Market Observations - Feb 26
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Crypto Market Rundown:?
The global crypto market cap is officially above $2T (!!), an increase of 1.05% over the last day. The total market volume in the previous 24 hours is $52.8B, a 6.72% increase day/day. BTC.D (Bitcoin dominance) is currently 50.80%, a decrease of 0.39% over the day.?
Top 5 Gainers on Uphold Ascent in the past 24H
Top 5 Losers on Uphold Ascent in the past 24H
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Scores so far:?Crypto 18.6%, Oil 9.7%, Stocks 4.8%, Commodities 3.7%, US$ 2.6%, Cash 0.7%, H.Y. bonds 0.3%, I.G. bonds -1.9%, Gold -2.5%, Gov’t bonds -3.8% YTD.
Tale of the Tape:?just a few weeks away from the 4th anniversary of the COVID lockdown, 10-year yields of 0.3%, SPX of 2200, the unemployment rate of 15%…and look at us now!
U.S. Friday Market Wrap:
Major US stock indices turned in a mixed performance one day after all three hit record highs. The Dow rose 62 points or 0.16%, the S&P managed to squeak out a 0.03% gain and the Nasdaq lost 0.28%.
All three indices posted a winning week. The S&P advanced 1.66%, the Nasdaq was higher by 1.4%, and the Dow gained 1.3%.
Seven of the eleven S&P sectors closed green. Utilities +3.27% led, and energy -0.66% lagged.
Electric vehicle stocks continue to experience negative news, with Chinese E.V. maker Nio falling back towards all-time lows after being downgraded by JPMorgan.
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United follows other major carriers in raising checked bag fees.?The company joins American, JetBlue, and Alaska, who have all raised fees this year, charging $5 more per checked bag beginning on February 24th. It last raised prices in 2020, with the company continuing to look for ways to grow profits amid waning domestic ticket prices while controlling costs.
?Capital One won’t pay a breakup fee if regulators block the Discover deal.?With the financial giant revealing it will not pay a termination fee, analysts say it signals management lacks confidence in the deal being approved. However, an alternative take is that Discover was the much more eager party, going as far as to offer a $1.38 billion reverse termination fee were it to find another buyer.
The Supreme Court is about to decide the future of online speech.?Social media companies have long made their own rules about the content they allow on their sites, but a pair of cases set to be argued before the Supreme Court next week will test those limits. Ultimately, the case will examine whether the platforms can be legally required to host users’ speech. It’s not just big social media platforms concerned about the law’s effects, with Wikipedia and individual credit moderators worried they might have to fundamentally change how they operate.
Used electric vehicle market could tempt EV-curious consumers.?For the first time in years, consumers will have a vast pool of used vehicles available for purchase, with over twenty-thousand Teslas flooding the market from rental-car giant Hertz’s inventory. The company’s website shows hundreds of Teslas already listed for sale at a well below market rate, which will be a big test for U.S. consumer E.V. appetite.
Stock futures are marginally lower in early trade heading into a data-heavy week.
The dollar is beginning the new week mixed. The dollar-bloc currencies and Japanese yen are softer while the European currencies are firmer today. Among emerging market currencies, central European currencies are trading with higher. The Turkish lira is the notable exception. It is the weakest currency today, off about 0.65%. The Chinese yuan is a little softer, but the dollar continues to be capped near CNY7.20. Last week, more often than not, the North American session saw the dollar trade higher, and we suspect that pattern may continue today. The euro sets session highs as North American traders prepare to enter the fray and the intraday momentum indicators are extended.
U.S. index futures are narrowly mixed. Recall that before the weekend, the Dow and S&P 500 eked out minor gains while the NASDAQ slipped on profit-taking.
Benchmark 10-year rates fell in the Asia Pacific region after the seven basis point slide in the 10-year Treasury yield before the weekend. European yields are mostly 1-2 bps firmer today, while the U.S. yield has changed little, near 4.24%. Efforts to avoid a partial U.S. government shutdown at the end of the week have not resolved the issue and will continue tomorrow. Gold posted an outside up day ahead of the weekend, but there has been no follow-through buying today, and the yellow metal is in a narrow range (~$2030-$2037).
April WTI settled at the lowest level in a week last Friday, near $76.50. It was sold for around $75.85 today.
The Eurozone’s preliminary estimate of February CPI is due at the end of the week. We expect it to begin a sharp three-month decline that will push the year-over-year rate below 2% by the end of April. From February through May 2023, the Eurozone aggregate CPI rose by more than 0.7% a month on average. If we make a conservative estimate that it will rise by an average of 0.3% a month, we can project the headline rate will fall below 2%. Moreover, a similar process will likely unfold in the U.K. as well. As this unfolds, rate expectations will be adjusted. However, the currency implications may not be as straightforward as it may seem. Recall that the euro strengthened in Q4 23 as European interest rates fell. The driver was not Europe so much as it was the U.S.
New home sales and the Dallas Fed survey are out today. They typically are not market movers. On Tuesday, the U.S. reports durable goods orders; a weak report should be expected. Boeing’s orders collapsed from 371 in December to 3 in January. It is the least since October 2020. Deliveries fell to 27 from 67. This will drag down durable goods orders. Aircraft and military orders helped drive durable goods orders. Without them, durable goods orders rose by an average of 0.1% last year, while overall durable goods orders rose by an average of 0.4%. It is a volatile series, and the median forecast in Bloomberg’s survey is for a 4.5% decline. House prices and the Conference Board’s consumer survey are also due. Richmond Fed surveys and the Dallas Fed’s services survey are also out tomorrow.
NOT FINANCIAL ADVICE
Please note that Uphold and its affiliates do not provide investment, tax, or legal advice. This message is for informational purposes only and takes no account of particular personal or market circumstances, and should not be relied upon as investment, tax, or legal advice. For investment, tax, or legal advice and before taking any action you should consult your own advisors. Note that digital assets such as cryptocurrencies present unique risks for investors. Please see our disclaimer regarding risks specific to holding digital assets before investing Crypto assets are unregulated, highly volatile, and subject to significant risks, which may not be suitable for you. Not available in all jurisdictions. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong.