Daily Digest: Tuesday 2nd April
USA
US equity losses worsened throughout Tuesday, as the Dow, S&P 500, and Nasdaq 100 all closed down. The Dow ($INDU) led losses, falling 1% to 39,170.24, the S&P 500 ($SPX) fell 0.72% to 5,205.81, and the Nasdaq 100 ($NDX) fell 0.94% to 18,121.78.
A seemingly productive call between US President Biden and the Leader of China Xi Jinping took place Tuesday afternoon, the first direct contact between the two leaders since last November. It was announced that US Treasury Secretary Yellen and Secretary of State Blinken are to visit China later this year, as the leaders agree to maintain ‘stable’ ties. This could be indicative of an easing in tensions between the two nations, however, the US elections later this year may undo any diplomatic progress.
Europe
European traders returned to their desks on Tuesday morning following the Easter Break. The FTSE 100 (FTSE) managed to break the 8,000 level for the first time, before the index fell back to 7,935.09 by the close, marking a 0.22% session price decrease. Daily FTSE performance was in no way supported by the Nationwide’s house price index figures for March. The release indicated a 0.2% decline in the price of houses sold through the month, with a slowdown in market activity driven by interest rate pressures, as mortgage approvals remain low. This affected UK property developers, as Persimmon (PSN.L) fell 3.5%, Berkeley Group (BKG.L) fell 2.27%, and Taylor Wimpey (TW.L) extended their ex-dividend declines, falling a further 3.06%. UK manufacturing PMI figures for March came in at 50.3 against analyst expectations of 49.9, signalling a positive expansion of manufacturing activity, though the release failed to significantly influence market direction.
Performances across mainland Europe trended in the same direction. The German DAX (€GDAXI) led declines falling 1.13% to 18.283.13. This was followed by the French CAC (€FCHI) which fell 0.92% to 8,130.05, and the Pan-European STOXX 600 (€SXXP) fell 0.80% to 508.57. Additionally, March manufacturing PMI figures for Europe were released on Tuesday, signalling that economic activity remained weak at 46.1, though this was comfortably above expectations of 45.7.
Rest of the World
The Nikkei 225 (¥N225) managed to build some much needed upward momentum through the session, breaking briefly above the 40,000 level, before falling back to 39,838.91. The move marked a 0.09% session price increase, as traders continue to contend with yen uncertainty. After trading around ¥151.35 on Monday, Yen declines continued, as the currency fell to ¥151.553 against the US dollar as of 19:20 GMT. Since trading opened on January 1st the Yen has now fallen from the ¥141 level against the Dollar, as a sustained depreciation has repeatedly raised questions over possible BOJ open market interventions.
Chinese equities stumbled following yesterday’s data prints, despite both manufacturing and non-manufacturing PMI figures signalling healthy expansions during March. The Shanghai Stock Exchange Composite Index (¥SSE) fell 0.08% to 3,074.96. Meanwhile, Hong Kong’s Hang Seng Index (HK$HSE) rose 2.36% to 16,931.52, backed by stronger economic outlooks.
The Indian Nifty 50 (₹NSEI) traded marginally lower through Tuesday, closing 0.04% down at ₹22,453.30.
Cryptocurrencies
The total market capitalisation of the cryptocurrency market fell from $2.62 trillion on Monday evening to $2.48 trillion at the same time on Tuesday, marking a $140 billion dollar 24hr decrease. Bitcoin prices continued to break previous support levels falling as low as $64,550, before rebounding to $65,920.92, a 5.38% decline.
'Crypto Stocks'
Coinbase ($COIN) and MicroStrategy ($MSTR) continued to trade down falling 2.49% and 3.54% respectively.
Commodities
Crude Oil managed to breakout above the $84 level, after testing the level throughout Monday’s session. Prices rose to intraday peaks of $85.46 per barrel, before falling back to $85.14 by 21:00 GMT, a 1.71% 24hr increase. As noted yesterday there hasn’t been any significant advancements in terms of news, with direction driven by a cumulation of ongoing supply and demand pressures. Geopolitical tensions caused by conflicts remain at the forefront of trader sentiment. The focus being Israel’s war against Hamas and subsequent attacks in the Middle East, while Russia’s ongoing conflict against Ukraine extends supply-side threats across Eastern Europe.
Gold prices managed to break new highs, rising a further 1.81% to $2,298 per ounce, marking a 9th consecutive session of gains. Momentum remains driven by interest rate expectations, guided by weaker inflation outlooks.
What to watch
Eurozone Core CPI Flash Estimate (YoY)
US Crude Inventories
Fed Chair Powell Address
Sources:
https://uk.finance.yahoo.com/world-indices/
https://uk.finance.yahoo.com/commodities
https://www.londonstockexchange.com/indices/ftse-100
https://www.binance.com/en-GB/price/bitcoin
https://www.binance.com/en-GB/price/ethereum
https://qontigo.com/index/sxxp/
Stock Market Activity Today & Latest Stock Market Trends | Nasdaq
https://coinmarketcap.com/charts/#market-cap
https://www.forexfactory.com
Definitions:
YoY - Year on Year, or, Year over Year
MoM - Month on Month, or, Month over Month
QoQ - Quarter on Quarter, or, Quarter over Quarter
ECB - European Central Bank
BOJ - Bank of Japan
Fed - Federal Reserve
BOE - Bank of England
SNB - Swiss National Bank
DOJ - Department of Justice
PMI - Purchasing Managers Index