The equity rally continued on Wednesday as earnings optimism continues to outweigh market concerns that US interest rates will remain high for longer or that current valuations are excessive. The latest slightly cooling economic data from the US also eased concerns that the Fed may not cut rates again this year. The main focus will now be on Facebook owner Meta Platforms, which will publish its first-quarter results later today (after the bell). The earnings season has picked up speed and driven technology stocks higher.
Tesla gained around 10% in pre-market trading after Tesla CEO Elon Musk promised to bring cheaper vehicles to market this year and also unveiled some of his many other plans, which were apparently so exciting that the market looked past the fact that the EV pioneer missed expectations by a wide margin last quarter. Key stocks Nvidia and Meta were also both up more than 2%. Boeing rallied about 3% after the company reported a less dramatic cash burn than analysts had expected. Visa
and Texas Instruments rose more than 2% and 6%, respectively, after reports beat expectations. Earnings from Dutch multinational semiconductor materials company ASM after better than expected orders also lifted sentiment in the key chip sector.
Declines at Lloyds Banking Group weighed on the financial sector. Luxury goods stocks also fell after Kering announced a slump in profits due to declining sales at Gucci, its biggest brand.
We expect the recovery rally to continue for the time being, with tech/growth stocks leading global equities. Gains in mega caps will help the S&P 500 rise overall, but we see mixed markets today. Investors are optimistic that Meta can deliver again – I expect the same. IBM will also release results today after the close.
The JPY remains weak and continues to fall. FX markets have also been influenced by slightly lower concerns that the Fed will not cut rates again this year.
After a cooler than expected US economic data yesterday, US durable goods orders rose 2.6% in March, above estimates. Ahead of Friday's PCE data, investors continue to expect the Fed to cut interest rates in September.
The oil price stabilized after a strong session. Demand for gold as a safe haven declined as market sentiment improved and concerns that the Fed could keep interest rates high for longer eased slightly. After gold's recent outperformance, the focus will now be primarily on the stock market and whether the current rally can continue. Short-term gains in gold will be met with profit-taking.
👁 ROB'S MARKET OVERVIEW:
April 24, 2024
🌐/🇺🇸 Global Markets ↕️/↗️
Cyclical / Luxury Stocks ↕️/↗️
Tech/Growth Stocks ↕️/↗️
Financial Stocks ↘️/➡️
Defensive Stocks ↘️
Energy Stocks ↘️/➡️ (remains in recovery mode)
Materials Stocks ↗️/➡️
💱 Forex
AUD ↗️/➡️ (remains bullish)
USD ➡️/↗️ (stabilizes after yesterday's slide; Strong durable goods order support USD)
EUR, GBP ➡️
JPY ↘️/➡️ (remains bearish – no major bets ahead of BoJ policy update)
CHF ➡️/↘️
⚒ Commodity Markets ↕️
Oil prices ↘️/➡️
Natural Gas prices ↘️/↕️
Metal prices ↗️/➡️
Gold ➡️ (gains will hit profit taking with risk sentiment remaining positive)
⚡️Cryptos ↕️ (remains volatile in $64K – $68K range)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
Your Robert
