Friday's Markets Update (February 9, 2024)

10 Feb 2024 by rate3

On Friday, stocks closed mixed, with the S&P 500 and Nasdaq reaching ATH once again, driven by gains in megacap companies. The Dow, however, fell due to declines in the energy and industrial sectors. The revised December Consumer Price Index (CPI) showed minimal change, supporting the ongoing disinflation. Earnings results showed significant shifts, with megacap companies like NVIDIA up and PepsiCo, Pinterest, and Expedia down due to disappointing reports. In global markets, European stocks closed near record highs, and oil prices rose due to the worsening situation in the Middle East. The crypto market also saw gains, with Avalanche (+6%) and Bitcoin (+4%) leading the charge. Uniswap and Cosmos increased by 3%, while Ethereum and Cardano added 2%. Monero continued to retreat, decreasing by 5%, after correcting by 30% post-crash. Among major currency pairs, BTC-to-Turkish Lira and BTC-to-Brazilian Real outperformed the rest of the market with a 3% increase.

Details

Core consumer prices, excluding food and energy, remained steady with a 0.3% increase in December 2023, matching November’s figure and market forecasts. Service prices excluding energy services slowed, while shelter and medical care costs rose more. Goods prices saw a rebound in apparel, new vehicles, and alcoholic beverages, but used cars, medical care commodities, and tobacco dropped.(BLS)
World Markets

European stocks closed near record highs, with the Stoxx 50 hitting a 23-year high and Hermes performing well post strong sales results, but L’Oréal fell after below-forecast sales. Germany’s inflation hit a two-year low of 2.9% in January.
Italian industrial production rose 1.1% MoM in December 2023, beating expectations and recovering from a revised 1.3% fall in November. Output increased for consumer, capital, and intermediate goods, while energy output fell less sharply. Yearly output fell 2.1%, the smallest decline in four quarters, and 2023 saw a 2.5% drop compared to a 0.4% rise in 2022.(Istat)
Currencies

The Russian ruble traded near 90 per US dollar, its lowest level in a month, pressured by weakening seasonal tax factors and the central bank head signaling interest rate cuts in 2024 while disagreements between the bank and government on capital controls added uncertainty.
Commodities

Wheat futures dropped to $5.9, near three-week lows, due to higher global supply projections and lower US consumption. The USDA’s WASDE report showed increased global wheat production, particularly in Middle East, reducing imports for the top importer. Russia’s record-high wheat production, near 91 million tons, and near-record exports signal a supply surge. US demand fell due to reduced food demand.
WTI crude futures closed at $76.84, up 6% and 3% from previous days, due to Middle East geopolitical tensions, Israel’s ongoing operations in Gaza, and US drone strike in Baghdad, affecting oil demand. US gasoline inventories dropped dramatically, while crude stocks rose, contrasting market expectations.
On Week 7, investors will track inflation, retail sales, Fed speeches, and earnings from Coca-Cola, Airbnb, among others. Meanwhile, UK, Japan, and others report Q4 GDP, inflation, and unemployment. International highlights include UK and India’s inflation, Switzerland’s unemployment, and Germany’s ZEW sentiment.