InvestMacro

By JustMarkets

As of Wednesday’s stock market close, the Dow Jones Index (US30) was up 0.20%, the S&P 500 Index (US500) added 0.51%, and the NASDAQ Technology Index (US100) closed positive 0.58%.

Fed Chairman Powell said in front of Congress that it would likely be appropriate to begin reducing borrowing costs at some point this year. Still, the committee does not expect it will be appropriate to reduce the target range for the federal funds rate until it has more confidence that inflation is moving steadily toward 2%.

The latest economic data showed that US job openings for January, according to JOLTS, fell by 26,000 to 8.863 million, indicating a slight cooling in the labor market. Investors now await the main Nonfarm Payrolls report tomorrow.

Palantir (PLTR) closed higher by more than 9% after receiving a $178.4 million contract from the US Army to develop and produce ten prototype ground stations that use artificial intelligence and machine learning to process target information from space, airborne and ground sensors. JD.com (JD) closed higher by more than 16% after reporting fourth-quarter sales of ¥306.1 billion ($42.6 billion), beating the consensus forecast of ¥300 billion, and initiating a $3 billion share repurchase program. Hewlett Packard Enterprise (HPE) closed higher by more than 3% amid strong demand for the company’s artificial intelligence-focused servers. Orders for these servers totaled $3 billion, up $500 million from the last quarter.

At its March meeting, the Bank of Canada (BoC) kept its overnight rate target at 5%. It pledged to continue normalizing the bank’s balance sheet as policymakers remain concerned about risks to the inflation outlook. The bank said it would maintain its quantitative tightening policy until a further weakening in core inflation. The latest data showed that CPI inflation eased to 2.9% in January, but on an annualized and three-month basis, core inflation was from 3% to 3.5%. Policymakers forecast inflation to remain near 3% in the first half of this year and then gradually decline. The bank also noted that GDP growth remains weak and below potential, and employment continues to grow more slowly amid signs that wage pressures may be easing. At the press conference, Bank Governor Macklem said it was too early to consider cutting rates as more time is needed to ensure inflation falls to the 2% target.

Equity markets in Europe rallied yesterday. Germany’s DAX (DE40) rose by 0.10%, France’s CAC 40 (FR40) gained 0.28%, Spain’s IBEX 35 (ES35) increased by 0.79% on Wednesday, and the UK’s FTSE 100 (UK100) closed positive 0.43%.

Eurozone retail sales for January rose by 0.1% m/m, weaker than expectations of 0.2% m/m. German trade data was better than expected: exports for January rose by 6.3% m/m, stronger than expectations of 1.5% m/m and the largest increase in 3-1.5 years. In addition, January imports rose by 3.6% m/m, stronger than expectations of 1.8% m/m and the largest increase in 11 months.

In his pre-election budget statement, Treasury Secretary Jeremy Hunt announced plans for permanent tax cuts in line with slowing inflation to stimulate economic growth and support public services. The Office for Budget Responsibility (OBR) predicts that inflation will fall below the Bank of England’s target in the coming months and will also revise growth forecasts upwards.

The ECB’s monetary policy meeting will take place today. The ECB is forecast to leave the interest rate at 4.5%. In recent weeks, almost all ECB officials have unanimously argued that a premature rate cut could set a dangerous precedent for anchoring inflation. As a result, money markets have pushed back the likelihood of a first-rate cut from April to June. ECB chief Lagarde will likely reiterate that data remains lacking and refrain from giving clearer guidance on policy easing. Such a stance would be a moderately negative scenario for the euro.

WTI crude futures fell slightly to $79.1 a barrel on Wednesday, retreating from a four-month high after EIA data showed a smaller-than-expected rise in weekly US crude inventories. The US crude inventories rose by 1.367 million barrels last week, less than market expectations for a 2.116 million increase. On Tuesday, the API reported a modest 423,000 barrel rise in nationwide inventories.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was down 0.02%, China’s FTSE China A50 (CHA50) lost 0.76%, Hong Kong’s Hang Seng (HK50) was up 1.70% on the day, and Australia’s ASX 200 (AU200) was positive 0.12% on Wednesday.

