Forex News from InstaForex

[IFX Bella]

Forex Analysis & Reviews: The Federal Reserve navigates interest rates: stocks are up, the dollar is on the decline





Global market indices rose, and the dollar halted its upward trajectory following the Federal Reserve's announcement of plans for three significant rate cuts this year, despite expectations of a slower decrease in inflation.

Jerome Powell, the Federal Reserve Chair, noted that despite recent high inflation figures, the main trend of easing price pressure remains unchanged. However, he emphasized that fresh economic data did not add confidence in conquering inflation. Shareholders positively received the Federal Reserve's decision to stay the course on planned interest rate cuts.

The global MSCI stock index reached a historic high, rising by 0.61%, thanks to the steady growth of stocks on Wall Street following the Fed's announcement. The Dow Jones Industrial Average increased by 1.03%, the broad-market S&P 500 index rose by 0.89%, and the Nasdaq Composite Index showed a growth of 1.25%. Irene Tunkel, a leading strategist for U.S. stocks at BCA Research based in Florida, noted,

"The market feels relieved, seeing that the Fed still plans three rate cuts this year." Expectations for rate cuts led to a decrease in the yield of government bonds. The yield on two-year Treasury notes decreased by 7.9 basis points to 4.6129%, while the yield on ten-year bonds fell by 1.5 basis points, reaching 4.281%. "It is particularly noteworthy that the Federal Reserve has significantly revised its GDP forecasts upwards not only for 2024, which was expected in light of the latest data, but also for 2025 and 2026," comments Ellen Heizen, the chief market strategist at F.L. Putnam Investment Management, located in Massachusetts.

Following the Federal Reserve's meeting, the dollar lost ground. The dollar index decreased by 0.433%, which contributed to a partial recovery of the Japanese yen. Its rate fell by 0.30% against the dollar, reaching 151.29 per dollar compared to the four-month low of 151.82, recorded earlier that same day.

Most sectors in the S&P 500 index showed growth, with nine out of the eleven main industries demonstrating an increase in stock value. Particularly, consumer sector stocks stood out, where growth was 1.5%, taking the lead in gains. The healthcare sector proved to be the least effective, showing a decline of 0.23%. In healthcare, notable decreases were observed in the U.S.-registered shares of BioNTech, which fell by 4.4% after announcing a decrease in revenue and profit for 2023 due to a focus on the development of cancer drugs.

Additionally, shares of COVID-19 vaccine manufacturers experienced a downturn: Moderna lost 1.9% in value, while Novavax dropped by 2.2%. A rise in the consumer goods sector was led by shares of Amazon.com, which increased by 1.3%. Furthermore, Tesla shares grew by 2.5% following news of a price increase for Model Y cars produced in China by 5,000 yuan ($694.55) starting April 1.

In addition to successes in the consumer sector, shares of Chipotle Mexican Grill rose by 3.5% after the board of directors announced a decision to conduct a 50-for-1 stock split. Shares of Equinix lost 2.3% in value following a report by research firm Hindenburg Research that it had taken a short position on this data center operator's stock.

The Japanese yen faced challenges following the Bank of Japan's decision to raise interest rates for the first time in 17 years. Analysts believe this move contributes to maintaining a significant yield differential between U.S. Treasury bonds and Japanese government bonds, putting pressure on the yen. The European STOXX 600 index remained unchanged throughout the day, while shares of Kering, the owner of the luxury brand Gucci, experienced a decline following announcements of potential profit reductions.

In Tokyo, the Nikkei index remained closed due to a national holiday in Japan on Wednesday, while the broader Asia-Pacific MSCI index outside Japan showed no changes. In Seoul, the market rose by 1.3%, contributing to an overall growth of 5.6% in the Asia-Pacific region. Samsung's shares saw a significant increase following Nvidia's announcement about the start of using high-bandwidth memory (HBM) chips manufactured by the South Korean chipmaker.

