Monday's Markets Update (June 24, 2024)

25 Jun 2024 by rate3

On Monday, stocks dipped, with tech leading the decline. Investors are waiting on inflation data and Fed comments this week. Energy stocks rose while Nvidia fell further. Internationally, oil is rising due to geopolitical tensions, the dollar is at a two-month high, and the yen dropped to a 34-year low. BTC price fell below $60K, its lowest in two months, as investors pulled money out of BTC ETFs due to doubts about interest rate cuts. Major sell-offs by the German government and Mt. Gox added to the price decline.

Details

Texas manufacturing contracted at a slower pace in June. While production ticked up and orders improved, factories utilized less capacity and employment dipped slightly. Despite ongoing price and wage pressures, manufacturers are more optimistic about future activity. 1Y trend: "Side" DFed

Crypto

Investors are pulling money out of crypto for the second week, totaling $1.2B. BTC saw the most outflows ($630M), ETH ($58M) also faced a downturn. Some altcoins saw inflows (Solana, Litecoin, and Polygon - $2.7M, $1.3M, and $1M), with investors viewing their recent price slump as a buying chance. (source)

World Markets

German business confidence fell in June, with a surprise drop in the Ifo Business Climate Index. The decline reflects pessimism among companies, particularly in manufacturing and trade. This suggests the German economy is struggling to gain momentum. 1Y trend: "Down" (Ifo)
Argentina's economy contracted by 5.1% in Q1, its worst performance since 2020. The decline was driven by significant drops in manufacturing, construction, retail, and financial services. However, the agriculture sector rebounded with a 10.2% growth due to an end to a historic drought that affected grain production. On a quarterly basis, GDP fell 2.6%, following a 1.9% decline in the previous quarter. 1Y trend: "Down" (Indec)

Currencies

The dollar dipped to 105.6 after rising previous week. The strong economy and the Fed's wait-and-see approach on rate cuts are pushing the dollar to near two-month highs. Solid business activity data, particularly in services, is fueling investor concerns about continued Fed's high rates compared to recent easing by other central banks. Now traders are waiting on inflation data and Fed comments to decide if interest rates will be cut. 1Y trend: "Up"
The Japanese yen weakened near a 34-year low (160 to USD) as the central bank debates raising interest rates. Some want a hike to fight inflation, but others are cautious. The bank will provide a plan to unwind its stimulus program next month. 1Y trend: "Up"

Commodities

Oil prices rose over 1% to $81.63 per barrel. Strong summer demand, worries about supply disruptions due to Middle East tensions and attacks on refineries, and a potential drop in global oil stocks are driving prices higher. A stronger dollar is limiting gains, but a force majeure declared by Ecuador on oil exports is adding upward pressure. 1Y trend: "Up"
Steel prices in China hit a two-month low in June (below CNY 3,400 per tonne) due to a slump in the property market. Home sales and prices are down significantly, and government efforts to revive the market are raising doubts due to limited funding. 1Y trend: "Down"