InvestMacro

By JustMarkets

At Wednesday’s close, the Dow Jones Industrial Average (US30) was down 0.11%, while the S&P 500 Index (US500) was up 0.02%. The NASDAQ Technology Index (US100) closed positive 0.10%. The US stock indices traded mixed, with the S&P 500 (US500) and NASDAQ (US100) hitting weekly highs. Strengthening technology stocks provided support for the overall market. However, the broader market’s gains were limited as rising bond yields pressured equities. On the positive side, shares of Tesla (TSLA) rose more than 12% despite weaker-than-expected first-quarter earnings per share after the company said it would accelerate the launch of less expensive models as early as this year. Also on Wednesday, semiconductor stocks rose after Texas Instruments (TXM) reported better-than-expected first-quarter earnings and projected second-quarter profit above consensus.

On Wednesday, chip developer Qualcomm (QCOM) announced its latest chips designed to run Windows software on laptops. Qualcomm is thus entering the AI race and potentially competing with software developers such as Intel (INTC) and AMD (AMD). It introduced the Arm (ARM)-based Snapdragon X Plus chip for Windows laptops, having previously announced the more powerful Snapdragon X Elite chips for Windows. These chips will be available in mid-2024 and are designed to consider the latest lineup of chips from rival Intel’s Core Ultra and Apple’s (AAPL) M3.

Meta (META) achieved record first-quarter sales, showing strong growth in its advertising business thanks to new advances in artificial intelligence. The company announced a substantial increase in revenue to $36.5 billion, up 27% year-over-year, setting a new record for the January through March period and beating analysts’ expectations. However, the company provided a softer revenue outlook for the second quarter, forecasting between $36.5 billion and $39 billion, averaging 18% growth for the year – below analysts’ average forecast of $38.3 billion. This conservative outlook caused Meta’s shares to fall by — 11% in extended trading, reflecting investor concerns about the company’s ability to grow at the pace it has previously.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) fell 0.27%, France’s CAC 40 (FR40) closed down 0.17%, Spain’s IBEX 35 (ES35) lost 0.43%, and the UK’s FTSE 100 (UK100) closed positive 0.26%.

WTI crude oil futures faced downward pressure on Thursday as investors weighed the potential impact of a delayed US rate cut on the demand outlook. Traders were wary of the prospect of the Fed taking longer to raise rates amid a string of solid inflation and employment data. Markets now await Thursday’s US GDP data and the PCE Price Index report, which the Fed prefers to release on Friday, to determine the future outlook. However, official data showed that US crude inventories fell by 6.37 million barrels last week, contradicting expectations of a 1.6 million barrel increase. Meanwhile, supply concerns eased as tensions in the Middle East continued to reduce, and Iran and Israel signaled no further military action against each other.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) rose 2.42%, China’s FTSE China A50 (CHA50) gained 0.35% for the day, Hong Kong’s Hang Seng (HK50) added 2.21%, and Australia’s ASX 200 (AU200) closed at its opening price. The Hang Seng Index (HK50) hit its highest level in nearly five months as positive outlooks for Chinese and Hong Kong equities from central investment banks, including Goldman Sachs and UBS, continued to lift sentiment.

Malaysia’s annual inflation rate unexpectedly reached 1.8% in March 2024, unchanged for the second consecutive month but below market forecasts of 2%. The latest result remained at the highest level since October 2023.

The Japanese yen breached 155 per dollar on Thursday, falling to new 34-year lows as the Bank of Japan begins its two-day monetary policy meeting. The BoJ is expected to leave rates unchanged after exiting negative rates in March. Still, traders will watch for any hawkish signals as the yen weakens, breaking through a psychologically crucial level market previously thought would prompt Tokyo to act.

S&P 500 (US500) 5,071.63 +1.08 (+0.02%)

Dow Jones (US30) 38,460.92 −42.77 (−0.11%)

DAX (DE40) 18,088.70 −48.95 (−0.27%)

FTSE 100 (UK100) 8,040.38 −4.43 (−0.055%)

USD Index 105.83 +0.15 (+0.14%)

• – Eurozone GfK German Consumer Climate (m/m) at 09:00 (GMT+3);
• – US GDP (q/q) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Pending Home Sales (m/m) at 17:00 (GMT+3);
• – Natural Gas Storage (w/w) at 17:30 (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.

By JustMarkets

At Monday’s close, the Dow Jones Industrial Average (US30) was up 0.69%, while the S&P 500 Index (US500) added 1.20%. The NASDAQ Technology Index (US100) closed positive 1.59% on Tuesday. The US stock indices closed moderately higher, with the Dow Jones Industrials Index rising to a one-week high. Better-than-expected first-quarter earnings results supported stocks. Stock indices continued to rise after a weaker-than-expected report on the S&P US manufacturing PMI for April, which led to lower bond yields.

