Friday's Markets Update (March 22, 2024)

22 Mar 2024 by rate3

On Friday, stocks cool off after record highs. Dow retreats, but weekly gains expected. Consumer discretionary stocks lag, while utilities and communication services rise. On worlds markets, Euro, Chinese Yuan and Indian Rupee weaken on rate cuts expectations, EU gas prices increased due to supplies concerns, cocoa market is in panic with prices quadrupling in past two months. The crypto market entered into a correction mode forming a sideway channel with major coins sliding down for more than 4%. BTC got under 64K and ETH dropped below 3.4K.

Crypto

BlackRock clients have much more interest in BTC than ETH. (source)
Minnesota UBI bill that would give up $300 to $1.2K every month for two years to low-income residents has already advanced through a House committee. The program would be funded with $200 million over two years. (source)

World Markets

El Salvador's economy rebounds. Q4 growth hits 4.5%, the highest in 2 years. Trade and investment surge, but consumer spending slows. This marks a significant improvement from the previous quarter's decline. (BCR)
Vietnamese stocks climb to 18-month highs, boosted by Wall Street's record and hopes of US rate cuts this year. Local gains led by finance and construction sectors after Hanoi appoints new acting head of state.

Currencies

Dollar strengthens for a second week, hitting 3-week highs (104.2). Bets on earlier rate cuts by other central banks lift the dollar. Swiss National Bank cut rates, Bank of England paused, and Bank of Japan shifted policy, but remains dovish. The Fed held steady on rates and its plan for 3 cuts, but awaits signs of inflation easing.
China's offshore yuan weakens to a 4-month low (7.25 per dollar) on expectations of more easing. The central bank hints at looser policies, and a strong dollar adds pressure. Investors await data to assess China's economic health.
Euro falls to near $1.08, its lowest level in over 5 months, on hopes of ECB rate cuts. A hawkish ECB official signaled potential cuts before summer, aligning with market expectations of multiple reductions this year. The ECB remains data-driven, though, and future moves depend on inflation.
Indian rupee weakens to record low (83.5) after China's currency move sparked Asian selloff. Despite the drop, strong economic growth (8.4% GDP) and high PMI (over 60) kept the rupee somewhat stable.

Commodities

European natural gas prices stay high near €29/MWh due to supply worries. Concerns include outages in Norway, repairs at a US terminal, and competition for gas from Asia. However, analysts expect prices to fall as winter ends, with more solar power and stable gas storage levels in Europe.
Cocoa prices keep surging, hitting a record high above $8,600 per pound (was ~2K at the start of the year). Fears of a global cocoa shortage intensify as reports emerge of processing slowdowns in West Africa and lower-than-expected harvests in Ivory Coast. Analysts predict a wider global cocoa deficit due to these supply concerns.