Chinese stock markets slightly rose after the national central bank kept the key lending rates unchanged, aligning with analysts' expectations. The Shanghai Composite Index increased by 0.5%, while the Hong Kong Hang Seng Index went up by 0.2%. Key figures of the European Central Bank (ECB) expressed support for June as the optimal moment for initiating interest rate cuts, with some advocating for four reductions within the current year.

Christine Lagarde, President of the ECB, emphasized the importance of flexibility in decision-making at an event in Frankfurt on Wednesday: "Our actions must be based on current data and considered at each meeting. This means we cannot make any predetermined commitments regarding the specific direction of interest rates following their initial reduction."

By the close of the trading day, the euro had notably strengthened against the dollar, rising by 0.51% to reach $1.092. Meanwhile, oil prices adjusted after reaching multi-month highs, influenced by the strengthening of the dollar. The price of Brent crude oil fell by 1.95%, settling at $81.68 per barrel, while gold was valued at $2185.69 per ounce, remaining below the record monthly high of $2194.99.



News are provided by InstaForex.

Read more: https://ifxpr.com/4ai13CQ

[IFX Bella]

Forex Analysis & Reviews: S&P 500: from stability to records - growth analysis



Optimistic expectations about the economic future and the Federal Reserve's accommodative policies are motivating investors to broaden their investment horizons beyond the high-growth stocks and technology giants that have been the growth drivers of the U.S. stock market in the past year.

While stocks such as Nvidia (NVDA.O) and Meta Platforms (META.O) have been key drivers of market growth in 2024, the financials (.SPSY), manufacturing (.SPLRCI) and energy (.SPNY) sectors have also outperformed the S&P 500 Index, rising 9.7% YTD. This eases concerns that the market is becoming overly dependent on the success of a limited number of stocks. Next week, investors' attention will turn to Friday's Personal Consumption Expenditures Cost Index, which promises to provide an update on inflation.


In addition, the end of the first quarter could trigger market volatility as investment fund managers adjust their portfolios. The current surge in market activity contrasts with last year, when uncertainty about the economic outlook led investors to seek protection in the stocks of the so-called "Magnificent Seven" - companies with the largest market capitalizations that were attracted by their leading market positions and strong financial reports.

Last year, the sectors dominated by large-cap companies - technology (.SPLRCT), communication services (.SPLRCL) and consumer staples (.SPLRCD) - outperformed the S&P 500 Index, rising 24%. This year, the financial and industrial sectors have posted gains of 10.1% and 9.9%, respectively, while the energy sector has gained 10.3%. In a broader context, a group of seven major companies - Apple (AAPL.O), Nvidia (NVDA.O), Alphabet (GOOGL.O), Tesla (TSLA.O), Microsoft (MSFT.O), Meta Platforms (META.O) and Amazon.com (AMZN.O) - have underpinned 40% of the S&P 500 Index's gains so far this year, according to analysis from S&P Dow Jones Indices.

By comparison, their contribution was more than 60% in the prior year. The explosive interest in artificial intelligence has led to an impressive 90% increase in Nvidia's share price this year, while Microsoft registered a 14.5% gain. At the same time, Apple and Tesla's share prices have shown a decline of 11% and 32% respectively over the same period. Apple faced an additional hurdle this week when the U.S. Justice Department accused the company of monopolizing the smartphone market, raising questions about regulatory risks that could make investors uneasy about investing in large tech firms.

Evidence of the broadening market interest is the increase in the number of S&P 500 stocks that have outperformed the benchmark index, from 150 last year to 180 this year, as of last Thursday. The S&P 500 Index was little changed on Friday, but recorded its biggest weekly gain for 2024. That followed the Federal Reserve's announcements this week of a projected three interest rate cuts by the end of the year.

The Nasdaq rose slightly, similar to the Semiconductor Index (.SOX), which also posted significant gains for the week thanks to sustained enthusiasm for artificial intelligence. The Dow Jones index, on the other hand, closed lower. On the same day, stocks from the consumer staples sector experienced declines. Shares of Nike (NKE.N) lost 6.9% after the world's largest sportswear maker warned of a possible low single-digit percentage decline in revenue in the first half of fiscal 2025. Shares of Lululemon Athletica (LULU.O) fell 15.8% as the company predicted full-year revenues and profits below expectations.