S&P 500 (US500) 5,104.76 +26.11 (+0.51%)

Dow Jones (US30) 38,661.05 +75.86 (+0.20%)

DAX (DE40)  17,716.71 +18.31 (+0.10%)

FTSE 100 (UK100) 7,679.31 +33.15 (+0.43%)

USD Index 103.37 −0.42 (−0.41%)

• – Australia Trade Balance (m/m) at 02:30 (GMT+2);
• – China Trade Balance (m/m) at 05:00 (GMT+2);
• – Switzerland Unemployment Rate (m/m) at 08:45 (GMT+2);
• – Eurozone ECB Interest Rate Decision at 15:15 (GMT+2);
• – Eurozone ECB Monetary Policy Statement at 15:15 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• – US Trade Balance (m/m) at 15:30 (GMT+2);
• – Canada Trade Balance (m/m) at 15:30 (GMT+2);
• – Eurozone ECB Press Conference at 15:45 (GMT+2);
• – US Fed Chair Jerome Powell Testifies at 17:00 (GMT+2);
• – Eurozone ECB President Lagarde Speaks at 17:00 (GMT+2);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+2);
• – US FOMC Member Mester Speaks (m/m) at 18:30 (GMT+2).

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

As of Tuesday’s stock market close, the Dow Jones Index (US30) decreased by 1.04%. The S&P 500 Index (US500) lost 1.02%. The NASDAQ Technology Index (US100) closed negative at 1.65%. All 3 indices fell off the lows of the week. Weakness in technology stocks impacted the overall market as negative corporate news hamstrung technology stocks. Apple (AAPL) fell more than 2% after Counterpoint Research data showed that iPhone sales in China fell by 24% in the first six weeks of this year. Tesla (TSLA) closed down more than 4%, adding to Monday’s 7% loss after car shipments in China fell. In addition, Advanced Micro Devices (AMD) quotes fell more than 1% after the US government blocked a plan to sell artificial intelligence chips to China.

Today, investors expect Federal Reserve Chairman Jerome Powell to address the US Congress, where he may give clues on the timing and extent of interest rate cuts this year.

The Bank of Canada (BoC) will meet today. The Bank of Canada is forecast to leave the interest rate unchanged at 5%. The highlight of the last Bank of Canada meeting in January was removing the phrase “The Bank remains prepared to raise the policy rate further if needed” from the accompanying statement. History is likely to repeat itself at the current meeting. Recent data showed that Canada’s Q4 GDP was stronger, retail sales were stronger, and the labor market was more robust than expected. The overall CPI fell to 2.9% from 3.4% in December (consensus was 3.3%), and core inflation slowed to 3.3% from 3.6% as expected. According to economists, with such data, the Bank of Canada will not launch its first rate cut until June. The probability of such a scenario is 70%. In the short term, the current meeting is unlikely to change the picture of CAD. Moreover, the decline in CPI may prompt the Bank of Canada to give a more optimistic forecast of disinflation and hint more clearly at the easing of monetary policy. Given the market’s rather conservative assessment of the Bank of Canada’s rate cut, the balance of risks is tilted in favor of a decline in the Canadian dollar.

After hitting an all-time high of $68,970 on Tuesday, bitcoin (BTC/USD) fell more than 7% amid profit-taking by funds. Bitcoin is up more than 63% this year and hit an all-time high on Tuesday thanks to steady inflows into 11 spot bitcoin ETFs that began trading in January and have attracted nearly $8 billion.

Equity markets in Europe were flat yesterday. Germany’s DAX (DE40) was down 0.10%, France’s CAC 40 (FR40) decreased by 0.30%, Spain’s IBEX 35 (ES35) was up 0.47% on Tuesday, and the UK’s FTSE 100 (UK100) closed positive 0.08%.

Silver prices pulled back from a 2-month high to close slightly lower after weaker-than-expected US economic reports on January factory orders. January ISM services were bearish for industrial metals demand.

