Global Economic Daily - 03/04/2024
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Quote of the Day: Success is never final, failure is never fatal. It’s courage that counts – John Wooden
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Equities: Stocks fell today. The?Dow Jones Industrial Average?fell for a second day, continuing Wall Street’s lackluster start to the quarter, as bond yields rose and traders lowered expectations that the Federal Reserve would cut interest rates in June. The 30-stock Dow dropped 396.61 points and settled at 39,170.24. At its session low, the benchmark was down more than 500 points. The?S&P 500?slid 37.96 points to settle at 5,205.81. The?Nasdaq 100?shed 171.41 points to finish at 18,121.78. It was the worst day since March 5 for the Dow and the S&P 500. The second quarter for stocks is off to a rough start as sticky inflation data to end last week and some strong economic data on Monday send yields higher and reduce odds the Fed will cut rates in June. Stocks came under pressure Tuesday as the 10-year Treasury yield jumped to its highest level since Nov. 28. Oil prices also surged to highs last seen five months ago. The S&P 500 is coming off a 10% gain for the first quarter, its best start to a year since 2019, as investors bet inflation would come down enough for the Fed to start cutting rates while the economy keeps growing. Tuesday’s market losses come after February’s core personal consumption expenditures price index released Friday showed a 2.8% annual increase, still a ways to go from the Fed’s 2% inflation target. On Monday, the Institute for Supply Management’s manufacturing gauge showed expansion for the first time since September 2022. Regional Fed Presidents Mary Daly of San Francisco and Loretta Mester of Cleveland both said Tuesday they anticipate rate cuts this year but?do not expect to start easing?anytime soon. Odds for a June rate cut based on fed futures trading are now down to roughly 63%, off from about 70% a week ago. TECHNICAL OUTLOOK - The Dow and S&P are above the 14, 21 day moving average.
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Crude Oil: Oil prices settled higher on Tuesday after a session in which Ukrainian attacks on Russian energy facilities and escalating conflict in the Middle East pushed the Brent benchmark above $89 a barrel for the first time since October. A Ukrainian drone struck one of Russia's biggest refineries in an attack Russia initially said it?repelled. Russia's Astrakhan gas processing plant, controlled by energy giant Gazprom, also?halted?production of petroleum products after a repair-related stoppage on March 30, the company said. Russia, among the top three global oil producers and one of the largest exporters of oil products, has been contending with Ukrainian attacks on?oil refineries?and has also attacked Ukrainian energy infrastructure. In the Middle East, Iran has vowed to?take revenge?on Israel for an airstrike that killed two top generals and five military advisers at the Iranian embassy compound in Damascus. Israel has been at war against Iran-backed Palestinian group Hamas in Gaza, but direct Iranian involvement could spark a region-wide conflict with plausible impact on oil supply. U.S. crude oil inventories fell by 2.3 million barrels last week, according to market sources citing American Petroleum Institute figures on Tuesday. TECHNICAL OUTLOOK – The Crude is above the 14, 21 day moving average.
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Metals: Gold prices are solidly up, with June Comex futures hitting another contract/record high of $2,287.50 an ounce, in early U.S. trading Monday. Silver prices are also posting sharp gains. Safe-haven demand is featured today as geopolitical tensions in the Middle East have ratcheted up. Technically, the gold futures bulls have the strong overall near-term technical advantage. A six-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,300.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,200.00. The silver bulls have the firm overall near-term technical advantage. Bulls are working to revive a six-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at the March high of $25.975. The next downside price objective for the bears is closing prices below solid support at $24.00. TECHNICAL OUTLOOK – Gold and silver are above the 14, 21 day moving average.
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DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
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