Earlier this week, despite leaving rates unchanged, the Federal Reserve confirmed its intention to make three rate cuts this year. "The market interpreted this as a signal that the Federal Reserve is no longer a threat and will eventually become supportive," commented Matt Stuckey, chief investment officer at Northwestern Mutual Wealth Management Company. According to CME's FedWatch Tool, investors now rate the probability of the first rate cut in June at 71%, up from 56% earlier in the week. The Dow Jones Industrial Average (.DJI) lost 305.47 points or 0.77% to close at 39,475.90, the S&P 500 Index (.SPX) fell 7.35 points or 0.14% to 5,234.18, while the Nasdaq Composite Index (.IXIC) rose 26.98 points or 0.16% to 16,428.82. For the week, the S&P 500 added 2.3%, the largest weekly percentage gain since mid-December. The Dow index gained 2%, posting its biggest weekly gain since mid-December, and the Nasdaq climbed 2.9%, its biggest weekly percentage increase since mid-January. Among the growth leaders, FedEx (FDX.N) shares soared 7.4% a day after the company beat Wall Street's quarterly forecasts.

Meanwhile, Digital World Acquisition's (DWAC.O) share price fell 13.7% after its shareholders decided to approve a merger with a media-tech company linked to former U.S. President Donald Trump. Trading volume on U.S. exchanges reached 9.45 billion shares, well below the average of 12.34 billion over the past 20 trading sessions. Despite some growth, some segments of the market, particularly small-capitalization companies, continue to struggle. The Russell 2000 Small Company Index (.RUT) is up just 2.2% YTD.

Some investors believe this category of companies can expect support in light of the latest outlook from the Federal Reserve, which reiterated its plan to cut interest rates by 25 basis points three times this year despite an increase in projected economic growth from the central bank. "As the Federal Reserve begins to cut interest rates, we're seeing increased liquidity and easier financing," said Jack Ablin, chief investment officer at Cresset Capital. "Who benefits the most from this? Not large-capitalized companies with their fail-safe access to capital in any environment, but rather smaller and lesser-known businesses."

This process of market diversification could face hurdles if the economy enters a period of instability or overheating, casting doubt on the so-called "golden mean theory" that has supported market indexes of late. Some investors suggest that the current market rebound, which has seen the S&P 500 Index rise 27% since the end of October, may soon experience a correction.

At the same time, other analysts are confident that the current trends will continue. Peter Tooze, president of Chase Investment Counsel, shared that his firm recently invested in shares of Goldman Sachs (GS.N) and oilfield services company Tidewater (TDW.N), while reducing stakes in large-capitalized companies, including selling shares of Apple. "The market is becoming more diverse," he says. "There are more opportunities to make money this year than there have been in the past."


News are provided by InstaForex.


Read more: https://ifxpr.com/4arF2BJ

[IFX Bella]

Forex Analysis & Reviews: On the verge of inflation: how the Dow Jones and S&P reacted for the third session in a row




