Monday's Markets Update (April 1, 2024)

01 Apr 2024 by rate3

On Monday, stocks dipped after Q1 gains as manufacturing surprisingly grew, keeping the Fed on hold as inflation eased. Tech stocks rose (Microsoft, Nvidia, Amazon, Meta) while utilities lagged. Globally, China PMI surprised on the upside; oil remained steady. The dollar rose on manufacturing data, while the Turkish lira fell on local election results. Crypto markets plunged, with BTC forfeiting 3% and ETH dropping more than 5%. Major alts saw even steeper cuts, with Bitcoin Cash, Solana, Polkadot, and Polygon sliding more than 7%.

Details

The manufacturing sector grew marginally in March after 16 months of decline, exceeding expectations (PMI to 50.3). New orders and production rose, but employment continued to fall. Prices kept rising due to high material costs. (ISM)

Crypto

Milei's election win in November 2023 was met with excitement by digital asset supporters who hoped for a BTC-led future for Argentina. However, despite initial promises, Milei's government has disappointed the crypto community by implementing new registration requirements for crypto firms in line with FATF rules. The National Securities Commission of Argentina has introduced a Registry of Virtual Asset Services Providers, requiring crypto firms to register or risk being banned from the country.(source)

World Markets

The Caixin China General Manufacturing PMI rose to 51.1 in March 2024, surpassing market expectations and marking the fifth consecutive month of factory activity growth. This was fueled by increased new orders domestically and abroad, with foreign sales reaching a year high and output seeing the largest increase since May. However, employment continued to decline as firms remained cautious about costs. (PMI)
Spain's new car sales dipped 4.7% in March after a strong February. Despite the March decline, sales for the first quarter are still up 3.1% year-on-year. (Anfac)
Mexico's manufacturing PMI held steady at 52.2 in March, showing continued growth despite slightly slower hiring. New orders and output rose, but worries about US demand dampened optimism. Manufacturers raised prices due to higher input costs. (PMI)
In March, the Russia Manufacturing PMI rose to 55.7, indicating the sector's strongest growth since August 2006. Output and new orders saw significant increases, with foreign demand rising for the first time in five months. This led to higher employment rates and increased input buying to replenish stocks.

Currencies

The dollar rose close to a two-month high after data suggested manufacturing growth and inflation are on the rise. Investors are looking ahead to economic reports and Fed comments this week for clues on future interest rate cuts. The dollar gained against major currencies like the Euro.
The Turkish lira dropped to a new low of 32.4 per USD following Erdogan's AKP party's defeat in local elections. Concerns arose over potential shifts in economic policies, but Erdogan vowed to address inflation. Turkey's inflation hit 67.07% in February 2024, prompting citizens to invest in gold and USD-linked assets. The central bank raised interest rates by a significant 4,150 bps over the past year amid economic challenges.

Commodities

Oil prices stabilized around $83 per barrel, hitting a 5-month high, with anticipation for OPEC+'s meeting to extend production cuts. Investors are monitoring Ukrainian drone strikes on Russian refineries, peace efforts in Gaza, and Chinese manufacturing growth.