Wednesday's Markets Update (22 May, 2024)

23 May 2024 by rate3

On Wednesday, tech stocks surged after Nvidia's strong earnings. The broader market remained cautious as Fed minutes signaled potential interest rate hikes to fight inflation. Cryptocurrency prices are taking a dip. Bitcoin and Ether are both down.

Details

Existing home sales dipped 1.9% in April to a 3-month low, despite rising overall prices. The high-end market thrived with more inventory and a 40% sales jump. Overall stock rose, pushing supply to a 3.5-month level.

World Markets

Indonesia kept interest rates high (6.25%) to control inflation and currency stability. Domestic economy grew 5.11% in Q1 2024, but the currency (Rupiah) weakened due to global uncertainties.
South Africa's inflation dipped again to a 4-month low of 5.2% in April, but remains above the central bank's target. Food price increases slowed, while some categories like restaurants and transportation saw price hikes. Core inflation excluding food and energy also fell slightly.

Currencies

The dollar surged to a one-week high (104.9) as Fed minutes signaled continued high interest rates. Worried about inflation, the Fed expects a longer road to control it, pushing down chances of a rate cut this year. This hawkish stance strengthened the dollar against major currencies.
The Euro weakened against the dollar as the Fed signaled continued high interest rates, while the ECB eyes a rate cut in June. Europe's inflation cools (down from 7% to 2.4%) and avoids recession, potentially boosting the Euro later.

Commodities

Gold prices are losing their shine. Fears of the Fed raising interest rates (hawkish Fed) are outweighing factors that usually boost gold (safe-haven demand, central bank buying). Fed minutes show they're worried about inflation staying high, making rate cuts unlikely.