InvestMacro

By JustMarkets

Stock indices traded mixed on Wednesday, with the Dow Jones Industrials (US30) falling to a two-week low. Stocks rebounded late in the day after bond yields retreated from early highs following an unexpected decline in the ISM Services Business Activity Index for March in the US. At yesterday’s close, the Dow Jones (US30) index was down 0.11%, while the S&P 500 (US500) Index was up 0.11%. The NASDAQ Technology Index (US100) closed positive 0.23%.

The March US employment change from ADP rose by 184,000, which was stronger than expectations of 150,000. Additionally, the February ADP figure was revised upward to 155,000 from the previously reported 140,000. The data points to a robust US labor market.

Atlanta Fed President Bostic said yesterday that due to the uneven nature of inflation progress, it will likely be appropriate for the Fed to cut interest rates later this year, in the fourth quarter.

Ford Motor (F) shares closed higher by more than 2% after the company reported a 7% increase in US auto sales in the first quarter due to strong demand for gas-electric hybrid vehicles. Intel (INTC) is down more than 8% and topped the list of losers on the Dow Jones (US30) and NASDAQ (US100) markets after the company said losses in its fab business have gotten worse, and the division may not reach its break-even point for several years.

Equity markets in Europe were mostly up on Wednesday. Germany’s DAX (DE40) rose by 0.46%, France’s CAC 40 (FR40) closed up 0.29%, Spain’s IBEX 35 (ES35) added 0.52%, and the UK’s FTSE 100 (UK100) closed positive 0.03%.

The Eurozone Consumer Price Index for March declined to 2.4% y/y from 2.6% y/y in February, better than expectations of 2.5% y/y. The core CPI declined to 2.9% y/y in March from 3.1% y/y in February, better than expectations of 3.0% y/y and the slowest growth rate in 2 years. The Eurozone unemployment rate for February was unchanged at a record low of 6.5%, beating expectations of a decline to 6.4%. The disinflation trend coincided with recent remarks by ECB policy director Robert Holzmann, who said that a slowdown in price growth could make a June rate cut appropriate.

Financial stocks led the gains on the corporate front, with BNP Paribas, Intesa Sanpaolo, and Santander adding more than 1.5%. German auto giants also rose significantly, with Volkswagen adding 2.5% and BMW jumping more than 5%. Finally, Siemens closed in the green after clarifying that it has no plans to make an offer to buy British engineering company Renishaw.

WTI crude oil prices fell slightly and are trading just below $86 per barrel after the latest EIA data showed an unexpected rise in US inventories. US crude inventories rose by 3.21 million barrels instead of the expected decline of 1.511 million barrels. Nevertheless, prices remained near 5-month levels as traders were concerned that the Middle East’s geopolitical tensions could disrupt oil supplies. In addition, OPEC+ countries decided to extend a voluntary production cut of 2.2 million barrels per day until June to stabilize the market.

Copper prices rose to $4.2 a pound, the highest since April last year, amid a weaker dollar after evidence of falling inflation strengthened the case for lower interest rates. Data compiled by ISM showed that prices in the service sector rose by the least in four years. Copper prices were also boosted by good economic data from China, which refuted fears of weaker demand in the country.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) fell by 0.97%, China’s FTSE China A50 (CHA50) decreased by 0.31%, Hong Kong’s Hang Seng (HK50) was down 1.22% by Wednesday’s close and Australia’s ASX 200 (AU200) was negative 1.34%.

Judo Bank Australia’s composite business activity index rose to 53.3 in March 2024 from 52.1 in the previous month. Australia’s private sector output growth accelerated sharply at the end of the first quarter, reaching the fastest pace in almost two years. This was mainly due to strong service sector growth, although output continued to contract.

S&P 500 (US500) 5,211.49 +5.68 (+0.11%)

Dow Jones (US30) 39,127.14 −43.10 (−0.11%)

DAX (DE40) 18,367.72 +84.59 (+0.46%)

FTSE 100 (UK100) 7,937.44 +2.35 (+0.03%)

USD Index 104.26 −0.55 (−0.53%)

• – Australia Services PMI (m/m) at 01:00 (GMT+3);
• – Australia Retail Sales (m/m) at 03:30 (GMT+3);
• – Switzerland Consumer Price Index (m/m) at 09:30 (GMT+3);
• – German Services (m/m) PMI at 10:55 (GMT+3);
• – Eurozone Services (m/m) PMI at 11:00 (GMT+3);
• – UK Services PMI (m/m) at 11:30 (GMT+3);
• – Eurozone Producer Price Index (m/m) at 12:00 (GMT+3);
• – Eurozone ECB Monetary Policy Meeting Accounts at 14:30 (GMT+3);
• – Canada Trade Balance (m/m) at 15:30 (GMT+3);
• – US Trade Balance (m/m) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (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 JustMarkets

At the end of yesterday, the Dow Jones Index (US30) was down 1.00%, while the S&P 500 Index (US500) decreased by 0.72%. The NASDAQ Technology Index (US100) closed negative 0.95%. Stocks declined as 10-year T-note yields rose to a 4-month high on Tuesday amid strong economic data. The US ISM manufacturing index rose the most in 1.5 years, dampening prospects for a Fed rate cut.

