Daily Digest: Monday 25th March
USA
US index activity remained weak throughout Monday, as downward momentum from Friday persisted. The Dow ($INDU) led declines falling 0.41% to 39,313.64, while the Nasdaq 100 ($NDX) fell 0.34% to 18,277.06, and S&P 500 ($SPX) fell 0.31% to 5,218.19.
Notable upward movements once again stemmed from the tech sector. Despite a weak performance on Friday shares in the newly listed community based social media chat site Reddit ($RDDT) surged through Monday. A change in sentiment saw prices rise 30% to $59.80, erasing Friday’s 8.91% loss, putting shares $25.80 (75.88%) above their $34 offering price. Trading suggests that at least in the short-term, concerns over the firm’s revenue streams and current profitability figures remain somewhat insignificant.
Shares in the US microchip manufacturer Micron ($MU) continued their advances, following a slightly subdued session on Friday. Prices broke new all-time highs of $121.41, before falling back to $117.13 at the close, marking a 6.28% session increase. This move follows the firms earnings call last Wednesday, which signalled both stronger than expected YoY growth and revenue forecasts.
Nvidia ($NVDA) shares also managed to close the session higher, rising 0.76% to $950.02. At its intraday peak, shares were only $6.34 shy of the firms all-time highs, as traders price in stronger sector outlooks, a position reinforced by positive earnings call across the industry.
Crisis-stricken aerospace manufacturer Boeing ($BA) also saw upward share price movements through Monday, with prices closing 1.36% higher. This comes as traders and investors price in the news that the firms current CEO, Dave Calhoun, would be departing from the firm. The exit follows a tough year for the company, marked by order delays, cancellations, and growing quality control and aircraft safety concerns. Issues exacerbated by the ongoing impacts of the Covid019 pandemic and January’s Alaska Airlines inflight door malfunction.
Europe
Activity across European markets was weak on Monday. The UK’s FTSE 100 (FTSE) fell 0.17% to 7,915.57, as uncertainty over 2024’s BOE rate cut expectations continues. This shift comes as a BOE official signalled that the markets expectation’s for rate cuts during FY24 is higher than possible. Fewer-than-expected rate cuts naturally means rates remain higher for longer. This situation holds the cost of borrowing for both corporates and consumers high, slowing business investment and growth. Furthermore, higher rates hamper consumer spending, as cash savings are incentivised by higher current account rates, and those with high equity market exposure typically have lower levels of disposable income as their asset performance is muted.
The mainland European STOXX 600 (€SXXP) rose 0.043% to 509.86, while the German DAX (€GDAXI) rose 0.3% to 18,261.31, and the French CAC (€FCHI) fell 0.0039% to 8,151.60.
Rest of the World
Nikkei 225 (¥N225) performance weakened into a new week of trading, as the index fell 1.16% to 40,414.12, the first session decline in over a week. The Japanese Yen has remained unstable, trading against the US dollar at ¥151.344 as of 15:15 GMT, with traders beginning to consider the implications of central intervention to strengthen the Yen.
In China, the Shanghai Stock Exchange Composite Index (¥SSE) fell 0.71% to 3,026.31, while trading on the Indian Nifty 50 (₹NSEI) continued upwards, with the index rising 0.39% to 22,096.75.
Cryptocurrencies
Cryptocurrency performances were weak across the market through Thursday and Friday, as trading pushed total market capitalisation to $2.43 trillion on Friday. However, momentum began to build over the weekend, with the total market cap rising around $210 billion USD to $2.64 trillion. Bitcoin managed to break the $70,000 level for the first time in a week, rising 7.14% between 21:00 GMT Sunday and the same time Monday, with prices reaching $70,892.22.
'Crypto Stocks'
US listed exchange Coinbase Global Inc ($COIN) seemed to benefit from this surge in momentum, with shares rising 9.47%, reaching new 52-week highs before falling back to $279.71. MicroStrategy ($MSTR) also managed to erase last week’s losses, as shares rose to new 52-week highs, closing at $1,856, marking a 21.86% session increase.
Commodities
Crude Oil prices have once again crossed the $81 per barrel level, as supply side shocks continue. Prices rose 1.62%, trading at $81.94 per barrel by 21:00 GMT. This occurred as Russia began the enforcement of domestic output cuts, in line with OPEC+ production expectations. This comes as Russian production already faces restrictions, following Ukrainian drone attacks on industry infrastructure, while demand begins to rise due to stronger economic growth outlooks across the globe.
Despite ongoing noise surrounding analyst rate cut expectations for the major central banks, Gold prices continued to increase, rising 0.56% from Sunday’s futures trading, to $2,172.10 per ounce.
What to watch
BOJ Core CPI
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
CPI - Consumer Price Index
PPI - Purchasing Price Index
ETF - Exchange Traded Fund