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European Daily Market Review

European markets were mixed and little changed for the most part as investors took a pause ahead of the Federal Reserve’s monetary policy decision in the U.S., due out later today.

By the end of the session the pan-European Stoxx Europe 600, the broadest measure of European equities, was nearly unchanged with a slight gain of just 0.02%. Germany’s DAX ended the day 0.2% higher but the CAC 40 in France underperformed as it declined by 0.5%. In Italy the FTSE MiB added 0.1%, and in Spain the IBEX 35 outperformed as it rose by 0.5%.

Chemical manufacturers were in the spotlight in Germany with the best performers in Germany’s DAX being chemical manufacturers BASF with a gain of 2.5% and Covestro with a 2.2% advance. At the other end of the index adhesive and consumer goods firm Henkel saw its shares drop by 2.2%, while integrated arms manufacturer Rheinmetall suffered a 2.1% loss.

Over on the CAC 40 in France the best performance of the day came from management consulting firm Teleperformance, with shares finishing 2.7% higher. Materials and tire manufacturer Michelin also outperformed with a gain of 1.8%. Luxury goods manufacturer Kering saw its shares tumble 11.9% lower after warning of sharply lower revenue from its Gucci brand due to declining sales in Asia.

London’s FTSE finished nearly unchanged as it edged lower by a scant 0.01%. That came after U.K. inflation unexpectedly declined more than expected, hitting its lowest rate since 2021. At the top of the index was financial services provider St. James Place PLC with a gain of 4.5%. That gain was evenly offset by the 4.5% loss from the worst performer in the index, which was multinational insurance provider Prudential PLC.

U.S. Daily Market Review

U.S. markets held steady near unchanged levels for most of the session as investors waited to hear the latest from the Federal Reserve. When the report was released at 2pm EST markets headed steadily higher, with the Fed holding interest rates unchanged as expected, while also indicating that there will be three rate cuts by the end of 2024. The rally puts markets back into record territory after some weakness ahead of the Fed decision this week.

Heading into the final hour of trading in New York the S&P 500 is holding a 0.6% gain, the Nasdaq is 0.9% higher, the Dow Industrials are up by 0.8%, and the small cap Russell 2000 is also enjoying a 0.8% advance.

On a per sector basis nearly all eleven of the S&P subsectors are trading in positive territory, with only the healthcare sector showing a loss of 0.5%.

Leading the charge higher today is the consumer discretionary sector, which trades 1.4% higher on expectations for lower interest rates to provide some relief to consumer’s wallets. Communications services and industrials are also performing well, trading 1.1% higher. Next up is the financials, which are trading 1% higher, even though lower interest rates lower their revenue potential.

Rounding things out we have the materials sector with a 0.9% gain, technology trading 0.8% higher, real estate rising by 0.3%, and the consumer staples and energy sectors edging higher by a slight 0.1%.

Gold is also enjoying a 1.1% advance today as lower interest rates are largely positive for the yield-less precious metal. Elsewhere oil is falling off a five-month high, losing 2% on Wednesday as a stronger U.S. dollar is weighing on the dollar denominated commodity.

Cryptocurrency Daily Market Review

Crypto markets looked as if they were headed for a third consecutive losing session, with Bitcoin falling below the $65,000 level early in the session. However, the latest news from the Federal Reserve, in which the central bank kept interest rates on hold in the U.S. while forecasting three upcoming rate cuts by the end of 2024, reversed course for the market. By late afternoon in the U.S. the market was back in the green for the day, although the weekly picture still shows losses for many of the top cryptocurrencies.

Within the top cryptocurrencies Bitcoin (BTC) was able to reverse its early losses to trade 2% higher for the day, although it is still holding a 10% weekly loss. Ethereum (ETH), the second largest cryptocurrency by market capitalization, is up 1.7% for the day, while trading down by 15% for the week. The rest of the top ten cryptocurrencies also had gains, although there were some pockets of weakness.

Solana (SOL), which recently leapfrogged into the fourth position was 1.1% higher and has a 13% gain over the past week. Binance Coin (BNB) was enjoying a 1.8% increase for the day, although it remains down by 9% for the week. Ripple (XRP) was flat on the day, trading nearly unchanged and with an 11% loss for the past week.

