Wednesday's Markets Update (February 28, 2024)

28 Feb 2024 by rate3

On Wednesday, major stocks indices decreased as investors awaited the PCE inflation report and digested contradictory comments from Fed officials. The US economy showed 3.2% annualized growth in Q4 2023. In the world's markets, economic sentiments lowered in the Euro Area, and sugar prices rose due to dry weather conditions. The crypto market heated up, with BTC reaching 64K, then suddenly crashed due to massive profit-taking, with BTC hitting 59K. BTC ETFs have surpassed the 50% of gold ETFs' market.

Details

The economy grew at an annualized rate of 3.2% in Q4 2023, slightly below the initial estimate of 3.3%, due to a downward revision in private inventories. Consumer spending was revised higher, led by services, while government spending and exports also increased more than anticipated. Non-residential investment was revised higher, except for investment in equipment, while residential investment continued to grow. For the full year 2023, the US economy grew 2.5%, up from 1.9% in 2022.(BEA)
The core personal consumption expenditure (PCE) price index in the US rose by 2.1% in the Q4 2023, up from 2% in the third quarter and exceeding initial estimates of 2%. (BEA)
The average mortgage rate decreased to 7.04% in February 2024. Mortgage loan application volume, decreased 5.6% from the previous week. The Refinance Index decreased 7% and was 1% lower than the same week one year ago. (MBA)

Crypto

The total assets under management (AUM) of US-listed Bitcoin ETFs have surpassed 51.5% of the size of gold ETFs, with Bitcoin's price surging past $63K. There is currently $92.1 billion invested across 19 US-listed gold ETFs. In comparison, US Bitcoin ETFs now hold a cumulative 746,600 BTC, with a value of over $47.5B. This milestone follows the SEC's approval of Bitcoin ETFs in the US seven weeks ago, marking a significant recognition of Bitcoin as an investable commodity.(source)

BTC has reached new all-time highs in 14 countries facing economic and financial challenges: Japan, Argentina, Laos, Congo, Ghana, Turkey, Burundi, Sudan, Lebanon, Malawi, Egypt, Pakistan, Sierra Leone, and Nigeria leading the way. (source)
BlackRock recommended 28% allocation of one’s portfolio to Bitcoin. (source)

World Markets

The economic sentiment indicator in the Euro Area slightly decreased to 95.4 in February, missing expectations and driven by declining confidence among businesses and consumers.(EU)

Commodities

US natural gas prices have recovered to above $1.8/MMBtu after falling to a low of $1.54 on February 19, the lowest level since June 2020. This rebound is despite a mild winter that has left stockpiles well above normal levels (+22.3%), and record-high production levels, which have contributed to an oversupply in the market. To address this issue, some producers have reduced their production plans.
Raw sugar futures reached a one-month high as dry weather affected key producers, threatening global supply and raising concerns over low sugar production in India and Thailand.