We are seeing a slow start to a busy week after markets in Europe, Wall Street and Japan hit a series of record highs following a strong earnings season, confirmation that AI is a strong driver of revenue growth and hopes that rate cuts remain on the table as inflation appears to be coming under control.
There is little change in pre-market trading in New York, although chipmakers, which have been at the forefront of the recent rally, continue to make gains. Nvidia is trading more than 2% higher in pre-market trading, continuing its record rally. Apple and Tesla are down more than 1.5% in pre-market trading. The European Union fined Apple €1.8 billion ($2 billion) and Elon Musk's package was rejected by a judge in Delaware. Both the S&P 500 and the Nasdaq 100 hit record highs on Friday.
We remain bullish on equities overall, partly because inflation concerns, which have been one of the few headwinds for US equities, have eased after the latest PCE report, which was in line with expectations. However, markets are becoming increasingly mixed. Individual company news will become more important again.
Equities in Europe are also continuing their record rally – we are now seeing six consecutive weeks of rising markets in Europe with more gains than we have seen in six weeks. The Nikkei has risen well above 40,000 – a new record high. The stock markets in Asia are also predominantly positive.
We are seeing a stabilization of yields and a slight increase in interest rate cut expectations, which continues to drive the stock market rally. Investors are now looking for further evidence of rate cuts, such as Fed Chairman Jerome Powell's testimony to Congress this week. The ECB holds a meeting on Thursday. There is also a raft of economic data due this week, including the monthly US labor market data (NFP) on Friday.
The positive market sentiment is also reflected in the crypto market: Bitcoin has surpassed the $65,000 mark, prompting traders to bet that the cryptocurrency will soon surpass the record price of almost $69,000 reached during the pandemic. Gold has maintained Friday's strong gains for now, but faces a slight headwind from stabilizing, slightly rising yields. Oil prices are unchanged but remain in a general uptrend.
👁 ROB'S MARKET OVERVIEW:
March 04, 2024
🌐/🇺🇸 Global Markets ↕️ (markets become more mixed)
Cyclical / Luxury Stocks ↕️
Tech/Growth Stocks ↕️ (also tech stocks more mixed; AI/chip stocks continue to outperform)
Financial Stocks ↘️/➡️
Defensive Stocks ↘️/➡️
Energy Stocks ➡️/↗️ (energy with more room to catch up to tech gains)
Materials Stocks ↘️/➡️
💱 Forex
EUR ↗️ (recovering from recent selling / tailwinds from hotter-than-expected inflation data)
AUD, GBP ↗️/➡️
USD, CAD ➡️
CHF, JPY ↘️/➡️
⚒ Commodity Markets ↕️
Oil prices ➡️/↗️
Natural Gas prices ↗️
Metal prices ↕️
Gold ↗️/➡️/↘️ (gold short-term overbought; resistance at $2,095 – $2,099; medium-term bullish)
⚡️Cryptos ↕️/↗️ (remains volatile but more gains to be expected)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
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