11 Apr

Buffett is investing in Japanese companies. The US technology sector is under pressure

April 11, 2023

By JustMarkets

The US stock market traded yesterday without a single trend. At the close of trading, Dow Jones Index (US30) increased by 0.30%, S&P 500 (US500) added 0.10%. But NASDAQ Technology Index (US100) was down by 0.03%.

The minutes of the Fed’s March meeting are due on Wednesday and are expected to provide more information on the Central Bank’s plans to raise interest rates in the face of a potential banking crisis. While the collapse of several US banks in March has spurred bets that the Fed will slow the pace of interest rate hikes, markets are now preparing for at least one more increase in May (80% probability).

According to research firm IDC, Apple’s personal computer shipments decreased by 40.5% in the first quarter due to weak demand and high inventory. Rising Treasury yields also hit sentiment towards the technology sector amid a strong March Nonfarm Payrolls report, which indicated that a robust jobs market could prompt the Federal Reserve to tighten monetary policy further.

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

Oil prices declined on Monday after rising for three consecutive weeks as fears of further interest rate hikes, which could curb demand, counterbalanced the prospect of a market tightening due to supply cuts by OPEC+ producers. Technically, in the higher time frames, oil is trading in a price range. It’s a liquidity accumulation. And any accumulation sooner or later ends with an impulse move. Analysts expect oil prices to continue rising ahead of summer.

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Gold prices are trading just below recent highs, remaining relatively resilient as markets await further signals on the US economy from inflation data and the minutes of the Federal Reserve’s March meeting on Wednesday. The yellow metal was supported by demand for a safe haven as investor sentiment remained weak amid fears of slowing economic growth and monetary policy uncertainty.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) increased by 0.42%, China’s FTSE China A50 (CHA50) lost 0.19%, Hong Kong’s Hang Seng (HK50) was not trading, India’s NIFTY 50 (IND50) added 0.14%, and Australia’s S&P/ASX 200 (AU200) was also closed yesterday.

Warren Buffett said he had increased his stake in the top 5 companies in Japan’s Nikkei 225 index. Buffett also stated that he intends to continue investing in Japanese stocks. The Nikkei 225 has outperformed its regional peers this year because the Bank of Japan will keep its soft monetary policy for a longer period.

Chinese consumer inflation rose less than expected in March (+0.7% y/y vs +1.0% y/y expected), while producer price inflation continued to decline (-2.5% y/y) amid weak local consumption and slowing manufacturing activity.

In Australia, consumer confidence rose by 1.3% as the Reserve Bank of Australia (RBA) suspended its rate hike cycle.

S&P 500 (F) (US500) 4,109.11 +4.09 (+0.10%)

Dow Jones (US30)33,586.52 +101.23 (+0.30%)

DAX (DE40) 15,597.89 +77.72 (+0.50%)

FTSE 100 (UK100) 7,741.56 +78.62 (+1.03%)

USD Index 102.55 +0.46 (+0.45%)

Important events for today:
  • – China Consumer Price Index (q/q) at 04:30 (GMT+3);
  • – China Producer Price Index (q/q) at 04:30 (GMT+3);
  • – Eurozone Retail Sales (m/m) at 12:00 (GMT+3);
  • – US EIA Short-Term Energy Outlook at 19:00 (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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