Tesla’s (TSLA) first-quarter net income fell by 55%, but its share price rose in aftermarket trading Tuesday as the company said it would accelerate production of new, more affordable vehicles. The small models will include the Model 2, which is expected to cost about $25,000 and will use the basis of next-generation cars and some features of current models.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 1.55%, France’s CAC 40 (FR40) closed up 0.81%, Spain’s IBEX 35 (ES35) jumped by 1.70%, and the UK’s FTSE 100 (UK100) closed positive 0.26%.

The S&P Eurozone Manufacturing PMI for April unexpectedly declined 0.5 to 45.6, weaker than expectations of a rise to 46.5. However, the composite PMI for April rose by 1.1 to 51.4, exceeding expectations of 50.7 and showing the fastest growth rate in 11 months. ECB Vice President de Guindos said yesterday that if the situation develops in the same direction as in recent weeks, the ECB will ease the restrictive monetary policy regime in June. For his part, ECB Governing Council representative and Bundesbank President Nagel added that if the favorable inflation outlook from March is confirmed in the June forecast and incoming data support it, the ECB may consider lowering interest rates. Thus, most ECB representatives agree to a rate cut at the June 6 meeting. The probability of such a scenario is 86%.

WTI crude futures are holding above $83 per barrel after rising nearly 2% on Tuesday, helped by data showing an unexpected decline in US crude inventories last week, indicating steady demand. Latest data from the American Petroleum Institute showed that US crude inventories fell by 3.23 million barrels last week, reversing a 4.09 million barrel increase the previous week and defying market expectations for a 1.8 million barrel rise in inventories. The demand outlook was also boosted by cooling US business activity data, which supports the need for an interest rate cut by the Federal Reserve.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.30%, China’s FTSE China A50 (CHA50) was down 0.02% for the day, Hong Kong’s Hang Seng (HK50) was up 1.92% and Australia’s ASX 200 (AU200) was positive 0.45%.

The Australian dollar rose to $0.65, hitting its highest level in nearly two weeks, as stronger-than-expected domestic inflation data bolstered expectations that the Reserve Bank of Australia (RBA) will not cut interest rates anytime soon. The country’s Consumer Price Index fell to 3.6% in the first quarter from 4.1% in the previous quarter, slowing for the fifth consecutive quarter but above forecasts of 3.4%. Australia’s monthly consumer price index accelerated to 3.5% in March from 3.4% in February.

Hong Kong’s annual inflation rate eased to 2% in March from 2.1% in February. All sectors participated in the rally, including the technology sector, which climbed more than 2% after Nvidia recovered from a recent drop. Xiaomi Corp. shares rose by 2% on signs that an active electric car business could support the company’s earnings in the coming years.

In Asia, investors are eagerly awaiting the start of the Beijing Auto Show on Thursday, which could lift automakers’ share prices. At the event, BYD Co. will unveil its new all-electric Ocean-M car, which is expected to be a benchmark for future models.

S&P 500 (US500) 5,070.55 +59.95 (+1.20%)

Dow Jones (US30) 38,503.69 +263.71 (+0.69%)

DAX (DE40) 18,137.65 +276.85 (+1.55%)

FTSE 100 (UK100) 8,044.81 +20.94 (+0.26%)

USD Index 105.69 −0.39 (−0.36%)

• – New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
• – Australia Consumer Price Index (q/q) at 04:30 (GMT+3);
• – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – US Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – Canada Retail Sales (m/m) at 15:30 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (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.

By JustMarkets

At Monday’s close, the Dow Jones Industrial Average (US30) was up 0.67%, while the S&P 500 Index (US500) added 0.87%. The NASDAQ Technology Index (US100) closed positive 1.11%. The US stock indices rose moderately, with the Dow Jones Industrials Index hitting a 1-week high. Yesterday, reduced geopolitical tensions helped stocks rise, as the exchange of strikes between Iran and Israel may be temporarily halted. Additionally, Nvidia’s (NVDA) 4% gain on Monday helped tech stocks as Nvidia recovered some of the 10% drop from last Friday.

About 180 companies in the S&P 500 (US500), or more than 40% of total capitalization, are scheduled to report earnings this week, including four of the “Magnificent Seven” technology companies: Tesla (TSLA), Alphabet (GOOG), Microsoft (MSFT) and Meta Platforms (META).

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 0.70%, France’s CAC 40 (FR40) closed up 0.22%, Spain’s IBEX 35 (ES35) jumped by 1.50%, and the UK’s FTSE 100 (UK100) closed positive 1.62%.

