 points or 3.93% this week to 134739.28

Largest one-week point gain since the week ending April 14, 2023
Largest one-week percentage gain since the week ending Nov. 3, 2023
Up for three consecutive weeks
Up 7483.28 points or 5.88% over the last three weeks
Largest three-week point and percentage gain since the week ending March 21, 2025
Up six of the past eight weeks
Today it is up 158.85 points or 0.12%
Up for five consecutive trading days
Up 6422.39 points or 5.01% over the last five trading days
Largest five-day point gain since Wednesday, March 19, 2025
Largest five-day percentage gain since Thursday, March 20, 2025
Longest winning streak since Wednesday, March 19, 2025 when the market rose for six straight trading days
Up seven of the past nine trading days
Off 1.90% from its record close of 137343.96 hit Wednesday, Aug. 28, 2024
Highest closing value since Tuesday, Sept. 17, 2024
Off 1.90% from its 52-week high of 137343.96 hit Wednesday, Aug. 28, 2024
Up 13.67% from its 52-week low of 118532.68 hit Friday, Jan. 3, 2025
Rose 6.49% from 52 weeks ago
Up 13.67% from its 2025 closing low of 118532.68 hit Friday, Jan. 3, 2025
Month-to-date it is up 3.44%
Year-to-date it is up 14455.88 points or 12.02%