Wednesday's Markets Update (March 27, 2024)

27 Mar 2024 by rate3

On Wednesday, stocks rebounded after a two-day slump. The Dow surged on strong performances from Apple and Intel, while the S&P hit a record high. Tech stocks lagged, with Nvidia dropping. Investors await Fed comments and inflation data for clues on rate cuts. Utilities, real estate, and industrials led gains. In the world's markets, Chinese industrial profits surged, while EU consumer sentiments improved only marginally. BTC and ETH continued to slide down by several percentage points, forming a side-channel on daily graphs. The crypto market followed suit, with Algorand, Polygon, and Solana dropping by 3% and more.

Details

30-year mortgage rates dipped barely noticeable to 6.93% (previous: 6.97%) in late March. This could increase housing inventory, but experts say it will likely be slow as rates are expected to fall further this year. (MBA)

Crypto

Republican lawmakers urged the SEC to clarify rules for digital assets like Ethereum, particularly regarding custody services. They argue Ethereum isn't a security and current uncertainty harms the market. This impacts offerings like Ethereum ETFs and the broader digital asset landscape. (source).
Fidelity applied to launch a spot ETF. This filing offers the possibility of some holdings being staked to earn rewards. (source)

World Markets

Chinese industrial profits surged 10.2% in early 2024, reversing a 2023 decline. This points to an economic recovery fueled by government support. Private sector profits grew much faster than state-owned ones. Gains were strong in tech, autos, and energy, while profits fell in mining and agriculture. (CN)
Eurozone economic confidence rose to a 3-month high (96.3) in March, beating expectations. Both manufacturers and consumers were more optimistic, with sentiment also improving in services and retail. Inflation expectations eased slightly, while manufacturers expect to raise prices. Confidence rose in France, Italy, and Germany, but fell in Netherlands and Spain. (EU)
French consumer confidence rose in March to a near two-year high (91), but stayed below the long-term average. People felt better about finances, standard of living, and future inflation. They were also more optimistic about buying big items and job prospects. (Insee)
Spain's inflation rose to 3.2% in March, after a dip in February. This is in line with expectations. Energy prices drove the increase, but food price growth slowed. Core inflation, excluding volatile items, dipped to its lowest level in over two years - 3.3%. (Ine)
Russia's industrial output surged to a 2-year high of 8.5% in February, up from 4.6% growth in January. Manufacturing, utilities, and mining all saw strong gains. The overall Russian economy also grew at a solid pace of 4.6% year-on-year in January. (RU)

Currencies

The Euro held steady around $1.08, likely ending the quarter down vs. the USD. This follows the ECB signaling future rate cuts due to falling inflation. Investors expect a cut in June, with some anticipating more by year-end. The dollar strengthened as US rate cut expectations eased.
The yen weakened to a 32-year low (152), sparking talk of intervention by Japanese officials. Finance Minister Suzuki warned they might take action. This follows the Bank of Japan's recent rate hike, which had little impact on the currency's decline.
The British pound held steady (1.26) but is on track for a quarterly decline versus the dollar. This follows dovish signals from the Bank of England, which kept rates unchanged despite inflation. Some policymakers shifted toward holding rates, leading markets to believe the UK could cut rates before the US, but one official downplayed that expectation.
South Africa's rand gained slightly (18.9) after the central bank kept rates high to fight inflation. Inflation is near the target range, but policymakers expect it to take longer to cool down. This means interest rates will likely stay high for a while. (77 words)
Mexican peso strengthened to an 8-year high (16.6) due to lower unemployment and bets on continued tight monetary policy to fight inflation. The central bank cut rates slightly but signaled a wait-and-see approach.