The gold price held near $2,300 per ounce on Tuesday, near a three-week low, amid easing fears of widening conflict in the Middle East. Investors scaled back investments in safe-haven assets in favor of riskier ones after Tehran downplayed the significance of a retaliatory Israeli drone strike on Iran aimed at easing tensions.

Turkey, Iraq, Qatar, and the UAE signed a transportation agreement to connect the Persian Gulf to Europe. The memorandum obliges the signatories to create the conditions for the project’s implementation. The project aims to create a 1,200-kilometer road and railroad connecting the Persian Gulf to Turkey via Iraq.

The US approved new sanctions against Iran’s oil sector in the oil market, targeting shippers and refiners of Iranian crude. This led to a slight rise in oil prices on Tuesday. The fundamental and geopolitical situation will keep oil above $80 per barrel in the coming weeks.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 1.00%, China’s FTSE China A50 (CHA50) decreased by 0.09% for the day, Hong Kong’s Hang Seng (HK50) was up 1.77%, and Australia’s ASX 200 (AU200) was positive 1.08%.

Singapore’s annual inflation rate for March 2024 slowed to 2.7% from 3.4% in the previous month, below market expectations of 3.1%. This is the lowest rate since September 2021, as inflation declined across most sub-indices.

The Australian dollar climbed to $0.645, hitting a one-week high, as investors reacted to April’s solid Purchasing Managers’ Index (PMI) reports. The data showed that private sector growth in Australia increased by the most in 2 years in April as manufacturing activity approached breakeven levels, while service sector activity remained active for the third consecutive month. The latest data supports the view that the Reserve Bank of Australia (RBA) may keep interest rates on hold longer to counter inflationary pressures. Some analysts also suggest that the RBA may raise rates again in the second half of 2024 due to rising activity. Investors are awaiting the country’s inflation data to be released later this week.

The latest PMI data in Japan showed that manufacturing activity was close to stable in April, while service sector activity rose the most in 11 months. Investors look forward to the Bank of Japan’s policy decision later this week. The BOJ is pressured to raise rates again because of steady inflation and a weakening yen. Still, the Central Bank has signaled that it will maintain favorable monetary conditions for some time.

S&P 500 (US500) 5,010.60 +43.37 (+0.87%)

Dow Jones (US30) 38,239.98 +253.58 (+0.67%)

DAX (DE40) 17,860.80 +123.44 (+0.70%)

FTSE 100 (UK100) 8,023.87 +128.02 (+1.62%)

USD Index 106.13 −0.02 (−0.02%)

• – Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
• – Australia Services PMI (m/m) at 02:00 (GMT+3);
• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• – Japan Services PMI (m/m) at 03:30 (GMT+3);
• – Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
• – German Manufacturing PMI (m/m) at 10:30 (GMT+3);
• – German Services PMI (m/m) at 10:30 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – UK Services PMI (m/m) at 11:30 (GMT+3);
• – US Building Permits (m/m) at 15:00 (GMT+3);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
• – US Services PMI (m/m) at 16:45 (GMT+3);
• – US New Home Sales (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.

By JustMarkets

On Friday, the Dow Jones (US30) Index gained 0.56% (for the week -0.23%), while the S&P 500 (US500) Index fell by 0.88% (for the week -3.54%). The NASDAQ Technology Index (US100) closed negative 2.05% (for the week -6.11%). The S&P 500 (US500) fell to a one-month low, and the NASDAQ (US100) fell to a 2-month low. Weak corporate news and rising geopolitical risks weighed on stocks.

The latest escalation in the Israeli-Iranian conflict (an Israeli drone attack on Isfahan in Iran) caused risk assets to fall sharply across all markets. But Iran later said it had “no immediate plans” to retaliate, hoping to pull both sides back from the brink of full-scale conflict. That helped cushion the decline somewhat at last week’s indices close.

On Friday, Chicago Fed President Goolsbee’s hawkish comments supported the dollar when he said that inflation progress has stalled in 2024. It makes sense to wait and get more clarity before cutting interest rates. So, markets now expect the Central Bank to hold rates steady until September and to make no more than one rate cut this year. That’s an optimistic scenario for the US dollar.

Netflix (NFLX) shares fell more than 8% after the company projected second-quarter revenue below consensus. Demand concerns are weighing on chip stocks after Taiwan Semiconductor Manufacturing Co (TSM), the world’s largest maker of advanced chips, lowered its expectations for semiconductor market growth this year to 2024.

