Page 105 – XTrade

European Daily Market Review

A European markets partly advanced today as investors reviewed U.S. inflation data.

European stocks markets are in their eighth consecutive week of rallies, the longest since 2018.

The markets are boosted by predictions thatby conviction that euro interest rates could tumble in the coming months.

The German DAX inclined 45.28 or 0.25% from 17,987.The French CAC-40 gained 24.77 or 0.30% from 8186.

FTSE-100 slipped 4.27 or 0.06% from 7,738.Shares of Porsche AG jumped yesterday after the German luxury carmaker forecast a tougher 2024, but also reported a dividend.

The pan-European Stoxx 600 fell 0.2% higher at around 10:30 a.m. London time, paring earlier losses.

Shares of Vonovia dropped 6% this morning shortly after Germany’s largest landlord announced its biggest ever annual retreat.

In fact, the residential real estate company on Thursday declared an annual loss of 6.76 billion euros ($7.35 billion) for 2023.

Ukraine’s armed forces attacked a small oil refinery in Russia’s Kaluga region with drones this morning.

Kyiv has carried out a string of drone attacks on major Russian oil facilities in the last week, hoping to harm the Russian economy.

Microsoft Adding To Its Generative AI Product Line

Shares of Microsoft were at the top of the Dow Industrials on Thursday, hitting a new all-time high and adding 2.4% by the close. The rally came as the company announced it will be releasing Copilot for Security, an AI tool to help businesses fight cybersecurity attacks, on April 1 this year. Gains came despite an overall bearish attitude on Wall Street Thursday in response to stronger than expected producer price inflation data.

Copilot for Security was first announced by Microsoft a year ago in March 2023. The generative AI tool is used to help businesses of all sizes quickly respond to and defend from cybersecurity attacks. Microsoft plans on offering the tool through a pay as you go subscription model. This can help smaller businesses access the tool, and as the business grows it can update its usage and costs according to its needs and budget.

Wells Fargo analyst Michael Turrin, who rates Microsoft overweight with a $460 price target, said in a note to clients that he believes this type of pricing model will help encourage adoption, similar to what’s been seen with many other service as a subscription products. The $460 price target represents a roughly 10% upside from Thursday’s close.

J.P. Morgan analyst Mark Murphy also believes that Copilot for Security will be positive for Microsoft’s growth. Murphy also has an overweight rating on the stock with a $440 price target. He sees a strong product/market fit for the generative AI product due to its code generation, pattern recognition, and automated remediation capabilities.

Microsoft shares are up 13.1% in 2024 versus a 3.2% gain for the Dow Industrials.

Oil Rallies On U.S. Drawdown And Attacks On Russian Refineries

Crude oil prices were up nearly 3% on Wednesday, reaching a four-month high after data showed a larger than expected drop in U.S. crude and gasoline inventories. Also spurring gains for the market was news of attacks on Russian refineries by Ukraine forces, with at least one Rosneft plant damaged.

The global benchmark Brent crude rose $2.11, or 2.6%, to settle at $84.03 a barrel, while the U.S. benchmark West Texas Intermediate (WTI) crude rose $2.16, or 2.8%, to settle at $79.72.

The gains came following a report from the U.S. Energy Information Administration (EIA) showing a drop of 1.5 million barrels of crude from U.S. stockpiles for the week ending March 8. Consensus expectations were looking for a smaller drop of 1.3 million barrels.

Additionally, the EIA data showed that 5.7 million barrels of gasoline were pulled from stocks in the same week. Analysts were forecasting a far smaller drawdown of 1.9 million barrels.

The drop in gasoline stockpiles was most concerning to traders as seasonal maintenance outages loom, and the summer driving season is just around the corner. Some analysts are now projecting far higher gasoline prices over the summer months.

In other news, Ukraine forces struck at Russian refineries for a second consecutive day of heavy drone attacks, causing a fire at one of Rosneft’s largest refineries. The attacks come just days before Russia’s presidential elections, with current president Vladimir Putin expressing his concerns that the attacks are an attempt to disrupt the elections.

Damage to Russia’s refining capacity could cause a drop in Russian exports of diesel as well as increased Russian imports of gasoline, which would cause a global increase in crude prices.

