Tuesday's Markets Update (February 27, 2024)

27 Feb 2024 by rate3

On Tuesday, stock indexes were flat to lower, as traders await key economic data and Fed comments. Durable goods orders contracted by 6.1%, while the home price index is up. In global markets, the Nigerian central bank hiked its rate to a record 22%. Cotton prices are up on a speculative buying. The crypto market continued to grow, with BTC shooting above 57K (+10%) and reaching Nov 2021 levels, now aiming at ATH. ETH closed over 3.2K, and major coins such as BCH (+7%), Uniswap (+3%), and Cosmos (+2%) followed suit.

Details

In January, orders for manufactured durable goods fell by 6.1%, surpassing market predictions of a 4.5% drop. This was the largest monthly decline since April 2020, mainly due to a 16.2% decrease in transportation equipment orders. Excluding transportation, new orders decreased by 0.3%. Orders for non-defense capital goods excluding aircraft, a key indicator of business spending plans, increased by 0.1%.(CB)
The S&P CoreLogic Case-Shiller 20-city home price index in increased 6.1% year-on-year in December 2023, the greatest rise since November 2022. San Diego, Los Angeles, and Detroit saw the highest gains. Despite increased financing costs leading to price declines in 15 markets in Q4, 2023 exceeded average annual home price gains over the past 35 years.(SP)

Crypto

Ethereum's Dencun upgrade is live on testnets, leading to mainnet activation on March 13

, 2024. Features "protodanksharding" with EIP-4844 to reduce Layer 2 transaction costs. Builds upon Shapella upgrade with new features.(source).

World Markets

In January 2024, lending to companies in the Euro Area increased by 0.2% to EUR 5.136 trillion, following a 0.5% increase in December. Bank lending to households rose by 0.3% to EUR 6.870 trillion, below market expectations, indicating a slowdown in the Eurozone economy. Overall private sector credit growth remained unchanged at 0.4%.(ECB)
The Central Bank of Nigeria raised its benchmark interest rate to a record high of 22.75% to combat inflation, which reached a near 28-year high of 29.9%. The naira has plunged 70% against the dollar in 2024, and the central bank has taken measures to support it and boost local dollar liquidity, including relaxing the foreign exchange regime.(CBN)
Russian CB kept key policy rate at 16% in February, pausing hiking campaign after 850bps increase since July 2023. Inflation pressures eased compared to late 2023, but upside risks remain. GDP grew 3.6% in 2023, surpassing estimates amid capacity and labor challenges due to sanctions and mobilization.(CBR)

Currencies

The Brazilian real strengthened towards 4.98/USD, becoming an attractive option in emerging markets due to low volatility and high-interest rates (currently at 11.25%). However, the mid-month CPI for February at 4.49% tempered the upward momentum, as inflation is expected to ease to 3.9% by year-end.

Commodities

Cotton futures reached a high of 95 cents per pound, driven by speculative buying and sustained demand. USDA reported exports of 276,100 running bales, up 11% from the previous week. China, Vietnam, and Pakistan were the primary destinations. World consumption for 2023/24 is expected to remain unchanged, while production is projected to decrease by 355,000 bales.