Monday's Markets Update (February 12, 2024)

12 Feb 2024 by rate3

On Monday, stocks were mostly flat near record highs ahead of the CPI release, as earnings season continued. The S&P 500 and Nasdaq 100 hit ATH again and then slightly declined. Investors awaited remarks from Fed officials for signs of potential interest rate cuts. On global markets, EU stocks reached record highs, following N. American indexes, while oil and gold prices held steady, awaiting Fed comments and inflation data. The cryptocurrency market saw significant gains, with Bitcoin adding 4% and surpassing $50K for the first time since December 2021. Major altcoins followed suit, with Polygon and Ethereum leading the charge, each increasing by about 5%.

Details

The US budget deficit decreased to $22 billion in January 2024, compared to $39 billion the previous year, due to record-high receipts and lower tax refunds. Outlays grew by 3% to $499 billion, while receipts increased by 7% to $477 billion. The deficit for the first four months of the fiscal year rose by 16% to $532 billion.(BFS)

Crypto

Franklin Templeton files for spot Ethereum ETF, joining other asset managers seeking SEC approval. The ETF will reflect the price of ether, with Coinbase and Bank of New York Mellon as custodians.(source)
ERC-404 token market cap experiences high volatility, plunging 30% before partially recovering. The ERC-404 standard combines ERC-20 (fungible) and ERC-721 (non-fungible) token standards, linking tokens to NFTs. (source)
Torrevieja, a coastal city in Spain, has initiated a plan to become Europe's first "crypto-friendly" city. The Association of Small and Medium-sized Merchants of Torrevieja (APYMECO) and the Torrevieja City Council aim to transform the city into a blockchain hub through a three-phased plan, focusing on cryptocurrency trade, sustainability, and job creation.(source)

World Markets

European stocks closed higher on Monday as markets evaluated new corporate earnings and anticipated macroeconomic data. The Eurozone's Stoxx 50 and Stoxx 600 reached record highs. Financial companies led the gains, with Axa and UniCredit advancing close to 2%. Consumer goods also advanced, with strong performances by LVMH and L'Oreal. Saab jumped nearly 6%, while Siemens Energy advanced 5.7%.
India's industrial production grew by 3.8% in December 2023, exceeding expectations, with manufacturing output increasing by 3.9%. Mining and electricity output slowed compared to the previous month. From April to December, industrial production rose by 6.1%. Manufacturing production averaged 5.82% growth from 2006 to 2023. (MOSPI)
The Philippines saw a 27.8% year-on-year increase in net foreign direct investment (FDI) to a near two-year high of USD 1.05 billion in November 2023, driven by an expansion of net inflows for net debt instruments. Inflows dropped for equity capital (-52.5% to USD 0.09B). Equity capital mainly came from Japan and the United States, channeled to manufacturing, real estate, and construction industries.
Russia's trade surplus in 2023 plunged by 2.4 times to USD 140 billion, with exports down 28.3% to USD 425.1 billion and the share of mineral products declining to 61.2%. Destinations shifted, with decreases to European (-68%) and South/North American (-40.4%) countries, but increases to Asian (5.6%) and African countries (42.9%). Imports rose by 11.7% to USD 285.1 billion. Among imports, machinery, equipment, and vehicles increased by 5.1 percentage points to 51.1%, and chemical products by 2.8 percentage points to 19.5%.

Currencies

The dollar index (DXY) rose slightly above 104 as investors awaited consumer inflation data, which may indicate interest rate trends. January's headline inflation is expected to fall to 3%, while the core rate may reach 3.8%.

Commodities

WTI crude at $76.92/bbl, supported by Middle East tensions, but global supply and demand concerns limit further gains.
Gold prices were subdued around $2,020 an ounce on Monday as many Asian markets were closed for holidays. Investors are awaiting key US inflation data that could impact interest rate expectations. Despite a smaller than expected increase in December CPI, gold did not gain ground. Markets still expect a possible Fed rate cut in May.