Daily Digest: Friday 12th April
USA
US market direction was clear through Friday, with all three major indexes closing down more than 1% from their opening prices. The Nasdaq 100 ($NDX) led declines falling 304.49 points (1.66%) to 18,003.49, the largest single session price decrease since March 5th. The S&P 500 ($SPX) followed closely behind falling 75.65 points (1.46%) to 5,123.41, while the Dow ($INDU) fell 475.84 points (1.24%) to 37,983.24.
US earnings season is now in full swing, kicked off on Friday by US financial sector giants, JP Morgan ($JPM), Wells Fargo ($WFC), Citigroup ($C), and BlackRock ($BLK). Investors appeared underwhelmed by the earnings calls and current financial outlooks, sending shares in JP Morgan down 6.47%, BlackRock down 2.87%, Citi down 1.7%, and Wells Fargo down 0.39%.
US Chipmakers also experienced share price declines through Friday, as the market was hit with news that Chinese authorities had instructed domestic telecoms manufacturers to begin to end the use of foreign semiconductors and microchips in place of domestically produced substitutes. Shares in Nvidia ($NVDA) fell 2.68%, while AMD ($AMD) fell 4.23%, and Intel ($INTC) fell 5.16%. A block on US manufactured chips poses specific risks to the companies named above, as one of the largest non-domestic semiconductor markets is closed off. However, it is important to note that US chip manufacturers already face strict export restrictions into China, which have hampered operations and proven costly in terms of R&D required to meet the government enforced boundaries.
Europe
The UK’s benchmark index , the FTSE 100 (FTSE), broke record highs through Friday, reaching 8,044.98. Prices broke resistance at the 8,000 level before consolidating near the close, marking a 71.78 point (0.91%) session increase 7,995.58. FTSE movements benefitted from a rise in commodity market activity with seven of the top nine individual constituent performances coming from companies involved in the mining of precious metals and earth materials, supply of energy products, and distribution of energy products. The three largest gainers were mining giants Fresnillo PLC (FRES.L) at 7.61%, Glencore PLC (GLEN.L) at 5.10%, and Anglo American PLC (AAL.L) at 3.67%.
The STOXX 600 (€SXXP) followed a similar directional trend, rising 0.7 points (0.14%) to 505.25. Prices managed to break through the 510 level twice, however downward pressure, likely caused by traders booking profits saw a reversal, with the index falling below support at the 505.50 level. The French CAC (€FCHI) and German DAX (€GDAXI) didn’t fare quite so well, falling 12.91 points (0.61%) and 24.16 points (0.13%) respectively. The DAX will trade into Monday at 17930.32, while the CAC will open at 8,010.83.
Rest of the World
The Nikkei 225 (¥N225) rose 80.92 points (0.21%) to 39,523.55 on Friday. Despite stronger earlier gains, after three tests of the 39,700 level prices were rejected, and the index fell back to support around the 39,500 level into the close. The situation for the Japanese Yen has remained mostly unchanged, with no major developments in terms of intervention or price action. As of 18:18 GMT, the currency was trading against the US Dollar at 153.1250. A depreciation of the Yen, as noted previously, should theoretically have positive implications for the Nikkei 225, as Japanese equities become relatively cheaper for overseas investors.
The Shanghai Stock Exchange Composite Index (¥SSE) failed to capitalise on Thursday’s uptick, falling 14.77 points (0.49%) through the session to 3,019.47. The 3,030 level flipped for the third consecutive session, once again becoming a level of technical resistance as traders failed to break 3,042. Meanwhile, the Indian benchmark index the Nifty 50 (₹NSEI) experienced its largest session decline of April, falling 234.4 points (1.03%) to 22,519.40.
Commodities
WTI crude prices bounced back from a small sell-off on Thursday, as the situation in the Middle East remains contentious after an Israeli airstrike on an Iranian target in Syria. A possible escalation of the ongoing conflict between Israel and Hamas continues to drive supply side uncertainty. As of 21:00 GMT, WTI prices had risen 0.52% to $85.46 per barrel, with prices having briefly broken through yesterday’s resistance at the $86 level. Rising energy prices have continued to apply pressure to central banks globally, as attempts to contain consumer inflation are hampered by adverse market movements.
Gold prices took a move to the upside through the morning breaking new all-time highs at $2,488.80 per ounce. However, a change in sentiment drove prices just over $100 lower to $2,352. As of 21:00 GMT prices had settled at $2,360.60, marking a 0.51% 24hr decline.
Another notable mention in terms of previous metals was Silver, as spot prices broke new all-time highs $29.905 before a similar reversal to Gold.
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