Wall Street shows a positive Monday pre-market session with a fresh wave of optimism over artificial intelligence helping boosting big tech stocks. Markets look ahead key policy decisions from the Federal Reserve, Bank of Japan and Bank of England.
We see solid gains in the US, with the S&P 500 trading 0.7% higher, the Nasdaq 100 even more than 1.1% in the green with Apple (+ 1.0%) and especially Alphabet (+ 5.1%) benefiting from alleged talks to integrate Google's Gemini AI engine into the iPhone. Both tech giants have disappointed with recent AI announcement and first product launches but have the capacity to be leaders in the AI development and integration. Also other AI connected stocks, especially chip stocks benefit from today's boost in AI hype.
Overall, however, we will still see investors acting with caution as the the Bank of Japan will announce it's interest decision on Tuesday and the Fed follows on Wednesday. On Thursday, the Bank of England will announce it's interest rate decision. It will thus be a key week that will strongly influence the rate outlook of these three major central banks.
Also the reserve Bank of Australia will announce it's rate decision – but it will be a no-decision I thus expect limited impact.
Inflation data from the Eurozone again confirmed that the current price pressure is nearing the ECB target. ECB rate cuts in June seems very possible. On the other hand, there is a bit of risk, with markets having to further reduce Fed rate cut expectations.
In commodities, oil prices hit a fresh four-month high then saw slight profit taking – we bought the dip and expect oil to remain bullish. Also better-than-expected economic data from China helped expectations for the global economy and China being able to accelerate after months of weakness. Gold saw some selling in the previous week with yields rising, but overall remains supported. Buying meaningful dips remains the right strategy for gold. Bitcoin on the other hand has become a bit more fragile which could result in stronger profit taking waves.
👁 ROB'S MARKET OVERVIEW:
March 18, 2024
🌐/🇺🇸 Global Markets ↗️/➡️ (strong early gains then consolidation)
Cyclical / Luxury Stocks ↗️/➡️
Tech/Growth Stocks ↗️ (tech in rebound mode)
Financial Stocks ↗️ (financials remain bullish)
Defensive Stocks ➡️
Energy Stocks ↗️ (energy remains bullish)
Materials Stocks ↗️/➡️ (benefiting from China hopes & rebound in commodity prices)
💱 Forex
AUD, CAD ↗️/➡️
EUR ➡️/↗️ (short-term slight recovery gains; overall, however, limited upside potential)
USD ➡️ (keeps last week's gains)
GBP ➡️
JPY ↘️/➡️ (15 bps rate hike priced in – slight losses after recent gains)
CHF ➡️/↘️
⚒ Commodity Markets ↕️/↗️
Oil prices ↗️
Natural Gas prices ↗️
Metal prices ↕️
Gold ↗️/➡️ (remains overall bullish – short-term some profit taking possible if yields rise further)
⚡️Cryptos ↕️ (Very volatile; more panic profit taking waves likely)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
Your Robert
