Equities in Europe and the US got off to a solid start on Thursday but, as in previous sessions, saw renewed profit-taking as investors remain concerned that US interest rates will stay high for longer, yields will rise, inflation will persist and earnings may fall, which would not justify the still high valuations in New York.
The focus remains on economic data. Initial jobless claims in the US were slightly below expectations – another sign of a tight US labor market. The Philadelphia Fed manufacturing index came in at 15.5, well above expectations. Another round of strong US economic data briefly weighed on Wall Street – but the overall picture remains the same: The US economy remains resilient, continues to grow rapidly and does not need interest rate cuts at this time.
We expect further dip buying today as stocks are also technically oversold after four days of losses (for the S&P 500).
Markets will also be watching for further comments from Fed officials. However, after Powell's hawkish comments on Tuesday, I expect a muted impact from further hawkish comments.
ASML's rather disappointing results weighed heavily on the semiconductor industry yesterday. Taiwan Semiconductor Manufacturing, on the other hand, gave a better than expected sales outlook (and also reported a profit increase – above expectations). TSMC stuck to its plans to spend up to $32bn by 2024, which should bring back expectations of continued growth in AI demand.
Oil prices continued their recent slide as investors became less concerned about further escalation in the Middle East. I see oil as oversold here. Gold also experienced a slight headwind from easing concerns of an all-out war between Israel and Iran, but remains bullish. We made another strong gold trade in the last session and will continue to look for good entry prices.
👁 ROB'S MARKET OVERVIEW:
April 18, 2024
🌐/🇺🇸 Global Markets ↕️/↗️
Cyclical / Luxury Stocks ➡️/↗️
Tech/Growth Stocks ➡️/↗️ (Tesla remains a drag in tech)
Financial Stocks ↗️/➡️
Defensive Stocks ➡️
Energy Stocks ➡️ (weighed down from temporary weakness in oil prices)
Materials Stocks ↗️
💱 Forex
AUD ➡️/↗️ (in recovery for now – with improving risk sentiment)
GBP ➡️/↗️ (in recovery for now – with improving risk sentiment + slower disinflation than in Eurozone)
CHF, JPY ↗️/➡️ (slight rebound after recent losses)
EUR, CAD ➡️
USD ↘️/➡️ (correction-losses continue for a bit but USD remains in demand)
⚒ Commodity Markets ↗️
Oil prices ↕️ (in oversold territory – will soon turn bullish again)
Natural Gas prices ↗️/↕️
Metal prices ↗️/➡️ (remain bullish)
Gold ↗️/↕️ (remains bullish and on track towards $2,400 – will see profit taking waves)
⚡️Cryptos ↕️ (remains (too) volatile in range $60K – $64.5K)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
Your Robert
