Market Observations - Mar 11
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Crypto Market Rundown:
With BTC and ETH making another leg up over the weekend, the crypto bulls are back in control! At the time of writing, BTC is trading above $72k (for the first time ever), and ETH is trading above $4k for the first time since Dec 2021. The total global crypto market cap is $2.7T, a 3.80% increase day/day. 24h volumes are back over $150B, a 48.06% increase from yesterday. BTC.D (Bitcoin Dominance) is currently 52.33%, +0.23% in the past 24 hours.
Top 5 Gainers on Uphold Ascent in the past 24H
Top 5 Losers on Uphold Ascent in the past 24H
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U.S. Friday Market Wrap: NVDA takes a Tumble!
Major US stock market indices closed lower on Friday. The S&P lost 0.6% to close at 5,123, the tech-heavy Nasdaq lost 1.1%, and both indices made new intra-day highs before swinging into negative territory. The Dow lost 69 points or 0.18%. The Dow and Nasdaq lost around 0.8% on the week, and the S&P around flat. Only four of the eleven S&P sectors closed green. Real estate +1.18% led, and technology -1.49% lagged. Energy experienced some volatility after Exxon filed for arbitration to protect what it says is its right to pre-empt Chevron’s bid for a stake in a prolific oil project off Guyana. The dispute could cause major problems for Chevron’s $53 billion acquisition of Hess.
NVDA’s evil plan to take over the stock markets finally ran out of steam, losing over 5.5% on the day.
Reddit launches free tools to help businesses grow their online presence.?The social media giant is launching Reddit Pro, a suite of tools designed to help businesses grow an organic presence on the platform. It comes as the company tries to beef up its revenue and profitability ahead of its March 20th initial public offering (IPO), where it’s seeking a roughly $6.5 billion valuation.
Walmart opens a new front in the same-day delivery war.?With Target unveiling its membership rewards program this week, Walmart is heating things up by launching an early morning on-demand delivery service. Under the new program, orders placed at 6 am will be delivered in an hour or less, charging a $10 express fee and base delivery fee for shoppers who are not Walmart+ members. Same-day delivery sales and subscription programs are big businesses, and Walmart, Amazon, Target, and others are vying for their share.
Tuesday’s CPI print is the big macro event on this week’s economic calendar. The last print tripped up stock markets and marked the worst CPI day for the S&P since September 2022.
News that the Japanese economy expanded rather than contracted in Q4 23 has fanned expectations that rates could be as early as next week. This is helping keep the yen supported, though it remains in the pre-weekend range, albeit barely. While the dollar is softer, consolidating against the euro, Swiss franc, and Canadian dollar, it is slightly firmer against the Antipodeans and Scandis.
Overnight, the yen’s recovery and rate speculation weighed on Japanese stocks. The Nikkei and Topix fell by more than 2%. It is the biggest decline since last October. Outside of China and Hong Kong, the other large regional bourses fell. Australia’s ASX 200 tumbled by 1.8%, the most in nearly a year.
Europe’s SXXP is off by 0.4%, threatening the 3-day advance in the second half of last week. U.S. index futures are nursing small losses. Japan’s 10-year yield rose 2.5 bps, and at 0.75%, is approaching the year’s high. Core European benchmark yields are mostly slightly softer, while the peripheral yields are a little firmer. U.K. 10-year Gilt yields are off a couple of basis points. The 10-year U.S. Treasury yield is little changed near 4.07%.
Gold is consolidating after approaching $2200 before the weekend. It has held above $2176 today.
April WTI fell to a nine-day low near $77.25 today before recovering. It is near session highs now, near $78.30.
China reported February CPI and PPI over the weekend. Deflation in consumer prices ended for the first time since last August as the CPI rose by 0.7% year-over-year. It was twice the gain economists expected (0.3% median forecast). While conventional wisdom attributes the gain to spending over the Lunar New Year holiday, given the construction of China’s CPI basket, food prices are key. Food prices fell 0.9% year-over-year in February after a 5.9% decline in January. Pork, a staple in diets, rose by 0.2% in February following a 17.3% drop in January. Excluding food and energy, China’s core CPI stood at 1.2% in February, up from 0.4% in January. On the other hand, deflation in producer prices deepened to -2.7% from -2.5% previously. Producer prices fell by 0.2% on the month, matching the January decline.
With February employment data in hand, the attention turns to tomorrow’s CPI. The headline is expected to be unchanged at 3.1%, though the core may drop to 3.7% from 3.9%. Fed Chair Powell told Congress last week that the central bank’s confidence was “not far” from allowing it to cut rates. The market understands this to mean a cut in June rather than March or May. The February jobs data did not change economic assessments. The odds of a June hike changed slightly, at about 92%, down from 96% the previous day and at the end of the previous week (March 1). Powell previously explained that while the PCE deflator is the best measure for price stability, the full employment mandate does not lend itself to a signal number. Note that when the downward revisions are considered, the U.S. created an average of 265k jobs a month over the past three months, the most since last June. The private sector has created an average of 205k jobs monthly in the three months through February. That is also the highest for three months since June 2023. Still, the pop in the unemployment rate to 3.9%, the highest since January 2022, is a yellow flag, underscoring the gradual slowing of the labor market. The median Fed forecast in December saw the unemployment rate rising to 4.1% this year. ?
What investors are watching for direction:
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