Wednesday's Markets Update (February 7, 2024)

08 Feb 2024 by rate3

On Wednesday, mortgage applications increased, indicating an improving economy and higher Fed rates for longer, but stocks climbed on strong corporate reports, with the S&P 500 hitting ATH and Nvidia, Microsoft, and Meta showing significant gains. Internationally, China's vehicle sales slowed while Japan's leading economic index rose. The crypto market was in a mildly positive mood with Algorand increasing 3% and BTC showing less than a 1% rise. Monero recovered 30% of yesterday's dump, to 133.

Details

Mortgage applications increased 3.7% in the week ending February 2nd, the fourth rise this year, despite a minor 2bps rise in average rates to 6.80%. Refinance applications jumped 12.6%, while home purchase applications fell 0.6%, following a weekly decline.(MBA)

Crypto

MicroStrategy has consistently bought Bitcoin since 2020, becoming the global leader in corporate Bitcoin holdings. In 2023 and 2024, they added more to their stash, purchasing 850 bitcoins for $37.5 million in January, bringing their total to 190,000 BTC, worth $8.41 billion. Galaxy Digital Holdings holds 17,518 bitcoins in comparison, valued at $775 million.(source)
A study found crypto investors earned $887 on average in 2023, up greatly from 2022 when the market fell and investors lost over $7,000 on average amid crypto firm failures and a bear market.(source)

World Markets

China's vehicle sales increased 47.9% YoY to 2.44 million units in Jan '24, with NEV sales making up 29.9% and growing 78.8% YoY. However, both total and NEV sales decreased from Dec '23. Passenger vehicle sales dropped 37.9% YoY and 40.4% MoM, the worst since the early 2000s, due to a housing slump and market downturn.(CN)
Japan's leading economic index rose to 110.0 in Dec '23, above forecasts, due to falling unemployment and improved consumer morale. This is the highest reading since Oct '22, rebounding from a 7-month low of 108.1 in Nov '23. Consumer confidence also reached a 1-year high in Dec '23.(ESRI)
France's trade deficit expanded to €6.83 billion in Dec '23, surpassing expectations of €6 billion. Exports increased 1% to €50.2 billion while imports rose 2.5% to €57 billion. The deficit in investment and intermediate goods rose, but the energy shortfall narrowed. The deficit for 2023 decreased by €63.1 billion due to lower imports and higher exports of energy and manufactured goods.(FR)
The Reserve Bank of Australia left its cash rate at 4.35% in its 2024 meeting, following a 425bps rate hike to curb inflation. Inflation remains high, but cost pressure is easing. Future tightening depends on data and risks, with a focus on returning inflation to the 2-3% target range by 2025. The board will monitor global and domestic trends, maintaining the Exchange Settlement rate at 4.25%.(RBA)