Daily Digest: Tuesday 27th February
USA
The US Treasury Secretary, Janet Yellen spoke at a news conference during her visit to São Paulo, ahead of this week’s G20 Finance & Central Bank Governors meetings. She reiterated her positive stance on global economic growth, appearing fairly dovish, in support of Biden’s economic policy, a leading factor in strong US GDP growth.
US consumer confidence figures have fallen to 106.7, whilst analysts’ consensus expected 115. At face value, the outlook appears somewhat dreary; however, the fall may signal a slowdown in economic growth to the FED, inviting the monetary policy committee to begin revising their stance on rates.
The S&P 500 and Nasdaq 100 managed to rise during Tuesday’s session, up 0.17% and 0.21% respectively. Meanwhile the Dow struggled to build any real momentum during the session, falling 0.25%. It should be interesting to see whether tech driven momentum will re-establish itself toward the end of the week, as investors become increasingly weary over valuations.
Europe
The FTSE 100 (FTSE) closed its second consecutive session down, falling 0.017% to 7,683.02. Meanwhile, Europe’s STOXX 600 (STOXX) traded 0.16% higher at €496.33 spurred on by the global AI boom and strong tech sector outlook. Tuesday marked the STOXX 600’s second highest close, trading only €1.41 off its all-time high.
Reports have surfaced suggesting that Chinese-Singaporean clothing giant Shein may be looking to IPO in London, pursuing additional equity market financing. Shein’s efforts to raise capital in the West have been burdened by ever more stringent regulation, exacerbated by volatility in US-China relations. Before we as UK investors get too carried away, it must be considered that, due to the scale and positioning of the firm, news of a London float may be an attempt to gain bargaining power, loosening the position of US regulators. Considering that New York was the primary target for the firm, this brings into question the likelihood of a UK listing.
Rest of the World
Japanese Core CPI released last night coming in at 2%, 0.1 percentage points above analyst expectations. It is important to note that despite exceeding expectations, CPI has still fallen 0.3 percentage points since January. The release has placed BOJ monetary policy adjustments at the centre of talk between market commentator’s, as the end of the negative interest rate policy becomes increasingly likely.
Trading into economic headwinds, the Nikkei 225 (N225) closed down by ¥21.26 or 0.054%.
In China, the Shanghai Stock Exchange Composite Index had a strong session, closing up 1.29%, pulling the index closer to its December 2023 valuations.
Cryptocurrencies
Bitcoin managed to continue its meteoric rise, increasing a further 4.23%, trading at $56,800 at the time of writing. Prices cooled off into Tuesday evening, falling from a 24 hour high of $57,500. Bitcoin is now trading at its 2021 level, as traders act defiantly across the crypto market.
Ethereum managed a more modest daily increase of 2.17%, trading at $3,252, just off its 52 week high of 3,287 achieved earlier this afternoon.
Off the back of a trending market, key crypto focussed equities put in a strong performance on Tuesday. Coinbase ($COIN) shares rose 2.72%, MicroStrategy ($MSTR) prices increased 9.46%, and Marathon ($MARA) shares rose 3.84%.
Commodities
Crude prices rose 1.44% throughout Tuesday, as geopolitical tensions and the escalation of issues in the Middle East remain at the forefront of investors focus. The Red Sea remains a particular point of concern for traders, as Houthi Rebel attacks continue despite the efforts of International Taskforces.
Gold traders failed to find any real footing on Tuesday, with prices only increasing 0.02%, acting as only a small consolation from Mondays 0.31% decline.
What to watch
Salesforce Inc Earnings ($CRM)
Prelim US GDP data
G20 Finance Minister & Central Bank Meetings
Sources:
https://uk.finance.yahoo.com/world-indices/
https://uk.finance.yahoo.com/commodities
https://uk.finance.yahoo.com/quote/BTC-USD?.tsrc=fin-srch
Stock Market Activity Today & Latest Stock Market Trends | Nasdaq
https://qontigo.com/index/sxxp/
https://www.londonstockexchange.com/indices/ftse-100