Daily Digest:
w/c 4 March 2024: US stock averages higher again to end the week, prodding at record levels; upcoming week's focus on the Fed's Powell testimony before Congress and the US Employment report

Stock indices dip and then bounce as global yield surge pauses

Intermediate

Macroeconomic/ geopolitical developments

  • Mixed data saw stocks lower and then rebound last week as durable goods orders posted their steepest decline since the April 2020 pandemic shutdowns.
  • Whilst the Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index (PMI) pushed higher in February for the first time since May 2022, and Services PMI fell less than consensus expectations, and indicated a modest expansion at 55.1.
  • Fed speakers continued their mantra of “higher for longer”, notably from Kashkari and Waller through the middle of the week.
  • But Raphael Bostic, Atlanta Federal Reserve President stated that he supported a 0.25% rate hike at the Fed’s March meeting, adding that the “Fed could be in position to pause by mid to late summer.”
Raphael Bostic

Global financial market developments

  • The major US stock averages dipped and rebounded last week, as did European indices, which retain a more bullish tone than their US counterparts.
dax
spx
  • US and European Bond yields were yet again notably higher last week, with the US 10yt breaking through the 4% level, but Bonds did revery to slightly lower yields on Friday.
10yr yield
  • The US Dollar Index dipped last week, consolidating gains since the strong early February rebound and rally from a multi-month low.
dxy
  • Gold bounced after the February plunge from a multi-month high.
gold
  • Oil posted a positive consolidation.
oil

Key this week

  • Central Bank Watch: Key focus this week will be Jerome Powell’s testimonies to Congress on Tuesday and Wednesday. We also get the Reserve Bank of Australia (RBA), the Bank of Canada (BoC) and the Bank of Japan (BoJ) interest rate decisions on Tuesday, Wednesday and Friday respectively.
Bank of Canada
  • Macroeconomic data: Friday sees the notable data release with the US Employment report, with German CPI also a standout on Friday, alongside UK GDP, Manufacturing and Industrial Production.
DateKey Macroeconomic Events
06/03/23EU Retail Sales
07/03/23RBA interest rate decision; Jerome Powell testimony to Congress
08/03/23German Retail Sales; EU Employment and GDP; ADP Employment Change; Jerome Powell testimony to Congress; BoC interest rate decision
09/03/23Japan GDP; China CPI
10/03/23BoJ interest rate decision; UK GDP, Manufacturing and Industrial Production; German CPI; US Employment report; Canada Employment report

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

Comments on this analysis

Your email address will not be published. Required fields are marked *