- The last trading session of the week in European and US markets is positively. Stock indexes mostly posted intraday gains, largely influenced by a "dovish" macro environment and a rebound after the declines seen in the first half of the week.
- The S&P 500 index has already gained nearly 1% and climbed to new historic highs. The Nasdaq 100 has also climbed ATH and is trading up 1.5%. Technology companies like Google and Nvidia are doing great today
- After very strong Q4 2023 results and even stronger guidance, the shares of the maker of server racks used in data centers, Super Micro Computer gain more than 34%. The AI trend is still a profound for Nasdaq
- The strength of market bulls today was driven by a combination of upbeat University of Michigan reading, indicating a faster-than-expected decline in inflation expectations, with continued consumer optimism:
University of Michigan Sentiments prelim: 78,7 vs 70,1 exp. and 60.9 previously
Expectations prelim: 75.9 vs 67 exp. and 67.4 previously
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Create account Try a demo Download mobile app Download mobile appCondition prelim: 83.3 vs 73 exp, and 73.3 previously
UoM 5-yr inflation expectations: 2.8% vs 3% exp. and 2.9% previously
UoM 1-yr inflation expectations: 2.9% vs 3.1% exp and 3.1% previously
- Also comments from the chairman of the Chicago Federal Reserve, Austan Goolsbee came in quite dovish compared to previous Fed officials. Goolsbee signaled that, Fed will probably cut rates as progress on inflation will be continued
- Oil declines 0.5% today, reducing 'inflationary risks'. Gold rises by 0.2% and USDIDX loses slightly 0.1%
- Futures on NATGAS deepens declines after rollover by 10%, to 2,25 USD per MMBtU
- On the other hand, however, rising yields on U.S. debt securities are somewhat halting the bullish momentum in the market. At the moment, the money market is pricing that the Fed will cut rates at its March meeting by 25 basis points, with a 45% probability. However, the data is not particularly optimistic, as just a week ago the values reached 77%.
- BlackRock analysts, similar to Fitch Ratings, expect 3 Fed rate cuts, by 25 bps in 2024.
- In the currency market, the Australian dollar and the Canadian dollar are currently the best performers. We are also seeing sizable increases on pairs linked to the US dollar. The New Zealand dollar and the Swiss franc are currently trading under downward pressure on the broad market.
- Cryptocurrencies are trading another weaker session today, with Bitcoin settling near $40,000.
- The crypto market's concerns are related to the ongoing sell-off of BTC reserves by the Grayscale fund, which once again deposited nearly $530 million worth of BTC on Coinbase today
- The U.S. Treasury Department reported about constructive talks, in Beijing. Talks with representatives of China's financial sector are to continue and take place periodically.
Source: xStation5
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