WTI crude futures are holding near $78 a barrel on Wednesday after losing more than 2% over the past two sessions as weaker demand outweighed an extension of OPEC+ supply cuts. The latest data on factory orders and the US services sector showed signs of a slowdown in US economic activity, adding to fears of weaker energy demand from the world’s largest oil consumer. Analysts also noted a lack of strong stimulus signals from major oil importer China after the country set its growth target for this year at “around 5%”. Meanwhile, major oil producers, including Saudi Arabia, Russia, Iraq, and the UAE, extended voluntary oil production cuts for the second quarter.

Natural gas prices added to Monday’s gains on Tuesday and hit a 1-month high. Natural gas prices have risen since last week after EQT Corp, the largest US natural gas producer, said it would cut net production by 30-40 billion cubic feet through March in response to low prices.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) was down 0.55%, China’s FTSE China A50 (CHA50) was up 1.32%, Hong Kong’s Hang Seng (HK50) lost 1.01% for the day, and Australia’s ASX 200 (AU200) was negative 0.25% for Tuesday.

Hong Kong stocks jumped 1.3% in Wednesday morning trading, partially recovering from a sharp drop the previous day as investors awaited new supportive measures from Beijing following the announcement of China’s 2024 economic growth target of around 5.0% during the opening of the annual plenary session on Monday. The Chinese government also unveiled its annual military budget for this year, which will total 1.67 trillion yuan, up 7.2% from 2023. The Hang Seng Index attempted to break a two-week low, helped by widespread growth across all sectors, including basic materials, industrials, and technology.

The Australian economy grew 0.2% QoQ in 4Q 2023, below the upwardly revised 3Q figure and market estimates of 0.3%. This was the ninth consecutive period of quarterly growth but the slowest pace in the last 5 quarters.

S&P 500 (US500) 5,078.65 −52.30 (−1.02%)

Dow Jones (US30) 38,585.19 −404.64 (−1.04%)

DAX (DE40)  17,698.40 −17.77 (−0.10%)

FTSE 100 (UK100) 7,646.16 +5.83 (+0.08%)

USD Index 103.80 −0.03 (−0.03%)

• – Australia GDP (q/q) at 02:30 (GMT+2);
• – German Trade Balance (m/m) at 09:00 (GMT+2);
• – German Retail Sales (m/m) at 09:00 (GMT+2);
• – UK Construction PMI (m/m) at 11:30 (GMT+2);
• – Eurozone Retail Sales (m/m) at 12:00 (GMT+2);
• – UK Spring Forecast Statement at 14:30 (GMT+2);
• – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+2);
• – Canada BoC Interest Rate Decision at 16:45 (GMT+2);
• – Canada BoC Rate Statement at 16:45 (GMT+2);
• – Canada Ivey PMI (m/m) at 17:00 (GMT+2);
• – US JOLTs Job Openings (m/m) at 17:00 (GMT+2);
• – US Fed Chair Jerome Powell Testifies at 17:00 (GMT+2);
• – Canada BoC Press Conference at 17:30 (GMT+2);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+2);
• – US FOMC Member Daly Speaks (m/m) at 19:00 (GMT+2).

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 stock market close, the Dow Jones Index (US30) was down 0.25%. The S&P 500 Index (US500) decreased by 0.12%. The NASDAQ Technology Index (US100) closed negative 0.41%. Stocks are seeing coverage of previously open positions. Markets await Fed Chairman Powell’s semi-annual testimony before a House committee on Wednesday and a Senate committee on Thursday for clues on future Fed policy. Powell is expected to maintain his hawkish stance and clarify that the Fed is in no hurry to cut interest rates. In addition, Friday will see the release of the monthly US payrolls report, which will provide insight into whether the labor market remains strong and whether wage pressures are contained.

Comments from Atlanta Fed President Bostic expects the Fed’s first interest rate cut in the third quarter to be followed by a pause to assess how the policy change affects the economy. Bostic added that he is concerned that businesses have too much optimism, and after a rate cut, it could spark a surge of new demand that would add to price pressures. Markets rate the odds of a 25 bps rate cut at 2% for the March 19-20 FOMC meeting and 21% for the April 30-May 1 meeting.

