market wrap
be careful:
German consumer confidence index. Deal updates from Atos, Flutter Entertainment, Smiths Group, John Wood Group and Ocado Group
Opening call:
European stock futures recorded losses early Tuesday. Asian stock markets were mixed. The dollar has fallen. Government bond yields have fallen significantly. Oil futures and gold futures fell.
stock:
European stock futures also fell, following a second straight decline in U.S. stocks on Monday as investors excited by the possibility of lower interest rates pushed the index to record highs.
Federal Reserve Governor Lisa Cook said Monday that the central bank needs to take a “cautious approach” when deciding when to cut interest rates, but gave few clues about the timing or size of the cuts.
“Over the next few days, I think many investors will be asking themselves the question, ‘Do we need to make more bullish assumptions or do we need to take a few chips off the table?’ “No,” Steve said. Mr. Chiavarone is head of the multi-asset group at asset management company Federated Hermes.
“The next big catalyst is going to be earnings season,” said John Baylor, deputy head of equity returns at Newton Investment Management.
Investors are awaiting economic data this week for further clarity on the Fed’s rate cut path. Later today, U.S. durable goods orders for February will be released, followed by final fourth-quarter GDP estimates and weekly unemployment claims on Thursday, and PCE price index data, the Fed’s preferred inflation indicator, on Friday. To be announced.
Foreign exchange:
The U.S. dollar fell as markets clung to expectations that the Federal Reserve and other major central banks would begin cutting interest rates in the coming months.
CME’s FedWatch tool puts a 63% chance the Fed will cut rates in June, up from 51% a week ago.
—
Concerns about the possibility of currency intervention may be supporting the Japanese yen.
Japan’s top monetary authority, Masato Kanda, issued a strong warning against shorting the yen on Monday, according to Zhang Wei Liang, foreign exchange and credit strategist at DBS Group Research.
Kanda said the government was ready to take action, saying there was speculative activity in the foreign exchange market that did not reflect fundamentals.
Bonds:
Volatility in U.S. Treasury rates, as measured by the MOVE index, has increased despite recent guidance from the U.S. Federal Reserve that rates could remain higher for a longer period of time than previously expected, according to Morgan Stanley Wealth Management. , is said to be very low.
“The calm appears to be supported by further confidence in the interest rate outlook, which is also supported by stock market sentiment.”
Investors will be keeping an eye on Friday’s personal consumption spending index for indicators of whether inflation continued to accelerate again in February, as well as Fed Chairman Jerome Powell’s remarks at the San Francisco Fed’s Economic and Monetary Policy Conference. are doing.
energy:
Oil futures fell but could remain supported as investors closely monitor rising geopolitical tensions in the Middle East and Russia’s war in Ukraine. The Russian government’s production cuts to meet OPEC+ targets and a decline in the number of U.S. rigs running have also raised concerns about a potential tightening of oil supplies.
ING strategists said the risk premium in the oil market remained high due to continued Ukrainian drone attacks on Russian refineries.
metal:
Gold fell, but expectations of further slowing inflation could help. Analysts at ANZ Research said a slew of economic reports this week could give more clarity on when the central bank will start cutting interest rates.
Investors were also analyzing comments from Fed officials. Fed’s Lisa Cook says policymakers need to take a cautious approach to give inflation more time to slow, while Austan Goolsby expects three rate cuts this year, analyst says pointed out.
—
Copper rose in Asia as concerns about China’s economic challenges eased slightly. Metals prices rose across the board after China downplayed concerns about the challenges facing its economy over the weekend, according to ANZ Research.
Copper prices were boosted by Chinese Premier Li Qiang’s comments that there was still room for broader macroeconomic policies due to weak consumer price growth.
—
Iron ore fell slightly amid lingering concerns about China’s real estate sector.
Commonwealth Bank of Australia analyst Vivek Dhar said steel demand was likely to trend flat in 2024 as China’s real estate sector remained weak.
today’s top headlines
Cook says Fed needs to tread carefully before cutting interest rates
Federal Reserve Governor Lisa Cook said on Monday that the central bank needs to take a “cautious approach” in deciding when to cut interest rates, but gave little clue as to when or how large the cuts would be. did not give.
The Federal Reserve last week kept key U.S. short-term interest rates unchanged, but signaled it was still likely to cut rates three times this year.