San Francisco Fed President Daley said yesterday that three 25 bps rate cuts in 2024 are a “reasonable baseline projection”. However, there is no need to cut rates now, given the economy’s strength. She added that if inflation is more resilient, the Fed could cut rates less, and if inflation falls faster, a rate cut may be warranted.

The February JOLTS survey unexpectedly increased US job openings by 8,000 to 8.756 million, indicating a stronger labor market than expectations of a decline to 8.730 million.

Tesla (TSLA) is down more than 5% and topped the NASDAQ (US100) losers list after reporting first-quarter vehicle deliveries of 386,810 units, well below the consensus forecast of 449,080 units.

Bitcoin (BTC/USD) fell more than 5% to a one-week low on Tuesday, dragged down by falling demand for bitcoin ETFs and stronger-than-expected US economic news that pushed back the prospect of a Federal Reserve interest rate cut. According to Bloomberg, investors withdrew $86 million from 10 spot bitcoin ETF funds on Monday.

Equity markets in Europe were mostly down on Tuesday. Germany’s DAX (DE40) fell by 1.13%, France’s CAC 40 (FR40) closed down 0.92% yesterday, Spain’s IBEX 35 (ES35) declined 0.89%, and the UK’s FTSE 100 (UK100) closed negative 0.22%.

S&P’s Eurozone Manufacturing PMI for March was revised upward by 0.4 to 46.1 from a previously reported reading of 45.7. The ECB’s 1-year inflation expectations for February fell to 3.1% from 3.3% in January, the lowest in 2 years. The Eurozone will release March inflation data today, which will be closely watched amid speculation that the European Central Bank is preparing to cut rates in June. Eurozone inflation has remained high since the start of the year and needs to fall further for the ECB to go for a summer rate cut, so the next three inflation reports are key for markets. If inflation delivers an upward surprise, bets for a rate cut will be pushed back.

WTI crude prices rose above $85 a barrel on Tuesday, hitting their highest level since October. Oil supplies faced fresh threats from attacks on Russian energy facilities by Ukraine and escalating conflict in the Middle East. Iran vowed to retaliate against Israel for an airstrike that killed two of its top generals and five other military advisers at the Iranian embassy compound in Damascus. In addition, Mexico’s state-owned oil company Pemex is set to cut crude exports in the coming months, adding to fears of an existing supply shortage. OPEC will hold a joint ministerial meeting today to assess market conditions and members’ compliance with production targets, with current production policies expected to remain unchanged.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.09%, China’s FTSE China A50 (CHA50) was down 0.21%, Hong Kong’s Hang Seng (HK50) jumped by 2.36% on Tuesday, and Australia’s ASX 200 (AU200) was negative 0.11%. The Hang Seng Index (HK50) today pulled back from a near 3-week peak reached in the previous session as fears intensified after a powerful earthquake struck Taiwan this morning, collapsing at least 26 buildings and injuring 56 people. In China, some railroad tracks were reportedly closed.

Core inflation in Japan’s capital slowed in March, and factory output unexpectedly fell in the previous month, adding uncertainty over how soon the Bank of Japan could raise interest rates again after emerging from negative interest rates. Several weak signs in the economy may encourage the central bank to hold off on another rate hike and give investors a reason to keep selling the yen, putting pressure on the Japanese authorities to intervene in the market to support the currency.

S&P 500 (US500) 5,205.81 −37.96 (−0.72%)

Dow Jones (US30) 39,170.24 −396.61 (−1.00%)

DAX (DE40) 18,283.13 −209.36 (−1.13%)

FTSE 100 (UK100) 7,935.09 −17.53 (−0.22%)

USD Index 104.97 +0.43 (+0.41%)

• – Japan Services PMI (m/m) at 03:30 (GMT+3);
• – China Caixin Services PMI (m/m) at 04:45 (GMT+3);
• – Eurozone Consumer Price Index (m/m) PMI at 12:00 (GMT+3);
• – OPEC Meeting (m/m) at 12:15 (GMT+3);
• – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
• – US ISM Services PMI (m/m) at 17:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – US Fed Chair Powell Speaks at 19:10 (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 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.

