The markets are holding back and preparing for more economic data to be released on Friday (when the markets are closed) as well as the end-of-quarter rebalancing. We see Wall Street slightly up, trimming losses from the start of the week. European equities are almost unchanged / slightly positive. Another strong quarter is coming to a close – we could see a bit more volatility later today as pension funds are also expected to sell $32 billion worth of stocks to rebalance their positions – one of the largest rebalances in history and possibly another reason why stocks are getting more pressure along with the upcoming PCE data, which many investors fear will be the next hot inflation data.
The other markets are also moving mostly sideways. The JPY initially fell to a 34-year low today (against the USD) but then recovered on speculation that the Japanese authorities may be preparing to intervene to support the currency. At the moment, I see a lot of talk that could temporarily support the JPY, but no action that could support the JPY in the longer term.
Wall Street has gotten off to a good start and continues to trade near record highs – similar to the markets in Europe and Japan. Nevertheless, movements have been muted this week and the market continues to trade cautiously ahead of the release of the Federal Reserve's preferred inflation indicator on Friday. We expect further selling in the US equity markets and for the USD to regain some traction. While the stronger USD weighs on gold, uncertainty continues to keep the gold price up.
While more and more analysts see the end of the current rally, I believe that the mega-cap stocks (rally in big tech companies) on Wall Street could still go further and that the strong gains still have room to spill over into other sectors and other markets (such as Europe and Asia). For now, however, it is important to recognize the nervousness in the market.
Oil prices have fallen after recent strong gains as US inventories show signs of rising. I expect a general deterioration in risk sentiment, which will temporarily weigh on (US) equities and commodities.
👁 ROB'S MARKET OVERVIEW:
March 27, 2024
🌐/🇺🇸 Global Markets ↗️/➡️/↘️ (good start into the day – profit taking in second half of US trading)
Cyclical / Luxury Stocks ↗️/➡️/↘️
Tech/Growth Stocks ↗️/➡️/↘️
Financial Stocks ↗️/➡️
Defensive Stocks ↗️/➡️
Energy Stocks ➡️/↘️ (temporary more headwinds due to lower oil & gas prices)
Materials Stocks ↘️ (temporary more headwinds due to lower commodity prices)
💱 Forex
USD ↗️ (likely getting some traction again in cautious trading ahead of PCE data)
EUR ↗️/➡️
CAD, GBP➡️
JPY ↕️/↘️ (losing after initial recovery gains)
AUD, CHF ↘️
⚒ Commodity Markets ↘️/↕️
Oil prices ↘️/➡️ (temporary headwinds)
Natural Gas prices ↘️ (remains volatile and bearish)
Metal prices ↘️ (temporary headwinds on cautious trading / stronger USD)
Gold ↕️/↗️ (stronger USD will lead to temporary losses / remains bullish)
⚡️Cryptos ➡️ (in sideways for now – searching for guidance)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
Your Robert
