We are seeing the markets we expected with traders not making bold moves ahead of Friday's PCE data and general concerns that the Fed's preferred inflation measure is the next hot inflation report. Also, a speech by Federal Reserve Governor Christopher Waller titled “There's Still No Rush” makes one wonder if the Fed is really on track for a first rate cut in June. The USD strengthened and the yield on the 2-year US Treasury also rose by a not inconsiderable 5 basis points.
Wall Street has hardly changed and will probably open flat on Wednesday after the positive development. Markets in Europe ended the quarter close to record highs. It was another very strong quarter for global equities.
Markets are in a strange situation as important data falls on a holiday tomorrow. A potentially hot inflation report poses significant downside risk to equities on fears that inflation could accelerate again and interest rates could stay higher for longer.
USD strength caused several currency pairs to fall through key levels, including the EUR/USD, which fell below 1.08000 and to its lowest level in five weeks.
Following a slew of US data (GDP growth, initial jobless claims, Michigan consumer sentiment, etc.), there will be some volatility today, but ultimately the market awaits tomorrow's key inflation data.
We expect cautious trading, which will support the USD and gold prices (although a stronger USD will lead to temporary dips), as well as some profit taking in equities – especially interest rate sensitive stocks – i.e. growth/tech/cyclical stocks.
NYSE trading hours will be shortened today and close three hours earlier.
👁 ROB'S MARKET OVERVIEW:
March 28, 2024
🌐/🇺🇸 Global Markets ➡️/↘️
Cyclical / Luxury Stocks ➡️/↘️
Tech/Growth Stocks ➡️/↘️
Financial Stocks ↗️/➡️
Defensive Stocks ➡️/↗️
Energy Stocks ↗️/➡️ (benefiting from a rebound in oil prices)
Materials Stocks ➡️
💱 Forex
USD ↗️ (remains supported ahead of US PCE data)
JPY ➡️ (traders remain at the sideline with concerns about more hawkish BoJ talk)
EUR, GBP, CAD ↘️/➡️
AUD, CHF ↘️
⚒ Commodity Markets ↕️
Oil prices ↗️/↕️ (remains bullish; May see some headwinds as USD strengthens)
Natural Gas prices ➡️ (remains volatile and bearish)
Metal prices ➡️/↘️ (headwinds due to stronger USD)
Gold ↕️/↗️ (stronger USD will lead to temporary losses / remains bullish)
⚡️Cryptos ↕️ (continues to hover near $70K)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
Your Robert