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%)

• – 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.

By JustMarkets

At the end of last trading week, the Dow Jones Index (US30) was up 0.08%, while the S&P 500 Index (US500) was up 0.23%. The NASDAQ Technology Index (US100) closed negative 0.05%.

The dollar index settled at 104.5 in post-holiday trading on Monday. Investors are digesting the latest PCE Price Index report, searching for clues about the Federal Reserve’s future monetary policy. Data released on Friday showed that the Fed’s recommended inflation rate rose by 0.3% month-on-month in February, slowing from an upwardly revised 0.4% increase in January, which was also in line with the consensus predicted. The report also showed that consumer spending last month rose by the most in a year, indicating the economy is resilient. Meanwhile, Fed Chairman Jerome Powell reiterated on Friday that the central bank is in no rush to cut interest rates and that the latest PCE inflation data aligns with what the Fed wants. Markets now believe there is a nearly 70% chance that the Fed will start cutting rates in June, with a total rate cut of 75 basis points this year.

Equity markets in Europe mostly went up last week. Germany’s DAX (DE40) increased by 1.75%, France’s CAC 40 (FR40) gained 0.69%, Spain’s IBEX 35 (ES35) jumped by 2.01%, and the UK’s FTSE 100 (UK100) closed positive 0.89%.

The UK economy remains weak, and rate cuts will be welcomed across sectors. The latest ONS data showed that the UK economy entered a technical recession in Q4 2023. The Spring Budget is forecast to boost GDP by around a quarter of one percentage point, but domestic growth needs more stimulus. Against this economic backdrop, the economy needs stimulus, with inflation falling rapidly and the labor market stagnant or marginally weaker. Therefore, the Bank of England has every reason to plan for a series of rate cuts this year, starting with its June 20 meeting.

According to the latest forecasts from ECB staff, Eurozone inflation will continue to fall in the coming months and quarters. With price pressures easing rapidly, the European Central Bank has additional certainty and flexibility regarding the timing of the first interest rate cut. Financial markets certainly believe this is the most likely scenario, which will put pressure on the euro in the weeks and months ahead.

Gold rose above $2,250 an ounce on Monday, extending its rally to record levels. Softer-than-expected US inflation data bolstered bets that the Federal Reserve will begin cutting interest rates in June. Lower interest rates reduce the opportunity cost of holding bullion, increasing its investment value.

WTI crude oil prices rose to around $83.5 a barrel on Monday, hitting their highest level in five months, as investors look ahead to this week’s joint OPEC+ ministerial meeting. The group is expected to review market fundamentals and OPEC representatives’ adherence to production targets, which will continue to support oil prices.

Asian markets traded flat last week. Japan’s Nikkei 225 (JP225) declined by 1.05%, China’s FTSE China A50 (CHA50) gained 0.05% over 5 trading days, Hong Kong’s Hang Seng (HK50) fell by 0.35% last week, and Australia’s ASX 200 (AU200) was positive 1.48%.

Asian stock markets were mixed on Monday as investors assessed several regional economic reports. A private survey showed that China’s manufacturing activity in March grew rapidly since February 2023 amid robust demand. Meanwhile, the Bank of Japan’s quarterly Tankan survey showed that sentiment among large manufacturers in Japan declined in Q1 for the first time in a year as automobile plant closures over the past few months took a heavy toll.

Indonesia’s annual inflation rate rose to 3.05% in March 2024 from 2.75% in February, beating expectations of 2.91%, above the BI (Bank Indonesia) target range of 1.5 to 3.5%. It was the highest inflation rate since August last year, with food prices rising the most in 18 months amid fasting in Ramadan and ahead of the Eid-el-Fitr holiday.

S&P 500 (US500) 5,254.35 0 (0%)

Dow Jones (US30) 39,807.37 0 (0%)

DAX (DE40) 18,492.49 0 (0%)

FTSE 100 (UK100) 7,952.62 0 (0%)

USD Index 104.49 -0.06 (-0.06%)

• – Japan Tankan Large Manufacturers Index (q/q) at 02:50 (GMT+3);
• – Japan Tankan Large Non-Manufacturers Index (q/q) at 02:50 (GMT+3);
• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• – China Caixin Manufacturing PMI (m/m) at 04:45 (GMT+3);
• – Canada Manufacturing PMI (m/m) at 16:30 (GMT+3);
• – US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
• – Canada BoC Business Outlook Survey 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.