Monday's Market Update (May 20, 2024)

20 May 2024 by rate3

On Monday, tech stocks, led by Nvidia, fueled the rally, with the Nasdaq hitting a new record high. However, the Dow Jones dipped due to a decline in JP Morgan Chase shares. World markets were hit by a major commodities rally on the perceived political destabilization in Iran, with gold and copper surging to new ATH and silver reaching decades-old records. BTC charged up by 5% in a buying frenzy, joined by ETH, which jumped by more than 10%, followed by Uniswap (+12%), Solana (+8%), and Avalanche (+7%).

Details

Interest rates may stay high for a while, warns Fed officials. Bostic predicts rates similar to the 1990s and sees only one cut possible this year despite inflation slowing. Barr agrees, calling recent inflation data "disappointing" and advocating for holding rates steady. (Fed)

Crypto

Meme coins are surging, racking up year-to-date gains between 80% and 1,800%. Trading volume is also booming, tripling year-over-year to a hefty $11 billion weekly.(source)

World Markets

Italian construction growth slowed in March 2024 to 3.8% year-over-year, the least since May 2023. Monthly activity dipped slightly too. However, the quarter still saw a modest 1.5% expansion compared to the prior three months. (Istat)
Spanish consumer confidence hit an 8-month high of 84.5 in April, it reflects both growing optimism about the future (up from 89.1 in March) and a slight improvement in satisfaction with the current economy (77.6 vs 76). (CIS)
Mexican retail sales took an unexpected dip in March, falling 1.7% compared to last year. This missed analyst predictions and follows a previous month's gain. E-commerce and clothing sales suffered the most, while groceries and department stores saw a slight increase. (Inegi)
Chile's economy unexpectedly boomed in Q1, growing 2.3% year-on-year (beating estimates of 2.5%). This is their strongest performance since mid-2022. Both domestic demand (investment & consumption) and exports rose, while imports grew at a slower pace.

Currencies

The dollar rose against other currencies after hawkish comments from Fed officials, expectations for a rate cut in September dipped slightly.
Brazil's currency strengthened to 5.1 on the central bank's hawkish stance on interest rates (to fight inflation) and a strong trade surplus are attracting investors. Positive signs from China's economy add to the boost.
The Mexican peso got stronger reaching one-month-high at 16.6 due to the central bank's hawkish stance on high interest rates (11%) to combat rising inflation (4.65%). This might delay a rate cut despite a slight dip in core inflation (4.37%).

Commodities

Gold prices skyrocketed to a new record high of 2,440 fueled by heightened geopolitical tensions following the perceived Iran's power crises and Saudi crown prince's postponed trip. Strong central bank buying, especially by China, adds to the gold rush.
Silver hit a decade high of $32/oz, fueled by rising gold, expected Fed rate cuts, safe-haven demand due to Mideast tensions, and strong solar panel industry growth.
Copper prices soared to new ATH of $5.15 per pound on worries about shortages. Strong demand and limited supply due to China's efforts to combat a housing crisis and focus on infrastructure projects fueled bullish sentiment. Tight supply in China, the world's top producer, further intensified concerns.
Natural gas prices soar to a 4-month high (2.75) on rising demand for cooling and exports. Production dips due to lower activity by companies, but stockpiles remain well above average
Tin prices hit a new high above $34K per tonne, driven by strong demand and supply disruptions. Indonesia's licensing delays and unrest in Myanmar and DR Congo are squeezing supply, while China's growing appetite for the metal in AI chips adds fuel to the fire.
Aluminum prices skyrocketed, nearing a two-year high, due to a global supply squeeze. Stockpiles in Malaysia dwindled after sanctions on Russia, and potential power shortages in China added to concerns about aluminum availability.