Daily Digest: Monday 4th March
USA
Index performance through the session was somewhat subdued, the three main US indexes all closed down. The Nasdaq 100 ($NDX) led losses falling 0.42%, while the Dow($INDU) lost 0.25% and S&P 500 ($SPX) 0.12%. Investors lacked any real catalysts for movement, with some consolidation occurring after a stronger finish on Friday. US markets now await the release of February’s Non-Manufacturing PMI figures which analysts expect to come in around 53.
US low-cost airlines, Spirit ($SAVE) and JetBlue ($JBLU) have agreed to terminate their merger, based on current regulatory conditions it is unlikely a deal could be completed before the July deadline outlined in the merger agreement. Spirit shares experienced a T1 halt before the open, indicating the pending release of market moving news. Off the back of the announcement Spirit’s pre-market prices fell up to 19%, while JetBlue pre-market shares traded up >4.5%.
Spirit shares continued their decline through the session, closing at $5.76, a session loss of 10.84%. Meanwhile, shares in JetBlue rose 4.33% to $6.75. Aside from the market, there are some negative implications for consumers, with the purpose of the merger being to form a low-cost alliance, providing cheaper domestic air travel across the US, competing with the likes of American Airlines ($AAL), Delta ($DAL), Southwest ($LUV), and United ($UAL).
Former US president Donald Trump took his first real setback on his run for the Republican nomination Sunday, losing the Washington DC primary to Nikki Haley. Haley has struggled to gain some much needed momentum if she is to materially challenge Trump, a position weakened by the loss of her home state primaries in South Carolina last week. The blow to Trump was softened by a Supreme Court ruling on Monday which will allow him to appear on the primary ballots of Colorado, Maine, and Illinois, the three states that barred him, citing his involvement in the 2021 Capitol attacks and the 14th Amendments Insurrection Clause.
Europe
The FTSE 100 (FTSE) had a relatively lacklustre session, retracing most of Friday’s gains falling 0.55% to 7,640.33, as traders continue to speculate on the direction of Wednesday’s UK Spring budget.
Barclay’s and Citigroup have joined other financial institutions in updating their position on BOE rate cuts, the former pushing expectations back from a March cut to June, while Citigroup have pushed predictions to the back end of their Summer estimate range. This has shown that the growing consensus amongst institutions is that the BOE are to remain cautious of persisting inflationary pressures, awaiting further validation on policy success before moving to initiate the rate cutting cycle. This seems to be in line with the general stance of key central banks internationally, heading into their March meetings.
There was little movement across European markets with the STOXX 600 (€SXXP) closing down 0.034% or €0.17, while the DAX (€GDAXI) closed at a loss of 0.11%. Meanwhile French markets saw some buyside movement with the CAC (€FCHI) gaining 0.28%, closing at €7,956.41. All three indexes are now trading just below their respective all-time highs, with momentum slowing through a week of economic data print pressure.
Rest of the World
The Nikkei 225 (¥N225) made history during trading, reaching new all-time highs, closing above ¥40,000. The index rose 0.5% through Monday’s session, going into Tuesday priced at ¥40,109.23. This milestones shows investor confidence toward Japanese equities is far from waning, with index gains supported by a charge in global tech demand.
The shanghai Stock Exchange Composite Index (¥SSE) also rose on Monday, closing at ¥3,039.31. The 0.41% rise marks a third consecutive session of gains for the index as Chinese politicians and regulators work to stabilise and restructure markets. Changes driven largely by significant foreign capital outflows, the result of slower economic growth, sharper regulation, and a mismatch between investors required returns and market performance.
Cryptocurrencies
Bitcoin crossed $65,000 during morning trading for the first time since 2021, driven by sustained growth in investor demand as traders continue to price in factors including the ‘halving’ and increased ETF inflows, while a growing degree of ‘FOMO’ seems to be present as prices storm toward the all-time highs of around $69,000. Prices peaked at $67,770 before pulling back to $67,355 .Ethereum also continued a strong streak of gains, rising to session highs of $3,610.
The Altcoin market has seen considerable capital inflows throughout the last week as investors seek to capitalise on wider market movements, the top performers on Monday (as of 20:45gmt) included Ripple rising 3.54% Cardano rising 6.4%, Dogecoin rising 16.73%. While meme coin Shiba Inu took the top spot in terms of 24hr gains, rising 43.43% as its market cap approaches $20bn.
As noted last week, there has been some spillover in market activity with numerous ‘Crypto Stocks’ benefiting from a rise in both crypto demand and prices, Michael Saylor’s MicroStrategy ($MSTR) shares rose 23.59% through trading, breaking new 52-week highs. With investors in cryptocurrency exchange Coinbase ($COIN) seemingly unphased by last weeks service outages, as shares rose 11.36% to $229.15 breaking 52-week highs, an all too familiar saying in the current cycle.
Commodities
The Organisation of the Petroleum Exporting Countries (OPEC+) announced the extension of their current Crude production cuts through to June 2024 on Sunday. After a brief rise to $80.40 per barrel, traders experienced pushbacks with Crude prices falling back 1.51% to $78.76 through Monday.
After reaching all-time highs on Friday, Gold prices continued to rally throughout Monday rising a further 1.46% to $2,126.20 per ounce. As mentioned before, interest rate cuts are being priced in for June by most market participants, with a decrease in rates benefiting the Gold market as the opportunity cost associated with holding the asset are lower.
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/
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