Tuesday's Markets Update (April 9, 2024)

09 Apr 2024 by rate3

On Tuesday, stocks surrendered their gains, with financials, industrials, and tech sectors leading the decline, while real estate remained positive. Small business confidence plummeted to levels not seen since the 2007-08 depression. Internationally, commodities continued their upward trajectory, driven by gold with tin prices reaching year-highs. BTC (-4%) and ETH (-5%) retreated sharply after encountering resistance levels at 72K and 3.7K, respectively. The rest of the crypto market followed suit, with Litecoin (-7%) and Avalanche (-6%) leading the downward trend.

Details

Small business confidence plunged to a 12-year low (88.5) in March. Inflation is the top concern, followed by a tight labor market. Owners are pessimistic about sales growth and hiring plans are slowing down. (Nfib)
Economic optimism dipped to a 4-month low in April (43.2). All sub-indices fell except confidence in federal policies (up). Investors remained optimistic (54.9) while non-investors grew more negative (36.6). (Technometrica)

Crypto

Overall, spot Bitcoin ETF volumes have been on a decline since its peak (early March). Grayscale's main spot ETF saw a large outflow ($303 million), but other spot ETFs like Bitwise and BlackRock's had inflows. This creates a net outflow of $224 million overall. However, looking at a broader timeframe, nearly $1 billion flowed into Bitcoin ETFs last week, mostly into BlackRock's product. Despite the recent spot ETF outflows, overall interest in Bitcoin investment vehicles remains strong. (source)

World Markets

Saudi Arabian industrial output declined 7.7% YoY, the smallest drop in 8 months. Mining, especially oil production, dragged down the sector. However, manufacturing rose 2.1%, driven by growth in items like metals, paper, and beverages. Overall, industrial production edged up 1% monthly. (SA)

Currencies

DXY is stuck near 104.2 as investors wait on key inflation data and Fed minutes. Strong jobs data and hawkish comments from Fed officials lowered expectations for rate cuts this year (60 basis points vs prior forecast of 75). The dollar is steady but could weaken against the yen, potentially inviting intervention from Japan.

Commodities

Gold keeps rising 8th day in a row, reaching over $2,350 an ounce. Strong demand from central banks and safe-haven buying are fueling the rally. China keeps adding to its gold reserves, and analysts predict prices could hit $3K by 2025. Geopolitical tensions and inflation add to gold's appeal. Investors await Fed minutes and US inflation data for clues on interest rates.
Tin prices hit a 15-month high of nearly $30,000 per tonne, mirroring other base metals. Strong global demand and worries about supply are behind the surge. Indonesia, a key exporter, restarted mining but future regulations cast a shadow. Positive manufacturing data in China adds fuel to the fire for base metals. FYI: World's leading tin producers: China, Indonesia, Peru, Myanmar and Bolivia.