Israel cancels visit to Washington after US abstains from UN ceasefire resolution
The United Nations Security Council approved a resolution calling for an immediate ceasefire in the Gaza Strip and urged Israel to withdraw from future high-level talks with the Biden administration, after the United States approved the resolution with an abstention. .
The unusual U.S. move signals the administration’s growing dissatisfaction with Israeli Prime Minister Benjamin Netanyahu, whose relationship with the White House has soured over clashes between political policies and conflicting views on military tactics.
China reportedly seeks to block Intel, AMD and Microsoft technology from being used in government computers
The Financial Times reports that the Chinese government has introduced new guidelines to prevent Intel and AMD microprocessors from being used in state-owned PCs and servers.
The Chinese government’s new procurement guidelines also call for the elimination of Microsoft’s Windows and other foreign operating systems, in line with plans to replace U.S. technology with Chinese-made alternatives, according to the report.
Qantas under investigation after engine trouble on Airbus plane
Sydney-Qantas engineers will inspect an Airbus A330 plane whose pilot killed one of its engines on a flight between Melbourne and Perth on Monday night.
Local media reported that passengers said they heard a loud noise aboard Qantas Flight 781. Qantas, Australia’s largest airline, said the plane landed safely in Perth without incident.
Australia’s Canva targets professional designers with UK acquisition
Sydney design software development company Canva has acquired Affinity, a UK-based design platform targeting professional users, as the fast-growing Australian company aims to list on the US stock market.
Sydney-based Canva has agreed to pay a combination of cash and stock to privately held developer Serif of Affinity, which develops professional photo editing, illustration and graphic design software that also offers services such as Adobe. Canva did not disclose financial details of the acquisition, but co-founder Cliff Obrecht said it was the largest in Canva’s 11-year history.
EV maker Lucid runs out of cash and rebounds after major shareholder invests $1 billion
Lucid announced that its majority shareholder would buy $1 billion worth of its own stock, even as other EV companies continue to face headwinds. The group’s shares rose 6% on Monday.
Lucid Group LCID announced that Saudi Arabia-based Ayar Saad Investment Company (an affiliate of the Saudi sovereign wealth fund, the Public Investment Fund) has acquired a new series of convertible preferred shares valued at $1 billion through a customary private placement. announced that they had agreed to purchase. Closing conditions.
Boeing’s next CEO takes on ‘big job’ at company in crisis
A federal investigation, a sloppy factory, a furious airline, tense union negotiations, and a groaning supply chain. Boeing’s crisis does not end with David Calhoun stepping down as CEO.
The next leader of the American manufacturing icon will be the same Mr. Calhoun, a longtime Boeing Co. board member, was ordered to clean up four years ago when his board fired his predecessor. Some of the issues will have to be addressed.
Adam Neumann bids more than $500 million to buy back WeWork
WeWork’s former chief executive and co-founder Adam Neumann recently submitted a proposal to buy the bankrupt co-working company for more than $500 million, according to people familiar with the matter.
It was not immediately clear how Mr. Neumann would finance the acquisition, the people said.
Judge dismisses X lawsuit against research group accused of condoning hate speech
A federal judge has dismissed Company X’s lawsuit against a research group that accused the platform of allowing hate speech to spread.
In July, X sued the Center to Combat Digital Hate, alleging that the center prepares studies using flawed methodologies to censor views with which it disagrees. X accused the group of illegally accessing data from the X platform by scraping and fraudulently obtaining login credentials for databases operated by vendors.
Email singaporeeditors@dowjones.com
Main events expected on Tuesday
06:00/FIN: February Labor Force Survey, including unemployment rate
07:00/SWE: February PPI
07:00/DEN: February Retail Sales Index
07:00/GER: April GfK Consumer Environment Survey
08:00/SPN: 4th quarter final GDP
08:00/SWE: March Consumer Trends Survey
08:00/SWE: March Monthly Business Trend Survey
09:00/ICE: February PPI
09:00/ICE: March CPI
13:00/HUN: March Hungarian interest rate decision
All in GMT. Brought to you by Onclusive and Dow Jones.
Please contact us at newsletters@dowjones.com.
An enhanced version of this briefing is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please visit https://newsplus.wsj.com/subscriptions.
This article is a text version of the Wall Street Journal newsletter published today.
(Ended) Dow Jones News
March 26, 2024 01:15 ET (05:15 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
