Friday's Markets Update (May 17, 2024)

17 May 2024 by rate3

On Friday, after record highs mid-week, stocks were flat. Investors are weighing potential interest rate cuts against mixed economic signals. While some sectors gained, meme stocks continued to slide. Mega-cap tech saw mixed results, but major indexes are still up for the week. Globally, silver jumped, closing a statistically rare 90x gap with gold, while nickel, aluminum, and copper continued to rise on a mixture of supply concerns and hopes for rate cuts. BTC was pushed up again to +66K by optimistic bulls, staking in a continuation of the stock rally. ETH went over 3K for the first time in two weeks. SOL, LINK, AVAX, and BCH increased by 4% or more.

Crypto

South Korea's crypto market is booming with 12.9% of the population actively trading (6.45M traders). DailyTsurged 24% and market cap rose 53% in a year (KRW 43.6T). However, the volatility (61.5%) remains high. (source)

World Markets

Eurozone inflation remained stable at a 3-year low of 2.4% in April, down significantly from 7% a year prior. Services and some goods saw price slowdowns, while food and energy prices showed mixed movement. Core inflation, excluding volatile items, hit a 26-month low, and the European Commission expects inflation to fall further in 2025. (Estat)
Russia's economy grew faster than expected in Q1 2024 (5.4%), but concerns linger. The rise is fueled by war spending, raising doubts on long-term health. High inflation and workforce loss due to mobilization threaten further growth. IMF forecasts 3.2% growth for 2024, while the Ministry of Economy is more cautious at 2.8%. (Rstat)

Currencies

Chinese yuan weakened to 7.23 after mixed economic data. Factory output surprised on the upside, but consumer spending remained weak. Real estate investment continued to decline. To counter this, China launched a stimulus program by auctioning special bonds.

Commodities

Silver surged to a decade high of $30 per ounce, driven by strong investor and industrial buying. Physical demand is high, while investment funds remain on the sidelines. The gold-to-silver ratio is narrowing (from 90 to 70, suggesting silver could climb further if the US economic data stays positive and interest rates fall.
Copper prices soar near record highs (5.13) on worries about tight supply and rising Chinese demand fueled by stimulus and infrastructure spending. Speculation of limited mine expansion due to mergers and acquisitions further intensifies supply concerns.
Aluminum prices hit a near two-year high in May at $2.6K per tonne due to concerns about tight supply. Sanctions on Russia, logistical problems, and potential power issues in China all fueled the price increase.
Nickel prices jumped to an eight-month high (21K) due to unrest in New Caledonia, a key producer. Protests and riots there threaten to disrupt nickel mining, raising concerns of shortages despite a projected surplus. This, along with inflation fears and green energy optimism, fueled the price increase.

On Week 21, Fed members speeches and global central bank decisions will be in traders' cross hair, PMI readings for manufacturing and services across major economies, plus inflation updates and retail sales data are expected. Earnings season winds down with reports from key companies.