Thursday's Markets Update (April 18, 2024)

18 Apr 2024 by rate3

On Thursday, stocks were mostly in the red after a 5-day slide for the S&P 500 and Nasdaq. Interest rate worries were emphasized by strong Philadelphia manufacturing data and flat jobless claims but conflicted with corporate earnings and falling home sales. On global markets, the central banks of the USA, Japan, and South Korea held an urgent meeting to address the weak yuan, while the dollar remained super-strong and commodity prices continued rising, with tin and copper reaching two-year highs. BTC and ETH attempted a sluggish recovery, closing above 63K and 3K a day before halving, but without changing the overall bearish technical picture. They were joined by the rest of the crypto market, with Solana, Uniswap, and Chainlink adding more than 6%.

Details

Jobless claims remained flat at 212K, indicating a tight labor market. This data, below expectations, suggests the unemployed are finding jobs at a healthy pace. The Fed may hold off on interest rate cuts to address inflation due to this strong labor market. (DOL)
The Philly Fed Manufacturing Index surged to 15.5 in April, exceeding expectations by a wide margin. This indicates growth in the manufacturing sector, with new orders and shipments rising sharply. However, employment continued to decline, and businesses reported ongoing price increases. (PHIL)
Existing home sales fell 4.3% in March to 4.19M units, after a February jump. Rising mortgage rates and limited price movement are seen as reasons for the slowdown. Sales rose only in the Northeast, while other regions dipped. Inventory increased, but remains tight relative to demand. The median sales price rose 4.8% to $393.5K. (NAR)

Crypto

World Markets

Eurozone construction dipped YoY in February 2024, down 0.4%. Building and specialized activity declined, but civil engineering grew. Construction varied by country, with Spain and Germany gaining while Netherlands and France fell. Monthly output however, rose 1.8%. (Eurostat)
European car sales fell 5.2% in March, the first decline of 2024, blamed on Easter timing: Germany (-6.2%), Spain (-4.7%), Italy (-3.7%), and France (-1.5%). This follows a strong February. Sales dipped in most major markets, including Germany and France. Electric car registrations (13% of the market) also dropped, but remain up slightly for the year compared to 2023.

Currencies

The dollar held steady around a five-month high of 106 after earlier dips. This comes despite some positive economic data as the Fed prioritizes fighting inflation and keeps investors guessing about future rate cuts.
The Chinese yuan strengthened against the dollar after falling to five-month lows. China's central bank and state-owned banks are intervening to support the yuan. Despite stronger-than-expected GDP growth, weaker economic data and a rising USA dollar are keeping pressure on the currency.
The South Korean won strengthened after weakening to an 18-month low. This follows a trilateral meeting between the US, Japan, and South Korea where they agreed to cooperate on currency markets. The Bank of Korea is also prepared to intervene to support the won, but China's weak currency limits their options. The won has been pressured by a strong dollar.
The Japanese yen held steady around a 34-year low versus the dollar despite US concerns about currency weakness in Asia. This comes after a meeting between US, Japanese, and South Korean officials. The difference in monetary policy between Japan's dovish central bank and the hawkish Fed is keeping the yen weak.

Commodities

Tin prices skyrocketed to a near two-year high of $32,750 per tonne due to supply worries. Export delays in Indonesia, a major producer, and disruptions in Myanmar worsened existing shortages. Meanwhile, rising demand from China and the US, fueled by manufacturing growth and expectations for AI technology, put additional strain on supply.
Wheat prices dropped below $5.4 per bushel, near a 3-month low, due to a global supply glut. Bumper crops from the Black Sea and the US pushed prices down. The USDA predicts record Russian exports, further pressuring prices despite lingering concerns about potential shipping disruptions.
Copper prices soared to a near two-year high in April at over $4.4 per pound. This surge comes from a combination of factors: concerns about limited copper supplies due to mine shutdowns and smelter slowdowns in China, along with signs of increasing demand from Chinese factories