The House of Representatives quickly approved $95 billion in foreign aid for Ukraine, Israel, and other US allies in a rare Saturday session as Democrats and Republicans united after months of stiff resistance from the right over renewed US support to repel a full-scale invasion by Russia.

Recent volatility in the Mexican peso (MXN) caused by rising tensions in the Middle East is no cause for concern over inflation, the governor of the Bank of Mexico (Banxico) said, amid expectations that the central bank will continue to be cautious in its upcoming monetary policy decision. The Mexican peso, considered by many to be a proxy for risk assets, fell the hardest on reports of rising tensions between Israel and Iran, though it later recovered most of that fall. The peso has been the best-performing primary currency over the past 12 months.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) was down 0.56% (for the week -1.12%), France’s CAC 40 (FR40) closed down 0.01% (for the week -0.36%), Spain’s IBEX 35 (ES35) lost 0.33% (for the week +0.57%), and the UK’s FTSE 100 (UK100) closed positive 0.24% (for the week -1.25%).

On Friday, ECB Governing Council spokesman Simkus said that the Eurozone can afford a less tight monetary policy and that the ECB’s three rate cuts this year align with the baseline. Thus, the European Central Bank intends to change its economic policy stance and cut interest rates soon. According to most ECB voting officials, the likely start date is the next meeting in June.

WTI crude futures fell to $81.5 a barrel on Monday, falling to four-week lows amid easing geopolitical concerns in the Middle East. Iran downplayed apparent Israeli strikes on its territory last week and said it had no plans to retaliate. Nevertheless, investors continued to watch the region. Iran is the third-largest producer in OPEC, and it exports most of its oil to China and other countries outside the US financial system.

Asian markets were mostly up last week. Japan’s Nikkei 225 (JP225) fell by 5.09%, China’s FTSE China A50 (CHA50) was little changed in price for the week, Hong Kong’s Hang Seng (HK50) fell 1.60%, and Australia’s ASX 200 (AU200) was negative 2.84%.

In China, the central bank kept the one-year and five-year lending rates at 3.45% and 3.95%, respectively, amid stronger-than-expected first-quarter GDP data and efforts to stabilize the yuan. On the other hand, both rates are at historic lows, reflecting the government’s concerted efforts to stimulate economic growth amid challenges in the real estate sector and persistent deflationary pressures. Investors now await the Bank of Japan’s policy decision later this week.

In Australia, markets are betting that the central bank will start cutting rates later this year. Investors digested data that the country’s unemployment rate rose to 3.8% in March from 3.7% in February, confirming a dovish view on the country’s monetary policy. Investors now await Australia’s first-quarter and March inflation data this week for more clarity on the policy path.

S&P 500 (US500) 4,967.23 −43.89 (−0.88%)

Dow Jones (US30) 37,986.40 +211.02 (+0.56%)

DAX (DE40) 17,737.36 −100.04 (−0.56%)

FTSE 100 (UK100) 7,895.85 +18.80 (+0.24%)

USD Index 106.12 −0.03 (−0.03%)

• – China PBoC Loan Prime Rate (m/m) at 04:15 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 18:30 (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.

“Credit standards are tightening, thereby freezing out borrowers”

By Elliott Wave International

Recent headlines about the U.S. economy are rosy:

• US economic growth for last quarter is revised up slightly to a healthy 3.4% annual rate (AP News, March 28)
• US economy continues to shine with help from consumers, labor market (Reuters, March 28)

It’s all well and good to announce positive economic news. Yet, consumers of such news may not be getting the full story.

In other words, there’s plenty of less-than-positive economic developments, and I’ll point out just three which portend a possible economic contraction.

The first one has been well-advertised: the developing commercial real estate crisis. In a nutshell, office building owners face higher interest rates as their loans mature. This could set off a wave of defaults. Indeed, there’s already been a dramatic rise in the number of U.S. commercial property foreclosures in the past four years.

Another sign of a developing economic slowdown has to do with consumers. If you live in the U.S., quite a few of your neighbors — or at least residents of your community — are tapped out.

Here’s a chart from the March Elliott Wave Financial Forecast, a monthly publication which covers major U.S. financial markets:

As you can see, credit card delinquencies have been rising since 2022. Indeed, credit card arrears are higher than they’ve been since the wake of the Great Recession in 2007-2009.

And speaking of the Great Recession, sub-prime car loan delinquencies are even higher than they were then.

The March Elliott Wave Financial Forecast elaborates with this chart and commentary:

Car loan delinquencies are higher than at any time in the data’s history, which goes back to 1996. … Credit standards are tightening, thereby freezing out borrowers. … Access to auto credit is the lowest in nearly four years.

Also keep in mind that the economy follows the stock market.

