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 plunge, yield rise on hot inflation/ strong growth data

Beginner

Macroeconomic/ geopolitical developments

  • Friday saw the release of the US core (less food and energy) Personal Consumption Expenditures (PCE) which was up 0.6% in January, above consensus of 0.4% rise, plus the biggest increase since August 2022. In addition, December’s figure was also revised higher, which put the YoY increase, the Fed’s preferred inflation measure, up to 4.7%, the first pickup since September 2022.
Core PCE Jan 2023
  • The University of Michigan’s consumer expectations for February was revised higher to its highest level in over a year.
  • Interest rate and bond markets reacted to the data pushing to higher interest rate expectations for Fed and to higher yields across the U.S. Treasury curve.
  • The German Gross Domestic Product (GDP) data saw a decline of 0.4% compared with the previous three months, below the estimate of a 0.2% contraction, raising fears of a recession.

Global financial market developments

  • The major US stock averages plunged last week, whilst European indices saw notable losses too, extending the losses from early February.
sp500
  • US and European Bond yields were notably higher yet again last week.
  • The US Dollar Index stayed solid last week, extending gains since the strong early February rebound from a multi-month low.
dxy
  • Gold stayed negative to reinforce the early February plunge from a multi-month high.
Gold
  • Oil posted a negative consolidation.
  • Copper plunged lower, for a still negative tone.

Key this week

  • Central Bank Watch: No central bank activity of note.
  • Macroeconomic data: Wednesday and Friday are the notable releases with the global S&P Global and the US ISM Purchasing Managers Index (PMI) Manufacturing and Services data. We also get German (Wednesday) and EU (Thursday) Unemployment and CPI.
DateKey Macroeconomic Events
27/02/23US Durable Goods
28/02/23Australian Retail Sales; Canada GDP; US Consumer Confidence  
01/03/23Australian GDP; global S&P Global Manufacturing PMI; German Unemployment and CPI; US ISM Manufacturing PMI
02/03/23EU Unemployment and CPI
03/03/23Global S&P Global Services and Composite PMI; US ISM Services PMI

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

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