Jessica Amir
Market Strategist
Summary: Watch our video in under five minutes or read the text for what’s happening in markets, what to watch; plus potential trading and investing ideas to consider.
US stocks retreated led by a selloff in AI tech companies, with Google falling the most in three months (7.4%) on concerns of several new entrants coming to market. While on the other side- ‘surprise-surprise’ we had hawkish rhetoric from the Fed being breathed on markets. Four Fed officials stressed the need to keep raising interest rates, saying more had to be done to fight against inflation. Fed speakers Williams and Kashkari see the peak in rates rising above 5% this year, while Waller cautions that Fed may need rates ‘higher for longer’. As for positives - its seems the S&P500 and Nasdaq are still in their technical uptrends for now. As for positive company news, Uber shares gained 5% continuing its uptrend and rally from January, with Uber reporting stronger than expected quarterly results. Uber also expects its first ever year of profits, including for its ride and Uber eats businesses. This is extraordinary - for a company that’s been unprofitable since its inception. It comes as Uber received its highest ever amount of trips, 2 billion trips in a quarter, for the first time- that’s nearly 1 million trips per hour, while its also receiving more advertising dollars, and on track to achieve its $1 billion ad revenue in 2024.
ASX200 futures suggest a 0.4% fall on Thursday. However, focus will be on energy companies again with oil markets moving up. In company news, Nine Entertainment (NEC): won the rights to the 2024-2032 Olympic Games so that will excite some. Fortescue Metals (FMG) is hoping its iron project in Gabon will one day rival the giant mines of Australia’s Pilbara, with the West African nation giving the go-ahead for digging to start this year. Also keep an eye on travel businesses and educational firms in the quarter ahead with at least 50,000 students from China expected to return to Australia before the start of semester - with Beijing’s government ruling that degrees earned online will no longer be accredited.
Oil broke 1.7% higher to $78.48 with restricted supply and rising demand continue to play a part. On the demand side, TotalEnergies sees oil demand will rise to a record this year, in line with the EIA’s messaging. As for supply, consider we are just five day in to the EU banning imports of Russian oil products. Also impacting supply, BP declared force majeure (.i.e. it’s not able to fulfil contractual obligations) on Azeri oil exports, from Turkey's Mediterranean port of Ceyhan, with seaborne flows from the BTC pipeline still being halted. For Saxo’s view, read out Quarterly Outlook.
To listen to our take on markets tune into our global Podcast.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.