Market in Review 2/21/2024

MARKET REPORT

Review:
– NVIDIA POST RECORD REVENUE +265% ON BOOMING AI BUS POST CLOSE
– FOMC Minutes:
– altered the post-meeting statement to indicate that no cuts would be coming until the rate-setting Federal Open Market Committee held “greater confidence” that inflation was receding.
– indicated a general sense of optimism that the Fed’s policy moves had succeeded in lowering the rate of inflation
– officials noted that they wanted to see more before starting to ease policy while saying that the policy rate is likely at the peak of its cycle
– two policy makers noticed dangers of extended peak, others expressed concerns of premature easing
– Future policy depend on; data, evolving outlook and balance of risks
– Funds were unchanged 5.25/5.5 in Jan, per expectations
– Fed Funds indicate no cut Mar & May 53% likelihood cut in June
– 10yr Treasury yield rose to 4.3% on back of Minutes.
– Gold pares losses=down small, Dollar UNCH, Equities down lead by ND, Crude +1%
– NVDA -3% (Earnings)
– Woeful 20yr bond auction
– Boeing outs head 737 Jetliner program
– Indian farmers clash with police in mass protest
– German govt slashes growth forecast.

DOLLAR DX: UNCH:
– AUD UNCH: 65.47                        UNCH (65.71 – 65.36) close off lows
– EUR UNCH: 92.43                         UNCH (92.64 – 92.40) close lows
– GBP UNCH: 126.31                       UNCH (126.04 – 126.38) close off highs
– JPY up small: 150.21                    +0.2% (159.89 – 150.38) close off highs

GOLD down small:                          $2034 -0.2% ($2042 – $2031) close off lows
DOW/ES/ND:                                    38676 +0.1%, 4995 UNCH, 17525 -0.4%
CRYPTO: BTC/ETH:                          -900/-1.75% 51090, -67/-2.25% 2912
CRUDE Up:                                        $78.01 +1.25% ($76.41 – $78.01) close absolute highs

Upcoming:

AUD Judo Bank PMI (unfamiliar?)
JAP PMI
UK PMI
DE/EA PMI
EA Inflation (final)
EA Monetary Policy Meeting Accounts
US Weekly Jobless, Existing Home Sales, Chicago Fed Activity, Crude Stocks

Next week: FOMC, ECB and RBA, Flash PMIs and PBoC

Speakers:
EA: Tuominen
US; Cook, Harker, Kashkari, Waller, Jefferson
AU: RBA’s Bullock

Earnings: Lloyds, Anglo American, WPP, Hays, Hikma, Rolls Royce, Axa, Engie, Heidelberg Materials, Mercedes Benz, Hochtief, Nestle, Zurich Insurance, BE Semiconductor, Telefonica, Iberdrola, Repsol, Pioneer Natural Resources, Moderna, Intuit, Booking

MAJORS:

DX:  
The Dollar was flat on Wednesday with the FOMC minutes doing little to alter the narrative given it was largely a repeat of recent Fed comms. The minutes highlighted that most policymakers noted the risks of easing too quickly and that they stressed the importance of being data-dependent, they also judged the policy rate is likely at its peak for this cycle. On the balance sheet, it stated it would be appropriate to start in depth balance sheet discussions at the next meeting. DXY managed to keep hold of 104 throughout most of the session although two-way price action over the FOMC minutes saw DXY hit a low of 103.94

No call

1 –

AUD:
AUD saw mild weakening, the Q4 wage price index was hotter than expected, rising to 4.2% despite expectations for an unchanged print at 4.1% (prior was revised up from 4.0%).

No call

6-

GBP:
Muted 30 pip range with nothing major to report. 126.05 – 126.35, closing off highs.
UK PMI overnight.

No call

12-

EUR
Similar story with muted 25 pip range in a grind off to close on lows 92.42. Slew of Euro PMI’s for future direction overnight.

9-

YEN:
mild weakness vs the buck on account of upside in UST yields which saw the pair rise above 150.00 again. Jap PMI out for direction.

No call

1

GOLD & SILVER:

$10 range saw GC drift off to close near lows. Rge: 2032 – 2042 closing 2035, -0.25%. Silver outperformed to the downside closing down 1% as it settles around the crucial $23 mark.

No call

EQUITIES:
US INDEXES:
– SPX +0.13% 4,982
– NDX -0.38% 17,479
– DJI +0.13% 38,612
– RUT -0.47% 1,995

EUR INDEXES:
– DAX: +0.29% 17,118.12
– FTSE: -0.73% 7,662.51
– CAC: +0.22% 7,812.09
– ES50: +0.27% 4,773.05

SECTORS (W to S): Energy +1.86%, Utilities +1.36%, Real Estate +0.72%, Consumer Discretionary +0.72%, Materials +0.57%, Industrials +0.42%, Financials +0.31%, Consumer Staples +0.29%, Health +0.26%, Communication Services +0.19%, Technology -0.76%.

STOCKS:
NVIDIA reported earnings after the bell that beat Wall Street expectations for earnings and sales, and said that revenue during the current quarter would be better than expected
NVIDIA has been the primary beneficiary of the recent technology industry obsession with large artificial intelligence models, which are developed on the company’s pricey graphics processors for servers.
Intel -2.5%: Launches world’s first systems foundry designed for the AI era; Microsoft (MSFT) will use Intel to manufacture home-grown processor and MSFT will produce chip using Intel’s 18a technology.
Amazon +1% Walgreens Boots Alliance -2.5%: AMZN will replace WBA in the Dow Jones Industrial Average.

OIL
:
WTI (J4) SETTLES USD 0.87 HIGHER AT 77.91/BBL; BRENT (J4) SETTLES USD 0.69 HIGHER AT 83.03/BBL

Oil prices were ultimately firmer on Wednesday after losses in Europe were reversed gradually through the rest of the session. WTI and Brent April contracts hit lows of USD 76.32/bbl and 81.66/bbl, respectively, in the London morning in lack of an obvious catalyst outside of “global demand woes”, that was before recovering gradually through the rest of the session to settle at highs, also in lack of an obvious catalyst outside of “geopolitical angst”. There was a brief dip later in the US session, which was swiftly bought, on the back of the Israeli war cabinet member Gantz saying there are initial signs indicating a possible new hostage deal. Elsewhere, and not market moving, Guyana’s natural resources minister said in a newswire interview that Guyana will not approve drilling near Venezuela until it hears the international court decision. Meanwhile, nat gas futures surged further off multi-year lows, extending the late Tuesday bounce, after Chesapeake (CHK) cut its production guidance for the year. Oil report courtesy of newsquark


BOND YIELDS:

US 1-MO 5.394 +0.004 US 6-MO 5.354 +0.016 US 1-YR 4.994 +0.036 US 5-YR 4.306 +0.055 US 10-YR 4.321 +0.046 US 30-YR 4.482 +0.033
2YR/10YR -0.34

CRYPTO:
A weaker session for Crypto with BTC coming from 52 even to test the 51k figure overnight with trading around the 51 handle for the day session 250 above and below, closing 51300. ETH broke the 3000 mark overnight to hit 2875 by the US open  but closing at 2925 in a muted vol session

No Call.

Best of luck out there. Let the market come to you

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