If the stock market goes into a correction — or worse — expect the economy to weaken. History shows that there’s usually a few months lag time between the action of the stock market and economy.

Elliott wave analysis can help you get a handle on the stock market’s trend.

If you’re unfamiliar with the Elliott wave method, read Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

All waves are of a specific degree. Yet it may be impossible to identify precisely the degree of developing waves, particularly subwaves at the start of a new wave. Degree is not based upon specific price or time lengths but upon form, which is a function of both price and time. Fortunately, the precise degree is usually irrelevant to successful forecasting since it is relative degree that matters most. To know a major advance is due is more important than its precise name. Later events always clarify degree.

Get more insights into the Wave Principle by reading the entire online version of the book.

Learn more by following this link: Elliott Wave Principle: Key to Market Behavior — get instant access.

By JustMarkets

At Thursday’s close, the Dow Jones Index (US30) was up 0.06%, while the S&P 500 Index (US500) decreased by 0.22%. The NASDAQ Technology Index (US100) closed positive 0.1% yesterday. A rise in T bond yields on Thursday pressured stocks. Hawkish comments from the Federal Reserve pushed bond yields up and pressured stock indices when New York Fed President Williams and Atlanta Fed President Bostic said the Fed would not rush to cut interest rates. In addition, weakness in chip company stocks weighed on the overall market for the second session. Stocks found some support from Thursday’s US economic reports, which were mostly better than expected and bolstered the outlook for a soft landing.

The US weekly jobless claims were unchanged at 212,000, indicating a robust labor market. The Philadelphia Fed Business Outlook Index for April unexpectedly rose by 12.3 to a 2-year high of 15.5 vs. expectations of a decline to 2.0. The US home sales for March fell by 4.3% m/m to 4.19 million, slightly weaker than expectations of 4.20 million.

Tesla (TSLA) shares fell more than 3% and topped the NASDAQ (US100) losers list after Deutsche Banks downgraded the stock to “hold” from “buy.” Meta Platforms (META) is up more than 1% and led the NASDAQ (US100) risers after Moody’s Ratings Services upgraded the company’s senior unsecured debt rating to Aa3 from A1.

Geopolitical risks in the Middle East remain a negative factor for risk assets. On Friday morning, Israel retaliated against Iran following Tehran’s attack over the weekend. Notably, the attack was carried out on the birthday of Iranian leader Khamenei, who turns 85 today.

Bitcoin briefly dipped below the $60,000 mark on Friday before stabilizing around $61,000, hitting its lowest level in six weeks. Financial markets were swept by a wave of risky trades following reports that Israel had struck targets in Iran, Iraq, and Syria in response to Tehran’s attack on Israel over the weekend. Meanwhile, some analysts have argued that Bitcoin and other crypto-assets could provide an alternative store of value in times of geopolitical and economic uncertainty.

Equity markets in Europe were mostly up on Thursday. Germany’s DAX (DE40) added 0.38%, France’s CAC 40 (FR40) closed up 0.52%, Spain’s IBEX 35 (ES35) rose by 1.23%, and the UK’s FTSE 100 (UK100) closed positive 0.37%.

Eurozone construction output rose by 1.8% m/m in February, the largest increase in a year. In their monthly report, the Bundesbank upgraded their assessment of the German economy and said that a “slight increase” in growth is possible in Q1, an improvement from March when they forecast the economy to contract in Q1. ECB executive board spokesman de Guindos said yesterday that if there is increased confidence among ECB officials that the 2% inflation target will be met, reducing the current level of monetary policy restriction would be appropriate. His counterpart, ECB Governing Council spokesman Holzmann, said a majority vote in June would likely favor an ECB rate cut.

WTI crude futures jumped about 2% above $84 a barrel on Friday, recovering most of the losses suffered earlier in the week following reports of large explosions in Iran, Iraq, and Syria suspected to have been attacked by Israel. The reimposition of US sanctions on Venezuelan oil and potential new EU restrictions on Iran will continue to drive oil markets higher.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) added 0.13%, China’s FTSE China A50 (CHA50) rose by 0.52%, Hong Kong’s Hang Seng (HK50) gained 0.03%, while Australia’s ASX 200 (AU200) was negative 0.40%.

Malaysia’s economy grew 3.9% year-on-year in the first quarter of 2024, accelerating from the 3.0% growth in the previous period. This is the economy’s fastest growth in a year, driven by positive contributions from all sectors, led by the services sector (4.4% vs. 4.2% in Q4).

In a trilateral statement, the US, Japan, and South Korea said they will continue close consultations on currency market developments, recognizing the serious concerns of Japan and Korea about the recent sharp depreciation of their currencies. In its semi-annual report on the financial system, the Bank of Japan noted that financial conditions at companies are improving, and companies are generally quite resilient to stress. Many Japanese companies have sufficient profitability to withstand rising interest rates. Swaps estimate the odds of a 10 bps rate hike by the BoJ at 1% for the April 26 meeting and 39% for the next meeting on June 14.

S&P 500 (US500) 5,011.12 −11.09 (−0.22%)

Dow Jones (US30) 37,775.38 +22.07 (+0.058%)

DAX (DE40) 17,837.40 +67.38 (+0.38%)

FTSE 100 (UK100) 7,877.05 +29.06 (+0.37%)

USD Index 105.86 -0.09 (-0.09%)

• – Japan National Core Consumer Price Index at 02:30 (GMT+3);
• – UK Retail Sales (m/m) at 09:00 (GMT+3);
• – German Producer Price Index (m/m) at 09:00 (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.

By JustMarkets

At Monday’s close, the Dow Jones Index (US30) decreased by 0.12%, while the S&P 500 Index (US500) was down 0.58%. The NASDAQ Technology Index (US100) closed yesterday negative 1.15%. A drop in chip company stocks negatively impacted the overall market on Wednesday after ASML Holding NV reported first-quarter net sales below consensus. Geopolitical risks in the Middle East continue to weigh on equities amid concerns that Israel will retaliate after Iran fired a barrage of missiles and drones at Israel over the weekend.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) added 0.02%, France’s CAC 40 (FR40) closed up 0.62%, Spain’s IBEX 35 (ES35) rose by 1.02%, and the UK’s FTSE 100 (UK100) closed positive 0.35% on Wednesday. European equity markets opened higher on Thursday amid improving risk sentiment, while investors ignored another tech-driven sell-off on Wall Street.

Several ECB officials made statements yesterday. Cipollone of the ECB executive board said that if incoming data confirms that inflation is returning to the 2% target, removing some of the restrictive measures introduced in 2023 would be appropriate. This view was also supported by the representative of the ECB’s Governing Council, Centeno. He added that it was time for the ECB to change monetary policy due to weak economic growth and progress on disinflation. But there was a counter-argument from ECB Governing Council spokesman Holzmann, who said he was not fully convinced that the ECB should start cutting interest rates in June, citing the results of the Eurozone wage debate and rising tensions in the Middle East, which poses risks to inflation.

WTI crude prices held below $83 a barrel on Thursday, having lost more than 3% in the previous session, amid signs that US oil supply remains strong and demand is rising. EIA data showed that US crude inventories rose by 2.735 million barrels last week, increasing for the fourth week and beating market expectations for a 1.6 million barrel increase. Meanwhile, the US said it would reimpose oil sanctions against Venezuela in response to President Nicolas Maduro’s failure to fulfill his campaign pledges. European Union leaders also discussed new restrictions on Iran following its attack on Israel over the weekend. Any restrictions will keep oil prices from falling.

The US natural gas prices fell more than 3.5% to below $1.7 per MMBtu, the lowest in two months, due to a sharp decline in gas going to LNG export plants and a large surplus in storage. In addition, gas inventories are expected to be 36% above the seasonal average due to a combination of high initial inventory levels and a mild winter.

Asian markets traded without a single dynamic yesterday. Japan’s Nikkei 225 (JP225) was down 1.32%, China’s FTSE China A50 (CHA50) was up 0.79%, Hong Kong’s Hang Seng (HK50) added 0.02%, and Australia’s ASX 200 (AU200) was negative 0.09%.

On Wednesday, China’s central bank said it will maintain a cautious monetary policy and ensure the efficient utilization of financial resources. It added that the authorities will ensure that the yuan’s movement is mainly driven by supply and demand. Meanwhile, economists forecast that China’s central bank will cut the RRR by 25 bps in Q3 2024 after it cut the rate by 50 bps earlier this year, the biggest cut in 2 years.

Australia’s labor market report came out mixed. Australia’s seasonally adjusted unemployment rate rose to 3.8% in March 2024 from February’s five-month low of 3.7% but below market forecasts of 3.9%. The number of unemployed increased by 20.6 thousand to 569.9 thousand, while those looking for work rose by 19.3 thousand to 371.3 thousand.

S&P 500 (US500) 5,022.21 −29.20 (−0.58%)

Dow Jones (US30) 37,735.11 −45.66 (−0.12%)

DAX (DE40) 17,770.02 +3.79 (+0.021%)

FTSE 100 (UK100) 7,847.99 +27.63 (+0.35%)

USD Index 105.86 -0.09 (-0.09%)

• – Australia Unemployment Rate (m/m) at 04:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US Existing Home Sales (m/m) at 17:00 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (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.

