Tuesday's Markets Update (March 12, 2024)

12 Mar 2024 by rate3

On Tuesday, major stock indices rose despite an unexpected inflation increase and a decline in business activity. Internationally, manufacturing output decreased in Brazil and India, while Mexico registered an increase. BTC, ETH, and most of the crypto market corrected, while XRP surged by 20%. MicroStrategy bought 12th BTC.

Details

The inflation rose unexpectedly to 3.2% YoY in February (above predictions). Energy slowdown weaker than expected. Food, used cars, and apparel price increases eased compared to January. Transportation costs continued to surge. Monthly inflation ticked up slightly (0.4%). (BLS)
Core inflation dipped slightly to 3.8% YoY in February (near 3-year low), but remained above expectations. Shelter costs, a major contributor, slowed down. Prices for recreation and personal care eased, while medical care and auto insurance kept rising. Monthly core inflation stayed flat at 0.4%. (BLS)
Small business confidence dips to a 9-month low (89.4) in February. Inflation replaces labor quality (down to lowest since early 2020) as the top concern for owners. (NFIB)

Crypto

MicroStrategy buys more Bitcoin (12th) as its price hits a new high. Their total holdings now stand at 205th BTC, worth over $14.8 billion. BlackRock's new Bitcoin ETF (iShares Bitcoin Trust) also holds a significant amount (197,943.2 BTC) (source)

World Markets

Brazil's inflation slows down for the 5th month straight, reaching 4.5% in February (lowest in 7 months). Food and transportation costs rose, but housing, clothing, and healthcare saw some relief. Monthly prices ticked up (0.83%, highest in a year) due to school year expenses and fuel tax increase. (IBGE)
India's industrial output grew 3.8% year-on-year in January 2024, lower than expected (4.1%). Manufacturing, making up most (78%) of production, slowed to 3.2% growth compared to December's 4.5%. However, mining and electricity sectors saw faster expansion (5.9% and 5.6%, respectively). This follows an upward revision for December's growth (4.2%). (MOSPI)
Mexico's industrial output jumped 2.9% in Jan (exceeding expectations). Construction boomed (17.9%), while manufacturing recovered (0.1%). Mining dipped further, and utilities grew slower. Monthly production also rose slightly (0.4%). (INEGI)

Currencies

Brazilian real weakens (4.98 per USD) on inflation concerns. Higher than expected inflation in Brazil (4.5%) and potential Fed rate cut delay weigh on the real. China's economic slowdown further weakens foreign demand for Brazilian exports.

Commodities

Oil prices jump past $78/barrel on OPEC's upbeat demand forecast. They predict 2.25 million bpd growth in 2024 and raised 2023 economic outlook (+2.8%). Despite production increase (led by Nigeria, Libya), OPEC cuts and Middle East tensions support prices.