Tesla (TSLA) stock price fell more than 7% and topped the list of losers in the S&P 500 (US500) and NASDAQ (US100) after the China Passenger Car Association reported that February shipments of Tesla vehicles in China fell by 15.5% m/m. Apple (AAPL) is down more than 2% after the European Union fined it €1.8 billion ($2 billion) in connection with an investigation that it was shutting out competitors on its platforms. Nvidia (NVDA) shares are up more than 3% to a record high, surpassing Saudi Aramco to become the world’s third most valuable public company behind Apple and Microsoft. Lyft (LYFT) closed higher by more than 4% after RBC Capital Markets upgraded the stock to “optimistic” from “neutral” with a $23 price target.

Equity markets in Europe traded flat on Monday. German DAX (DE40) declined 0.11%, French CAC 40 (FR40) gained 0.28% yesterday, Spanish IBEX 35 (ES35) rose by 0.05% on Monday, and British FTSE 100 (UK100) closed negative 0.55%. European stock exchanges were weak on Monday as investors awaited the European Central Bank’s upcoming interest rate decision. The Central Bank is expected to keep rates unchanged despite weakening inflation.

Swiss inflation fell in February to its lowest level in nearly two and a half years. Consumer prices were 1.2% from a year earlier, down from January’s 1.3%, though slightly above the 1.1% forecast. The SNB met its target from May 2023 despite rising rents, higher sales tax, and energy prices. Lower inflation increases the likelihood that the SNB will cut rates at its next meeting on March 21. The probability that the SNB will cut rates from the current level of 1.75% is estimated by markets at 66%.

WTI crude futures fell to around $78.5 a barrel on Tuesday, declining for a second straight session, as lingering demand concerns overshadowed an extension of supply cuts by OPEC and its allies. Analysts argued that subdued growth in global oil demand is likely to counter OPEC+ production cuts, raising questions about its output policy. Investors also priced in developments at a key policy meeting in China, where the government set its economic growth target 2024 at around 5%, matching expectations.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) jumped 0.50%, China’s FTSE China A50 (CHA50) declined 0.13%, Hong Kong’s Hang Seng (HK50) gained 0.04% on the day, and Australia’s ASX 200 (AU200) was negative 0.13% on Monday.

China’s Caixin Services PMI fell to 52.5 in February 2024 from 52.7 in January. It was the 14th consecutive month of growth in service sector activity but the slowest pace since November last year amid subdued growth in total new work. The growth rate in new orders changed little and remained below the 2023 average.

Jibun Bank’s Japan Services PMI was revised upward to 52.9 in February 2024 from 52.5 after a four-month high of 53.1 in January. This marked the 18th consecutive month of growth in the services sector, helped by the sharpest rise in new business starts since August last year due to tourism demand and new product launches. However, growth was mainly driven by domestic demand.

Final data showed that the Judo Bank Flash Australian Services PMI business activity index rose to 53.1 in February from 49.1 in the previous month. This was the first rise in service sector activity in five months and the fastest since April 2023, as renewed growth in new orders led to a rebound in business activity. Improving demand conditions boosted activity in the services sector, with improved economic conditions and increased inquiries contributing to another rise in new work. New export orders also returned to growth for the first time since September 2023, supported by new customers and increased interest from customers in Asia.

S&P 500 (US500) 5,130.95 −6.13 (−0.12%)

Dow Jones (US30) 38,989.83 −97.55 (−0.25%)

DAX (DE40)  17,716.17 −18.90 (−0.11%)

FTSE 100 (UK100) 7,640.33 −42.17 (−0.55%)

USD Index 103.83 −0.03 (−0.03%)

• – Australia Services PMI (m/m) at 00:00 (GMT+2);
• – Japan Tokyo Core CPI (m/m) at 01:30 (GMT+2);
• – Japan Services PMI (m/m) at 02:30 (GMT+2);
• – China Caixin Services PMI (m/m) at 03:45 (GMT+2);
• – Germany Services PMI (m/m) at 10:55 (GMT+2);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+2);
• – UK Services PMI (m/m) at 11:30 (GMT+2);
• – Eurozone Producer Price Index (m/m) at 12:00 (GMT+2);
• – US ISM Services PMI (m/m) at 17:00 (GMT+2);
• – US FOMC Member Barr Speaks (m/m) at 19:00 (GMT+2);
• – US FOMC Member Barr Speaks (m/m) at 22:30 (GMT+2).

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.