By ForexTime

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By JustMarkets

At Monday’s close, the Dow Jones Index (US30) added 0.17%, while the S&P 500 Index (US500) was down 0.21%. The NASDAQ Technology Index (US100) closed negative 0.12% yesterday. The Fed’s hawkish comments on Tuesday pushed 10-year T-note yields to a 5-month high and negatively impacted equities. The US Fed Chairman Jerome Powell said yesterday that given the strength of the labor market and progress on inflation so far, it is appropriate to give restrictive policy additional time to work. In addition, Fed Vice Chairman Jefferson added that if incoming data indicate that inflation is more resilient, it would be appropriate to maintain the current restrictive policy for a longer period. Currently, markets expect only 40 basis points of easing from the Fed this year, down significantly from 160 basis points at the beginning of the year. Markets are pricing in the chances of a rate cut of 25 bps. Up to 3% will be at the next FOMC meeting on May 1, and 20% will be at the June 12 meeting.

Geopolitical risks in the Middle East continue to weigh on equities amid concerns that Israel will retaliate after Iran fired a barrage of rockets and drones at Israel over the weekend. Israel’s military cabinet postponed a meeting scheduled for Tuesday to decide on retaliatory measures.

The International Monetary Fund raised its 2024 global GDP forecast to 3.2% from its January forecast of 3.1%.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) fell by 1.44%, France’s CAC 40 (FR40) closed down 1.40%, Spain’s IBEX 35 (ES35) lost 1.50%, and the UK’s FTSE 100 (UK100) closed negative 1.82% on Tuesday.

German economic growth expectations in the ZEW survey rose by 11.2 to a two-year high 42.9, beating expectations of 35.5. ECB President Lagarde said yesterday that unless there are major shocks to developments, the ECB is approaching a point where the bank will have to moderate its restrictive monetary policy. Lagarde also added that this will likely happen in a fairly short period. ECB Governing Council representative Makhlouf provided more specificity, saying that the ECB could cut interest rates at its next meeting in June if the upward trend in inflation continues. Swaps put the odds of a 25 bps ECB rate cut at its next meeting on June 6 at 87%.

WTI crude futures fell as low as $85 a barrel on Wednesday, declining for the third consecutive session. Economic uncertainty in China, a major oil importer, and a delayed US interest rate cut weighed on the demand outlook. However, given tensions in the Middle East and considering OPEC+ production cuts, the overall fundamental backdrop points to further gains in oil prices.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) was down 1.94%, China’s FTSE China A50 (CHA50) lost 0.40%, Hong Kong’s Hang Seng (HK50) decreased by 2.12% and Australia’s ASX 200 (AU200) was negative 1.81%.

The New Zealand dollar rose to $0.59 after data showed that the country’s inflation rate eased to 4% y/y in the first quarter, the lowest since June 2021. The reading matched economists’ expectations but exceeded the Reserve Bank of New Zealand’s (RBNZ) forecast of 3.8% y/y. Earlier this month, the RBNZ kept the rate unchanged for the sixth consecutive meeting as policymakers sought to further ease capacity and inflation pressures despite data pointing to weakening economic activity.

Japan posted a trade deficit for the third consecutive fiscal year as the cost of energy and other imported goods rose and the yen remained weak.

Westpac forecasts Australian GDP growth to remain modest at 1.6% in 2024, down from a soft 1.5% a year earlier. This is well below Australia’s “trend” growth rate of around 2.5%.

S&P 500 (US500) 5,061.82 −61.59 (−1.20%)

Dow Jones (US30) 37,735.11 −248.13 (−0.65%)

DAX (DE40) 18,026.58 +96.26 (+0.54%)

FTSE 100 (UK100) 7,965.53 −30.05 (−0.38%)

USD Index 106.35 +0.14 (+0.13%)

• – New Zealand Consumer Price Index (q/q) at 01:45 (GMT+3);
• – Japan Trade Balance (m/m) at 02:50 (GMT+3);
• – UK Consumer Price Index (m/m) at 09:00 (GMT+3);
• – UK Producer Price Index (m/m) at 09:00 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – UK BoE Gov Bailey Speaks 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.

By JustMarkets

At Monday’s close, the Dow Jones (US30) Index decreased by 0.65%, while the S&P 500 (US500) Index was down 1.20%. The NASDAQ Technology Index (US100) closed yesterday negative at 1.79%. The US dollar initially declined on Monday amid lower liquidity demand, as stocks rose after geopolitical concerns eased amid hopes that diplomatic efforts would curb the conflict between Iran and Israel. However, the US dollar jumped sharply in the US session after March, and US retail sales rose more than expected, a hawkish factor for Fed policy. In addition, the inability of equities to hold on to the early rally caused additional liquidity demand for the dollar. That said, last night, Israel’s defense minister said that Israel has no choice but to retaliate against Iran for its drone missile attack on Israel over the weekend.

