Global equities and US equity futures are little changed as investors awaited fresh impetus after a week in which the S&P 500 / Nasdaq 100 broke new records and most European equities and the Nikkei 225 narrowly missed this mark.
We see the markets in Europe as largely stable. The DAX, for example, was able to defend the important 17000 mark, although it received no support from New York. In the Asia-Pacific region, equities mostly rose and closed in the green for the third time. The Chinese mainland benchmark CSI 300 Index recovered from earlier losses on the first trading day after the New Year break. Despite robust travel and tourism data in China pointing to an upturn in consumption, Chinese markets started Monday's trading with slight losses.
Futures on the S&P 500 and Nasdaq 100 rose slightly, rebounding somewhat from losses at the end of last week, but moves are muted as regular trading remains closed for Washington's Birthday.
The main focus this week will be on Nvidia's earnings report on Wednesday. The earnings report could have a major impact on Wall Street and even global markets in the second half of February – traditionally a weak period for equities.
Among individual stocks in Europe, AstraZeneca climbed more than 3% after trial data showed its drug Tagrisso slows disease progression in lung cancer patients. German defense contractor Rheinmetall AG rose as much as 4% after announcing the opening of a new plant in Ukraine. Banco Santander rose after it launched a share buyback.
Equity markets have so far not reacted strongly to the recent sharp rise in yields following the release of a series of robust US economic data, signs of more stubborn inflation (in the US) and hawkish comments from Fed policymakers. Investors remain optimistic, especially with regard to further healthy growth in corporate earnings in the US following a strong earnings season.
Swap markets now expect only around 90 basis points of rate cuts from the Fed for 2024 – down from more than 150 basis points at the beginning of the months. Interest rate cut expectations for the ECB have also fallen from 150 basis points to around 100 basis points.
Data from the Chinese economy and possible further massive stimulus measures by Beijing to support the ailing Chinese economy will also be important for the performance of global equities. Today's rather weak start (at least with a positive close) shows signs of another short-lived support for the Chinese markets.
Oil prices fell at the start of the week, but have now turned positive again and WTI is trading near its February highs. I expect further gains in oil prices. The ongoing tensions in the Middle East continue to support oil prices and are also helping the gold price to recover further, as we predicted.
👁 ROB'S MARKET OVERVIEW:
February 19, 2024
⚠️ US markets closed due to Washington's Birthday (Presidents’ Day)
🌐 Global Markets ↕️ (mixed, overall little changed)
Cyclical Stocks ➡️
Tech/Growth Stocks ↘️/➡️
Financial Stocks ↗️/➡️
Defensive Stocks ↗️/➡️
Energy Stocks ↗️
Materials Stocks ↕️ (mixed, with iron ore prices lower)
💱 Forex
AUD, CAD ↗️/➡️ (benefiting from slight China boost)
GBP, JPY ↗️/➡️ (slight rebound after recent losses)
EUR, USD, CHF ➡️
⚒ Commodity Markets ↕️
Oil prices ↕️/↗️ (remains supported)
Natural Gas prices ↘️/↕️ (ongoing very warm temperatures weigh on natural gas demand / prices)
Metal prices ↘️ (weakness in iron ore / steel prices overall weigh on industrial metal prices)
Gold ➡️/↗️ (remains in recovery mode – will not move much above $2,020 today)
⚡️Cryptos ➡️ (remains in bullish price channel – today sideways)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
Your Robert
