Morning wrap (01.02.2024)

• Wall Street indices slumped during cash session yesterday, reacting to disappointing tech earnings released on Tuesday evening and to yesterday's FOMC meeting
• S&P 500 dropped 1.61%, Nasdaq slumped 2.23% and Dow Jones closed 0.82% lower. Small-cap Russell 2000 plunged 2.63%
• FOMC left interest rates unchanged and did not make any adjustments to the pace of quantitative tightening. Fed Chair Powell strongly hinted during the post-meeting press conference that Fed may not have enough confidence by March meeting to cut rates
• Goldman Sachs now expects the first Fed rate cut to be delivered at May meeting. JPMorgan sees first rate cut in June, but does not rule out possibility of a May cut. Fitch does not expect cuts until June or July meetings
• Indices from Asia-Pacific traded mixed today - Nikkei dropped 0.9%, S&P/ASX 200 traded 1.2% lower, Kospi rallied 1.7% and Nifty 50 added 0.3%
• Indices from China traded mixed in spite of Chinese President Xi urging for quicker expansion of productive forces 
• European index futures point to a lower opening of the cash session on the Old Continent today
• United States conducted strikes on Houthi drone sites in Yemen overnight
• Bank of Japan purchased government bonds worth 5.95 trillion JPY in January 2024, the smallest monthly purchase since June 2023
• Japanese manufacturing PMI index ticked higher from 47.9 to 48.0 in January (exp. 48.0), confirming flash release
• Chinese manufacturing PMI index stayed unchanged at 50.8 in January (exp. 50.7)
• Australian building approvals slumped 9.5% MoM in December (exp. +1.0% MoM)
• Cryptocurrencies trade lower this morning - Bitcoin drops 1.2%, Ethereum trades 0.8% lower and Dogecoin declines 0.3%
• Energy commodities trade higher - oil gains 0.1% while US natural gas prices trade 1% higher
• Precious metals pull back - silver drops 0.2%, platinum trades 0.3% lower and palladium declines 0.4%. Gold is an outperformer with 0.2% gain at press time
• USD and JPY are the best performing major currencies, while AUD and CHF lag the most

S&P 500 futures (US500) dropped to the lowest level since January 19, 2024 after Fed Chair Powell hinted that March rate cut is not the base case scenario. Source: xStation5