Tuesday's Markets Update (February 6, 2024)

06 Feb 2024 by rate3

On Tuesday, NY Fed data showed consumer debt hit a record and stocks were mixed, with the S&P 500 flat, Nasdaq down and Dow Jones up. Investors adjusted expectations following Powell's remarks. Earnings season continued, with Palantir surging 30% on profits outlook. Internationally, Euro Area retail sales decreased -1.1% as Argentina's industrial production slump to 2-years low. Crypto market is mostly on a rise with BTC showing a small gain while ETH added 3%, Polygon increased by +2% and Uniswap jumped +4.5%. Monero crashed -35% after Binance announced that it delists XMR. Also Nigerian Naira corrected sharply (-10%) to both BTC and ETH after devaluing almost 40% relative to those currencies during a month on a general weakness of Naira (NGN/USD is up 30% YoY).

Details

Consumer debt hit a record high of $17.50 trillion in Q4 2023, increasing by $212 billion (1.2%) from the previous quarter. Mortgage balances rose to $12.25 trillion, while credit card debt surged by 4.6% to $1.13 trillion. Auto loan balances increased to $1.61 trillion, and other balances (including retail cards) grew by $25 billion. Student loan balances were effectively flat at $1.6 trillion. Non-housing balances grew by $89 billion. Delinquency rates and the transition into troubled status both increased amid the debt surge.(NY Fed)

Crypto

Solana, after almost a year of uptime, suffered a major outage halting transactions. This prompted criticism on its scalability. Developers released a patch and requested validator operators to update, but the network restart was still ongoing.(source)

World Markets

In December 2023, Euro Area retail sales decreased by 1.1% MoM, surpassing market expectations of a 1% fall. High inflation and borrowing costs negatively impacted demand, causing sales of food, drinks, and tobacco, as well as non-food products, to decline. Online trade also experienced its largest decrease since July 2021. Yearly, retail sales contracted for the 15th consecutive month with a 0.8% decline.EuroStat
Argentina's industrial production fell 12.8% YoY in December 2023, the biggest decline since May 2020, with seven straight months of decline. Key sectors like basic metals, machinery, and food & beverages saw significant drops. Monthly, it decreased 5.4%, extending November's 0.6% fall.(Indec)
In January 2024, total sales of new cars and light commercial vehicles in Russia reached 65,200 units (83,000 including alternative supply channels). Sales growth compared to January 2023 was 64%. Market dynamics were influenced by factors such as market saturation in the crossover segment and the impact of a significant increase in the key rate, disposal fee, and other factors, including seasonal ones, leading to customers postponing new car purchases.(AEB)
The Central Bank of Kenya raised its benchmark rate to 13% to anchor inflation expectations and address exchange rate pressures. Inflation climbed to 6.9% in January 2024, nearing the upper end of the target range, while the economy is expected to remain strong in 2024.(CBK)

Commodities

Gold remained near $2,020 an ounce as economic data and the Fed's hawkish stance reduced expectations of interest rate cuts. Stronger-than-expected US services sector growth and job additions, along with Jerome Powell's reaffirmation of no March rate cut, have lowered odds for rate cuts this year, impacting gold's price.