Global Market Quick Take: Asia – March 5, 2024 Global Market Quick Take: Asia – March 5, 2024 Global Market Quick Take: Asia – March 5, 2024

Global Market Quick Take: Asia – March 5, 2024

Macro 6 minutes to read
APAC Strategy Team

Summary:  Cracks are starting to emerge in Magnificent 7 stocks, with Tesla, Apple and Alphabet leading the declines year-to-date. Chip stocks however continue to see momentum driving TSMC to a record high, and Japan’s Nikkei 225 breaching the 40k level. Rallies in Gold and Bitcoin have also reached at or near record highs. China announced growth target of around 5% as expected. In FX, dollar is treading water but GBP outperforming ahead of budget while JPY and CHF remain weak.


The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events. 

US Equities: Major US indices pulled back, with the S&P 500 down 0.1% and the Nasdaq 100 trimming 0.4%, dragged down by the Magnificent Seven stocks. Nvidia, on the other hand, advanced 3.6% along with other semiconductor names. Taiwanese chipmaker, TSMC surged to record high, with its ADR reaching $141.99 before closing at $138.26.

Tesla emerged as the worst-performing stock in the S&P 500 on Monday, plummeting 7.2%, bringing the EV maker’s year-to-date loss to 24.3%. Alphabet and Apple also experienced declines of 2.8% and 2.5%, respectively, widening their year-to-date losses to 4.8% and 9.1%.

Hong Kong/China Equities: Markets trod water as investors awaited news from Premier Li Qiang's Government Work Report scheduled to be delivered at the National People’s Congress (NPC) today. The Hang Seng Index finished Monday nearly unchanged, while the Hang Seng Tech Index slid by 0.4%. Wuxi Apptec, Wuxi Biologics, Techtronic Industries, Lenovo, and Hansoh Pharmaceutical, which rose between 6.9% and 12.5%, were the top performers in the Hong Kong benchmark. Meanwhile, Li Auto plunged 10.7%, trimming a strong post-results run-up, after the plug-in hybrid EV maker launched its first full battery model and experienced slower delivery in February. Nio and XPeng dropped more than 4%. Competition in China’s EV market is intensifying, and at the same time, the prospect of expanding exports is shadowed by the rising scrutiny of the EU and the US. NIO reports results today. In the mainland, CSI300 ticked up 0.1%, aided by coal miners and oil stocks.

Fixed income: Treasuries pared last Friday’s gains, with the 2-year yield rebounding by 7bps to 4.60% while the 10-year yield added 3bps to reach 4.71%.

FX: The dollar treaded water again to start the week, amid lack of clear data or commentary that could change the market narrative for now. Under the surface, however, there were significant cross-currents. SEK under-performed, with ERUSEK rising above 50DMA to touch 11.26. Meanwhile, sterling remained resilient, clocking in 0.3% gains against the greenback ahead of Hunt’s budget announcement on Wednesday. GBPUSD touched the 1.27 handle, which has been a major resistance in February, but a break above could bring 1.28 in focus. EURUSD also rose above 1.0860 ahead of Thursday’s ECB meeting, while EURCHF rallied to 0.9620 amid the continued disinflation trend in Swiss CPI. USDJPY slipping slightly this morning in Asia to 150.40 amid a hot Tokyo CPI, while China’s 2024 GDP target at around 5% came as no surprise, and AUDUSD seeing only a minor bump higher above 0.6510 levels.

Commodities: Gold rallied to over $2,100, getting to a new record high despite a run higher in yields, suggesting the safe-haven asset’s strong physical demand and low short-selling appetite at a time of heightened geopolitical tensions along with market’s continued optimism around the rate cut trajectory. Crude oil prices eased from the highs seen following the announcement of OPEC+ production cuts, and China’s policy direction along with US jobs data and Powell’s testimony will be key this week. Iron ore rallied 2% and focus remains on China’s two sessions.

Macro:

  • Fed’s Bostic was hawkish on the margin. He said he would not anticipate that cuts, when they start, would be “back-to-back”. The Atlanta Fed President noted a third quarter cut will likely be followed by a pause but he still expects two 25bps rate cuts this year (current market pricing has 84bps of cuts in 2024, vs the 75bp suggested in the Fed December Dot Plots).
  • Switzerland February CPI came in a notch higher than expected, albeit still cooling from January. Headline inflation was at 1.2% YoY vs. 1.1% expected and 1.3% prior. Core CPI slowed to 1.1% YoY from 1.2%, and the odds of a March rate cut reduced to less than 50%. Still, about 35bps of easing is priced in by June.
  • Japan’s Tokyo CPI was also a hot read. Although softer base effect underpinned, headline CPI rose to 2.6% YoY from an upward revised 1.8% YoY in January, coming in above 2.5% expected. Core measures were in-line with expectations, coming in at 2.5% YoY for core and 3.1% for core-core, which is a further reason to expect that both March but more so the April BOJ meeting is live. Governor Ueda will be on the wires today at noon Singapore time.
  • China’s National People’s Congress (NPC) started today and will conclude on March 11. The announcement of not holding a premier press conference, against the norm in the past three decades, stirred up some speculation among investors and dampened the already low expectations of aggregate demand-boosting measures from the NPC. In his Government Work Report this morning, Premier Li Qiang is expected to set targets of around 5% for GDP growth, 3% for on-budget fiscal deficit, 3% for CPI, and a 5.5% unemployment rate. For more details, read our preview and stay tuned for updates from us.

Macro events: US Primary Super Tuesday, Chinese Caixin Services PMI Final (Feb), EZ/UK/US Services and Composite PMI Final (Feb), EZ PPI (Jan), US ISM Services PMI (Feb), China NPC. Speakers: BoJ’s Ueda; Fed's Barr

Earnings: NIO, Crowdstrike, Target, Ross Stores, Ferguson.

In the news:

  • Tesla shares skid after China sales fell to the lowest level in over a year (Reuters)
  • Apple hit with $2 billion EU antitrust fine in Spotify case (Reuters)
  • China Sets Ambitious GDP Growth Target of Around 5% at NPC 2024 (Bloomberg)
  • Bitcoin bursts above $68,000, record high comes into view (Reuters)
  • Japan’s Nikkei 225 Breaches Key 40,000 Level for First Time (Bloomberg)

 

For all macro, earnings, and dividend events check Saxo’s calendar.

For a global look at markets – go to Inspiration

Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.