Cloud Infrastructure Provider Oracle Rallies On Earnings Beat

One of the lesser talked out tech companies rallied on Tuesday, leading the market higher after reporting better than expected third fiscal quarter earnings. The stock we’re referring to is Oracle, a cloud services platform and the third largest software company in the world by revenue. Shares jumped 11.8% higher in Tuesday’s session, reaching a new record high of $127.54 a share.

The prior record for Oracle was set back in September 2023, and Tuesday’s gain was the largest single day percentage gain since December 10, 2021, when shares closed 15.6% higher.

Oracle reported revenue of $13.28 billion, which was shy of analyst expectations for $13.3 billion. However, adjusted earnings per share were $1.41, exceeding the $1.38 per share that analysts were expecting.

Adding to the positive sentiment for the stock was an increase from $135 to $150 in the price target for Oracle from Deutsche Bank analysts. The analysts reiterated their buy rating on the stock, highlighting the demand for Oracles cloud infrastructure business.

Analysts at UBS also lifted their price target on the stock from $130 to $150 a share while reiterating a buy rating on the stock. In a note to investors the analysts said they are “encouraged by the top-line turnaround, OCI growth, AI backlog numbers and by the prospect that the big core database business might benefit in 2024/2025 from an AI-driven cloud migration lift.”

Analysts at Bernstein Research were most bullish on the stock’s potential, lifting their price target from $147 to $159 a share, while also reiterating an equivalent buy rating. They were also positive over the growth seen at Oracle, and felt encouraged by management’s comments that supply continues to outstrip strong demand.

Asian Daily Market Review

Asian market closed mixed following overnight gains on Wall Street that sent the S&P 500 and Nasdaq both to new record levels. Markets in Japan and Australia also hit their own new record highs as investors are betting on lower interest rates coming. The latest optimism was sparked by U.S. PCE inflation data for January, which showed easing inflation and bolstered hopes for a June interest rate cut.

Japan’s Nikkei outperformed the region, rising by 1.9% to a new all-time high. Shares of Softbank Group added 1.3%, while Sony shares jumped 2.1% higher. Among the major exporters Toyota was up by 1.6%, Panasonic rose by 3.2%, and Canon saw a more modest 0.2% gain.

In Australia the S&P/ASX 200 also hit a new all-time high, rising by 0.6% as investors are confident that the Royal Bank of Australia is done raising interest rates. The big four banks showed strength as ANZ added 1.1%, NAB rose 0.6%, Commonwealth Bank tacked on 0.8%, and Westpac edged up by 0.2%. The major miners performed even better, with BHP adding 2.3% and Rio Tinto advancing by 0.9%.

Mainland Chinese markets extended their gains even as PMI data showed the Chinese economy remained muted in February. The benchmark Shanghai Composite advanced by 0.4%, while the smaller cap Shenzhen Composite rose by 1.1%. In Hong Kong the Hang Seng reversed losses from the prior session as it gained 0.5% for the session.

In South Korea the Kospi fell by 0.4%, and in Taiwan the Taiex eased lower by 0.2%.

Southeast Asian markets also fell, with Malaysia’s KLCI recording a 0.9% loss and Singapore’s Straits Times Index losing a modest 0.2%.

U.S. Daily Market Review

The Nasdaq Composite jumped to an all-time peak today, rallying over its 2021 record.

Stocks advanced even as troubled regional bank New York Community Bancorp dropped 25.9% after the bank reported a leadership change and disclosed issues with its internal controls.

In March Wall Street as stocks set new records, boosted by a promising inflation reading and a relentless tech rally.

Amgen and Nike retreated around 2.5% on weekly basis this week alone.U.S. debt is soaring at a massive rate and has shown no signs of slowing down.

The national debt jumped to $34,471,083,238,111.75 as announced by the latest numbers coming from the Treasury Department. That is another gain of around $28.9 billion from the $34,382,148,207,560.53 figure reported the previous day.

Hewlett Packard Enterprise stock prices surged around 2% after fiscal first quarter earnings of 3 cents per share coming over initial forecasts.

In reality, Hewlett Packard registered $6.76 billion in revenue, under the Wall Street forecast of $7.11 billion.