After yesterday's rally, which drove the S&P 500 and Nasdaq 100 to new all-time highs and brought the S&P within striking distance of the 5,000 mark, Wall Street is slightly in the red. Treasury yields rose slightly as traders prepare for another big Treasury auction. Overall, however, we see little to rattle the still-optimistic investors who are eager for further gains.
Initial jobless claims were not a surprise, but neither did they reflect Friday's very positive NFP data. Comments from the US Federal Reserve will continue to be closely watched, but there is little room for a more hawkish positioning after Fed Chairman Jerome Powell stated that a March rate hike is unlikely. Signs of stubborn inflation would create additional headwinds for a market that is very expensively valued and will face tight monetary policy for some time to come.
The overall positive market sentiment is also evident in risk-sensitive cryptocurrencies, as Bitcoin approaches $45,000 for the first time in nearly a month. US ETFs holding the digital currency continue to see a steady inflow of funds from investors who were initially disappointed that the market was showing less interest in Bitcoin ETFs than most had expected.
The higher yields have seen the USD recover yesterday's losses and remain in demand. The JPY weakened slightly after Uchida from the Bank of Japan said that a sharp rate hike is unlikely following the BoJ's rate policy change. I still see the JPY in a strong recovery phase in the medium to long term.
The higher yields have put some pressure on commodity prices and gold in particular. Overall, commodity prices are not showing the positive signs that Wall Street would point to. This is also due to the strong outperformance of the tech sector, which however will probably remain a driver for today as we expect further modest gains and the S&P 500 makes another attempt to cross the magic 5,000 line for the first time ever. Overall, however, we will see more mixed markets with muted movements.
👁 ROB'S MARKET OVERVIEW:
February 08, 2024
🌐/🇺🇸 Global/US Markets ↕️
Cyclical Stocks ↕️
Tech/Growth Stocks ➡️/↗️
Financial Stocks ↘️/➡️
Defensive Stocks ➡️
Energy Stocks ➡️/↗️ (mostly sideways / slight gains possible)
Materials Stocks ➡️
💱 Forex
USD, EUR ↗️/➡️
GBP, CHF, CAD ➡️
AUD, JPY ↘️/➡️
⚒ Commodity Markets ↕️
Oil prices ↗️/↕️ (with likely more resistance at $75.00 (WTI))
Natural Gas prices ↘️/↕️
Metal prices ↘️/➡️
Gold ↘️/➡️ (remains under pressure as yields show signs of rising further)
⚡️Cryptos ↗️/➡️ (found a higher range $44K – $45.5; remains overall slightly bullish)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
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