Cardano advanced by 2.8%, though it is also trading 15% lower over the past seven days. Dogecoin (DOGE) was the best performer in the top ten altcoins, gaining an impressive 8.5% for the day, though remaining 13% lower for the week. Finally, Avalanche (AVAX) was the lone loser in the top ten altcoins, falling by 5.4%, although it is the only weekly winner with a 2.5% weekly advance, so Wednesday’s loss was likely at least partially due to profit taking.

Japanese Yen Hits Lowest Level Of 2024

The Japanese Yen weakened to its worst level of 2024 against the U.S. dollar on Tuesday, climbing above the 150 level and approaching 151 by the end of the normal trading day in the U.S. The drop in the Yen occurred after the Bank of Japan delivered a historic rate hike overnight that ended the world’s last negative interest rate policy. The move also boosted Japanese bonds and equities overnight.

The Yen has lost more than 1% of its value against the U.S. dollar over the past 24 hours, reaching a low of 150.96 mid-afternoon in New York before pulling back slightly from the 151.00 level. Notably, Bank of Japan Governor Kazuo Ueda said that while it’s important to keep rates low to support the Japanese economy, it is possible that more rate hikes could be coming if inflation accelerates.

Markets were largely expecting this move away from negative interest rates, with 90% of central bank watchers calling for the central bank to end its negative interest rate policy. Adding to the likelihood of the rate hike was the recent larger than expected wage hike in Japan’s largest union during negotiations.

The drop in the Yen despite a rate hike was attributed to the fact that a rate hike was largely priced in already, combined with a dovish tone from the BoJ and the remaining large gap in rates between Japan and the U.S. The Yen was already slipping in the week leading up to the rate decision as traders are also seeing a decreased chance of rate cuts in the U.S.

The weaker Yen has also driven Japanese equities higher, with the Nikkei hitting its highest level ever, breaking a record that’s stood since 1989.

Asian Daily Market Review

Asian markets fell on Friday following overnight losses on Wall Street as stronger than expected inflation data dashed investor hopes for interest rates to begin easing sooner rather than later. The U.S. producer price index showed inflation is still running hotter than expected, meaning the Federal Reserve may hold off beyond its June meeting before cutting interest rates. With inflation looking stickier than hoped for it looks like the Fed will need to keep higher rates if they want to meet their 2% inflation goal.

Japan’s Nikkei saw a 0.3% pullback following the data, while the Yen retreated against the U.S. dollar. Shares of Softbank Group added 0.5%, while Sony shares edged higher by 0.1%. Among the major exporters Toyota gained 1.3%, Panasonic shares rose by 1.2%, and Canon tacked on 0.2%.

In Australia the S&P/ASX 200 finished the day 0.6% lower, with the big four banks mixed on the day. Shares of NAB climbed 0.9% higher and ANZ inched up by less than 0.1%, but Commonwealth Bank fell by 0.6% and Westpac was 1.1% lower. The major miners weighed on the broader market as BHP lost 1.5% and Rio Tinto retreated by 1.9%.

Mainland Chinese markets bucked the falling trend around the region, with the benchmark Shanghai Composite adding 0.5% and the smaller cap Shenzhen Composite finishing 0.6% higher. Over in Hong Kong the Hang Seng took its cues from the broader Asian region, dropping by 1.4%.

In South Korea the Kospi fell by 1.9% to lead losses for the region, while Taiwan’s Taiex lost 1.3% on the day.

Southeast Asian markets were mixed as Malaysia’s KLCI advanced by 0.6%, while Singapore’s Straits Times Index finished 0.4% lower.

U.S. Daily Market Review

The S&P-500 retreated today and was on track to end the week into a lower side.

Technology stocks came under pressure as inflation fears are still in the ahead of the Federal Reserve’s policy meeting next week.

The Dow Jones Industrial Average lost 210 points, or 0.5%.

The Nasdaq Composite fell 1%. The Nasdaq have shed 0.2% and 0.7%.

Shares of Amazon and Google-parent Alphabet also fell. Nvidia managed to recovery around 1%. The chipmaker has whipsawed this week as the markets are concerned with the stock’s valuation and profit figures.

Dollar General is dropped back on self-checkout as it tries to curtail retail theft across its stores. The company will remove self-checkout registers from 300 stores that have registered troubles.

US airline stocks are heading for the worst two-week falling pattern since October. This is the case of volatile fuel prices and rising issues with Boeing Co.