The sharp sell-off on Wall Street is easing in pre-market US trading, but markets remain concerned about higher interest rates for longer and possible Israeli retaliation against Iran.
Economic data continues to underline the strength of the US economy and economic and sentiment data in Europe is also improving. The conflict in the Middle East has led to a flight to safety, higher energy prices and thus to fears of inflation. The persistently good US economic data has dashed expectations of an imminent interest rate cut by the Fed. However, as long as earnings remain solid – especially for the leading mega-caps – we see a sell-off driven mainly by caution.
US Treasury yields continue to rise, pointing to a general flight to safety and expectations of higher rates in the longer term. The USD also remains in demand as markets expect the interest rate differential between the Fed and other major central banks to widen again in the coming months.
For the time being, however, the markets remain fragile. We will continue to see short-term rallies met by profit-taking. Tesla shares continue to weigh on Wall Street / the Nasdaq after two of the electric car maker's top executives left the company in the biggest job cuts ever. Morgan Stanley rose 3% in pre-market trading after the company reported first-quarter net asset management revenue above analysts' average estimates. UnitedHealth led the gains and drove the Dow Jones sharply higher after the healthcare giant reported better-than-expected first-quarter revenue growth of nearly 9% year-on-year.
The ongoing nervousness on the market will continue to support the price of gold, which is rising again after Friday's sharp correction. In view of the ongoing uncertainty surrounding equities, the earnings season and geopolitical tensions, the gold price appears to be well on the way to breaking through the recent ATH again soon.
👁 ROB'S MARKET OVERVIEW:
April 16, 2024
🌐/🇺🇸 Global Markets ↗️/↕️
Cyclical / Luxury Stocks ↗️/↕️
Tech/Growth Stocks ↗️/↕️
Financial Stocks ↗️
Defensive Stocks ↗️/➡️
Energy Stocks ↘️/↗️
Materials Stocks ↘️/↕️
💱 Forex
AUD ↘️/➡️ (stabilize with risk sentiment improving; remains under pressure from a cautious market)
USD ➡️/↗️ (remains in demand due to rising expectations that Fed keeps rates higher for longer)
EUR, GBP ➡️ (stabilize but remain pressure from rising expectations that Fed keeps rates higher for longer)
CAD ↘️/➡️ (stabilizes as oil prices will likely soon find a bottom)
JPY, CHF ↘️/➡️ (remain pressured from expectations rate gap Fed – SNB – BoJ may rise)
⚒ Commodity Markets ↗️
Oil prices ↘️/➡️
Natural Gas prices ↗️/↕️
Metal prices ↘️/➡️
Gold ↕️/↗️ (benefits from ongoing uncertainty)
⚡️Cryptos ↕️ (remains volatile, pressure by high yields – likely to find some support soon)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
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