Salesforce (CRM) shares fell more than 7%. They topped the list of losers in the S&P 500 and Dow Jones Industrials following a Bloomberg report that the company is interested in acquiring Informatica, which analysts say could attract regulatory attention. Atlassian (TEAM) slid more than 7% and topped the list of losers in the Nasdaq 100 after Mizuho Securities cut its price target on the company’s shares to $240 from $265. Tesla (TSLA) closed down more than 5%, topping the Nasdaq 100 losers list, after CEO Musk said the company will cut its global workforce by more than 10% as demand for electric vehicles slows.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 0.54% (up -1.28% on the week), France’s CAC 40 (FR40) closed higher by 0.43%, Spain’s IBEX 35 (ES35) closed at its opening price, and the UK’s FTSE 100 (UK100) closed negative 0.38% on Monday. European stock markets opened lower on Tuesday as strong US retail sales data reinforced expectations that the Federal Reserve will postpone interest rate cuts. Investors are also keeping a close eye on developments in the Middle East amid concerns that an Iranian attack on Israel over the weekend could lead to a wider conflict in the region.

The latest data showed an unexpected increase in the UK unemployment rate to 4.2%, exceeding expectations of 4.0%, while wage growth slowed gradually. Traders adjusted their forecasts for the Bank of England and the Federal Reserve to cut interest rates this year, driven by strong US inflation figures. The Bank of England rate is expected to fall to 4.75% by the end of 2024 from the current 5.25%, a significant change from the previous forecast that suggested a rate cut to 4.5% by December.

WTI crude oil prices rose to around $86 a barrel on Tuesday, reversing losses from the previous session as investors await Israel’s response. Israel’s military chief said his country would respond to the attack, with reports suggesting they were targeting key targets in Iran. Iran is a leading OPEC member, producing more than 3 million barrels of crude oil daily.

Asian markets were predominantly down. Japan’s Nikkei 225 (JP225) was down 0.65% yesterday, China’s FTSE China A50 (CHA50) was up 2.7%, Hong Kong’s Hang Seng (HK50) lost 0.99% yesterday, and Australia’s ASX 200 (AU200) was negative 0.75%.

Asian stocks fell sharply on Tuesday, following an overnight decline on Wall Street amid lingering concerns over geopolitical tensions in the Middle East and a longer-term interest rate hike in the US. However, losses in Chinese stocks were slightly less than their peers as gross domestic product (GDP) data showed the country’s economy grew more than expected in the first quarter. China’s economy grew 5.3% y/y in the first quarter of 2024, exceeding market forecasts of 5.0% and following 5.2% growth in the previous period. This was the sharpest annual growth since Q2 2023, helped by continued supportive measures from Beijing, while the Lunar New Year festival also boosted consumer spending. Fixed asset investment rose by 4.5% in the first three months of the year, the highest in three years and above the consensus forecast of 4.3%. Meanwhile, March data showed that industrial production and retail sales rose less than expected, underscoring the need for further policy easing for the economy. At the same time, the unemployment rate came in at 5.2% in March, remaining near February’s 7-month high of 5.3%.

S&P 500 (US500) 5,061.82 −61.59 (−1.20%)

Dow Jones (US30) 37,735.11 −248.13 (−0.65%)

DAX (DE40) 18,026.58 +96.26 (+0.54%)

FTSE 100 (UK100) 7,965.53 −30.05 (−0.38%)

USD Index 106.35 +0.14 (+0.13%)

• – China GDP (q/q) at 05:00 (GMT+3);
• – China Industrial Production (y/y) at 05:00 (GMT+3);
• – China Unemployment Rate (m/m) at 05:00 (GMT+3);
• – China Retail Sales (m/m) at 05:00 (GMT+3);
• – UK Average Earnings Index (m/m) at 09:00 (GMT+3);
• – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
• – UK Unemployment Rate (m/m) at 09:00 (GMT+3);
• – German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – Eurozone Trade Balance (m/m) at 12:00 (GMT+3);
• – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US Building Permits (m/m) at 15:30 (GMT+3);
• – US Industrial Production (m/m) at 16:15 (GMT+3);
• – UK BoE Gov Bailey Speaks at 20:00 (GMT+3);
• – Canada BoC Gov Macklem Speaks at 20:15 (GMT+3);
• – US Fed Chair Powell Speaks at 20:15 (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.