Daily Digest: Tuesday 26th March
USA
The three major US indexes closed down for a second consecutive session. The Nasdaq 100 ($NDX) fell 0.36% to 18,210.54, while the S&P 500 ($SPX) fell 0.28% to 5,203.58, and the Dow ($INDU) fell 0.08% to 39,282.33.
US tech giant Apple’s woes continued this week, as shipments of the firms products into China fell 33% during February. As noted on March 5th, sales declines in China come as consumers begin to shift their preferences from foreign to domestic tech suppliers. Following the news, Apple ($AAPL) shares fell 0.67% to $169.71, marking a 3.44% share price decrease during the last week of trading. A slowdown in Chinese market activity adding to the downward momentum started last week upon the announcement of a US DOJ investigation into the firm for anti-competitive practices.
Baltimore, a seaport located in Maryland also made headlines after a container ship collided with a road bridge on Tuesday morning, causing the structure to collapse. A state of emergency was issued, and a search and rescue operation was launched to locate several missing persons. There is currently no evidence of foul-play causing the incident. Though this remains primarily a humanitarian problem, because of the location both shipping and road transport has been halted, affecting both industrial operations and supply chains. Though shipping delays should be short term, the loss of roadways in the area will likely cause ongoing disruption into the future as a total rebuild is necessary.
Europe
The general trend across European markets was positive, though activity is expected to be mixed across Non-US indexes throughout the week. This comes as traders await the US PCE (Personal Consumption Expenditure) print on Friday, one of the nations leading inflation indicators, which should exert some influence the direction of the Fed's monetary policy. The FTSE 100 (FTSE) erased yesterday’s losses, rising 0.17% to 7,930.96, as the index approaches the 8,000 level. Gains were fairly spread with 65 index constituents closing up, 2 sitting unchanged, and the remaining 33 closing down. The STOXX 600 (€SXXP) broke new all-time highs, rising 0.24% to close at 511.09, while the French CAC (€FCHI) rose 0.41% to 8,184.75, and the German DAX (€GDAXI) rose 0.67% to 18,384.35.
Rest of the World
Downward momentum continued across Japanese markets as the Nikkei 225 (¥N225) fell, as Yen struggles persist. The Japanese benchmark index fell 0.04% to 40,398.03, while the Yen was trading against the US dollar at ¥151.293 as of 11:11am GMT. Despite the currency marginally appreciating from its levels yesterday afternoon, trading remains weak. This comes as wider uncertainty seems to be spreading regarding the direction of Japanese policymakers toward currency market intervention. Japanese YoY Core CPI figures for February stoked poor performances, with figures falling 2.3%, 0.2 percentage points under analyst expectations. The print signals that inflationary pressures within the Japanese economy are weaker than expected, especially when considering January’s core CPI reading of 2.6%. ultimately, this suggests the BOJs rate hiking cycle may be short-lived, with inflation only 0.3 percentage points above target levels, and inflationary controls seemingly yielding results.
Trading on the Shanghai Stock Exchange Composite Index (¥SSE) strengthened throughout Tuesday, as the index rose 0.17% to 3,031.48, as momentum seemed to turn from Monday. Meanwhile, the Indian Nifty 50 (₹NSEI) eliminated Monday’s gains falling 0.42% to 22,004.70.
Cryptocurrencies
Momentum across cryptocurrencies slowed through Tuesday, with total market capitalisation falling from $2.64 trillion USD on Monday evening to $2.63 trillion. Bitcoin lost some ground, falling 1.51% to $69,827.75, though prices have held strong above the $69,000 support level. In terms of altcoins, Ethereum, Solana, and Binance Coin fell almost in tandem, losing 1.3%, 1.33%, and 2.25% respectively. Ripple suffered a sharper price decline, falling 3.04% during the last 24 hours, while Cardano held stronger only falling 0.4% across the same period.
'Crypto Stocks'
It now almost comes as expected that the direction of US listed ‘crypto stocks’ will, in some way, mimic that of the wider cryptocurrency market. After a slower day mentioned above, US listed cryptocurrency exchange Coinbase Global Inc ($COIN) shares fell 4.61%. While MicroStrategy ($MSTR) continued to benefit from a strengthening of Bitcoin prices at the $69,000 level, with shares rising 1.13%. This is the case as MicroStrategy are directly exposed to the price movements of Bitcoin, which fell as low as $60,000 last week triggering a share sell off, as the value of the firms balance sheet assets had fallen.
Commodities
Crude Oil experienced sustained sell offs through Tuesday, erasing just under half of Monday’s gains. Prices fell 0.88% to $81.23 per barrel, a figure which will likely be impacted by tomorrow’s US inventories release, which analysts expect to show a further 0.7 million barrel drawdown.
Gold traders lacked any real catalysts for change through Tuesday, as prices rose by only 0.03% to $2,177 per ounce. This comes as markets await Friday’s US PCE release. If inflation remains in line with expectations, traders with long exposure should benefit, as the likelihood of Fed rate cuts increases. This comes as the Monetary Policy committee receive the additional confirmations they have been targeting. As previously noted, a decrease in interest rates reduces the opportunity of cost associated with holding Gold, especially as the yields on ‘low risk’ investments such as bonds typically decrease.
What to watch
US Crude Inventories
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