Daily Digest: Wednesday 27th March
USA
US trading activity picked up through Wednesday as indexes erased the week’s losses. The Dow ($INDU) led gains rising 1.22% to 18,280.84, while the S&P 500 ($SPX) rose 0.86% to 5,248.49, slightly short of its all-time highs. The Nasdaq 100 ($NDX) trailed behind in terms of gains rising 0.39% to 18,280.84.
Reddit ($RDDT) shares took a tumble on Wednesday, as post-IPO volatility continues. Shares fell 11.3% to $57.75, although shares still sit 69.85% above their offering price. On the theme of IPOs, Trump Media & Technology Group ($DJT) shares rose a further 13.95% to $66.22 during their second day of trading, pushing the firm’s market capitalisation to around $7.5bn. This comes as investors strengthen positions in the corporation owning the Former President’s 'Truth Social', social media platform.
Europe
Trading across Europe was somewhat muted for the third day running. The UK’s FTSE 100 (FTSE) saw a marginal increase through trading, rising 0.013% to 7,931.98. While the British Pound managed to appreciate against the dollar, rising to $1.2631 by 19:15 GMT, from its opening value of $1.2629.
FTSE 100 gains were led by Smith DS PLC (SMDS.L) and Diploma PLC (DPLM.L) whose shares rose 10.23% and 9.46% respectively. Movement across the two firms was driven by acquisitions news, Smith PLC (packaging) received a buyout bid from multinational conglomerate International Paper (0JCB.L). Meanwhile, Diploma PLC, a ‘value add distribution group’, completed the acquisition of Peerless Aerospace, adding to the firms value chain.
Equity index movements across the continent were similarly uninspiring, despite the STOXX, DAX, and CAC all breaking new highs at their intraday peaks. The Pan-European STOXX 600 (€SXXP) rose 0.13% to 511.75. While The German DAX (€GDAXI) saw a slightly larger move, pushing 0.5% higher to 18,477.09, and the CAC 40 (€FCHI) rose 0.25% to 8,204.81.
Rest of the World
The Nikkei 225 (¥N225) continued to rally through Wednesday, as traders await Thursday’s Tokyo area CPI release. The index rose 0.9% to 40,762.73, with prices eyeing new all-time highs. The picture for the Japanese Yen worsened during the Asian session, with the currency reaching new 30 year lows, trading against the dollar at ¥151.971 just before 3am GMT. As mentioned before, a weakening of the Yen makes Japanese equities relatively cheaper for foreign investors, which should contribute to stronger Nikkei performances. This also has a similar impact on net exports, as Japanese goods become relatively cheaper, thus increasing foreign demand and exports, while foreign goods become more expensive, lowering imports. The continued depreciation of the Yen increases the likelihood of BOJ currency market intervention, as the currency approaches the ¥152 level, this will likely fall under open market operations as the next monetary policy meet falls in April.
Trading on the Chinese benchmark index, the Shanghai Stock Exchange Composite Index (¥SSE), was volatile throughout the session. The index falling 1.26% to 2,993.14, marking its lowest close in almost a month. This move comes despite increasingly positive growth projections and an economic recovery roadmap.
The Nifty 50 (₹NSEI) rebounded from Wednesday’s session, with traders pushing the index up by 0.54% to 22,126.65.
Cryptocurrencies
The total market capitalisation of the cryptocurrency market fell from $2.63 trillion USD to $2.59 trillion on Wednesday. Bitcoin prices fell below their $69,000 support level to $68,936.01 by 21:00 GMT, marking a 1.33% 24-hour decline. US investment services giant Fidelity has filed for a Spot Ethereum ETF with the SEC, taking the number of applications to around eleven. News of further applications didn’t seem to have a major impact on Ethereum trading with prices still falling 1.65% to $3,514.51 by 21:10 GMT.
'Crypto Stocks'
US listed cryptocurrency exchange Coinbase Global Inc ($COIN) was the focus of news during the US trading session as the SEC is to progress with a lawsuit against the firm. A court ruling on Wednesday allows the SEC to take Coinbase to trial over the 'unregistered sale of securities', however, the SEC claim that the company acted as an unregistered broker through the Coinbase Wallet service was dismissed. Trader reaction to the news was expectedly negative, as Coinbase shares fell 3.79% through the session to $256.70.
MicroStrategy ($MSTR) shares continued to climb, rising 2.25%, breaking 52-week highs at its intraday peaks.
Commodities
Traders with long Crude Oil positions faced minor challenges through Wednesday upon the release of US Crude Inventory data. Despite analyst expectations of a third consecutive weekly drawdown, totalling a further 700,000 barrels, US inventories actually rose some 3.2 million barrels. This suggests that commercial crude demand in the US has weakened, signalling either a slowdown in economic output during the last week, or oversupply issues. By 21:00 GMT Crude prices had risen 0.11% to $81.71 per barrel.
Gold traders built some upward momentum through the session, with prices rising 0.73% to $2,215.30 per ounce by 21:00 GMT. Traders should remain somewhat cautious as Friday’s US PCE release draws closer, considering the potential effects on gold prices mentioned yesterday.
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
SEC - Securities and Exchange Commission