02 Apr

Natural gas prices rise amid production cuts. US stock indices under pressure from rising government bond yields

April 2, 2024

By JustMarkets

At the end of the day yesterday, the Dow Jones (US30) index decreased by 0.60%, while the S&P 500 (US500) Index fell 0.20%. The NASDAQ Technology Index (US100) closed positive 0.11%. Stocks on Monday initially found support on the dovish PCE price deflator report for February released last Friday. But the broader market gave up early gains after bond yields jumped on the back of a stronger-than-expected US ISM manufacturing index. The report was hawkish for Fed policy and could delay an expected Fed rate cut. Meanwhile, strong chip maker stocks raised tech stocks on Monday and kept the NASDAQ Index (US100) in positive territory.

Alphabet (GOOGL) closed at a record high (+3%) after agreeing to delete web browsing data collected from users of its Chrome browser to settle a class action lawsuit that alleged the company tracked people without their knowledge.

In Canada, the S&P manufacturing PMI remained relatively stable in March, marking the eleventh consecutive month of contraction in activity in the sector. However, crude oil prices supported the loonie, helped by the prospect of foreign exchange inflows from Canada’s top exports.

Equity markets in Europe did not trade yesterday due to the Easter holiday.

WTI crude oil prices are trading near 5-month highs at 83 dollars per barrel as investors await the joint OPEC+ ministerial meeting this week. OPEC+ has pledged to extend production cuts through June, which could lead to supply cuts during the summer months in the Northern Hemisphere.

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US natural gas prices rose more than 4% on Monday to above $1.8/mmbtu amid continued production declines and forecasts that demand next week will be higher than previously expected. Gas production declined to an average of 100.8 billion cubic feet per day (bcfd) in March, down from 104.8 bcfd in February, as several energy companies, including EQT and Chesapeake Energy, postponed well completions and curtailed other drilling activity.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) was down 1.40%, China’s FTSE China A50 (CHA50) was up 1.54%, Hong Kong’s Hang Seng (HK50) was up 0.91% by Monday’s close, and Australia’s ASX 200 (AU200) was positive 0.99%. Optimism about the Chinese economy is supporting equities after the Caixin Mar China Manufacturing PMI rose by 0.2 to 51.1, the highest level in 13 months, and surpassed the 50.0 mark, which indicates the economy is expanding for the fifth month, the longest streak in more than two years.

Australia’s stock market fell by 0.11% on Tuesday after briefly hitting another record high in the morning session. This was led by a drop in US futures as sentiment on US interest rates may shift to a hawkish path amid a resilient economy. In Australia’s domestic market, job advertisements fell for the second straight month in March, while minutes from the central bank’s meeting last month showed policymakers can neither rule in nor rule out future monetary rate changes as uncertainty in the domestic economy persists. In addition, the politicians noted that concerns about the outlook for steel demand have impacted iron ore prices, reducing the earnings of Australian exporters.

S&P 500 (US500) 5,243.77 −10.58 (−0.20%)

Dow Jones (US30) 39,566.85 −240.52 (−0.60%)

DAX (DE40) 18,492.49 0 (0%)

FTSE 100 (UK100) 7,952.62 0 (0%)

USD Index 104.97 +0.43 (+0.41%)

Important events today:
  • – Australia RBA Monetary Policy Meeting Minutes at 03:30 (GMT+3);
  • – Switzerland Retail Sales (m/m) at 09:30 (GMT+3);
  • – Switzerland Manufacturing PMI (m/m) at 10:30 (GMT+3);
  • – German Manufacturing PMI (m/m) at 10:55 (GMT+3);
  • – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
  • – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
  • – German Consumer Price Index (m/m) at 15:00 (GMT+3);
  • – US JOLTs Job Openings (m/m) at 17:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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