On Tuesday, amid expectations of important economic releases during the short holiday week, US stock markets fell, marking the third consecutive decline for the Dow Jones and Standard & Poor's 500 indexes. Investors are in a wait-and-see mood as they analyze potential changes in Federal Reserve policy. Tesla (TSLA.O) rose 2.92% on CEO Elon Musk's announcement that he would test self-driving technology for the company's vehicles, available to both new and existing customers in the United States. Over the current week, the stock price has increased by about 4%, although during the year their quotes have decreased by more than 28%. Market participants are particularly focused on the Personal Consumption Expenditures (PCE) price index, the Federal Reserve's main tool for assessing inflation. It is expected that the latest data on this indicator will be published on Friday, a day when trading on American exchanges will not be held due to the celebration of Good Friday. It is predicted that in February the inflation index will increase by 0.4%, reaching 2.5% at the annual level. Meanwhile, core inflation, which excludes volatile items such as food and energy, is expected to rise 0.3% for the month, keeping annual growth at 2.8%, according to expert forecasts. "Friday is key. All attention will be focused on this day, and any events before then will be perceived as background. Therefore, we should not expect significant changes in the market until the data is published," said Stephen Massocca, deputy president of Wedbush Securities. San Francisco. "It would be extremely risky for the market if there were any speculation that Fed rates have not yet peaked. Any hint from the Fed that interest rates could be raised further could signal an immediate shift away from risk assets." The U.S. economic sector is growing, with February orders for durable goods exceeding forecasts and equipment investment pointing to the start of a recovery. According to the Conference Board, consumer confidence remained virtually unchanged in March at 104.7. The Dow Jones Industrial Average lost 31.31 points, down 0.08%, to 39,282.33. The S&P 500 was down 14.61 points (down 0.28%) at 5,203.58, while the Nasdaq Composite was down 68.77 points (down 0.42%) at 16. 315.70. Last week, all three major US indexes hit new all-time highs after the Federal Reserve confirmed its forecasts for three interest rate cuts this year. Market expectations for the Fed to cut rates by at least 25 basis points in June continue to rise, now reaching 70.4% probability according to CME's FedWatch tool, up markedly from last week's 59.2%. Shares of the media and technology group linked to Donald Trump rose 16.1% to close at $57.99 after temporarily hitting $79.38 on the first day of trading following its reverse merger with the company. , specializing in the issue of securities. McCormick (MKC.N) jumped 10.52% to become the top gainer in the S&P 500, as its first-quarter sales and earnings beat market expectations. Shares of Seagate Technology (STX.O) also posted strong gains, rising 7.38%, after analysts at Morgan Stanley upgraded the hard drive maker's stock from overweight to overweight. At the same time, United Parcel Service (UPS.N) shares lost 8.16% following the release of the company's 2026 guidance. On the New York Stock Exchange, decliners outnumbered advancers by a 1.24-to-1 ratio. A similar trend was seen on the Nasdaq, where decliners outnumbered advancers by a 1.34-to-1 ratio. Trading volume in US stock markets reached 10.43 billion shares, less than the average volume of 12.23 billion shares over the past 20 sessions. Trading activity is expected to remain moderate throughout the current week, and as the holidays approach, volumes may decline further. The pan-European stock index STOXX 600 gained 0.24%, while MSCI's index of Asia-Pacific shares ex-Japan closed 0.25% higher at 535.59. Market attention is focused on the Japanese yen, which remains at its weakest against the dollar since 1990 despite the Bank of Japan raising interest rates last week for the first time in 17 years. The dollar strengthened 0.1% against the yen to hit 151.56, raising the risk of Japanese intervention to prevent further weakening of its currency. In October 2022, the dollar/yen exchange rate rose to 151.94, followed by a decline due to intervention.

News are provided by InstaForex.

Read more: https://ifxpr.com/3ITlWIX

[IFX Bella]

Forex Analysis & Reviews: S&P 500 breaks records: the most successful quarter in the last five years



Amid the latest economic data, the S&P 500 ended the week with positive dynamics, marking its best quarterly result in the last five years. Investors are optimistic about the future, awaiting new information on inflation. Breakout of leading indices In addition to the S&P 500, two other key US indices also posted significant gains this quarter. The 10.16% rise for the S&P 500 was driven by growing interest in artificial intelligence stocks and speculation that the Federal Reserve will cut interest rates this year. Dow Jones on the verge of historic achievement The Dow Jones index is approaching a significant milestone of 40,000 points, less than 1% away from this goal. Economic progress and labor market sustainability The latest data shows the US economy grew faster than expected in the fourth quarter, helped by strong consumer spending. Additionally, the decline in initial unemployment claims underscores the stability in the labor market. Optimism among experts "The economy and consumers are doing well as they continue to spend. Unemployment remains low and there are regions where the economy is thriving... There are funds that want to be spent in a variety of ways," shares George Young, portfolio manager at Villere & Company. Nasdaq reaches new heights The tech-heavy Nasdaq Composite Index also posted its first record peak since November 2021, opening up new opportunities for investors. Belief in a "soft landing" of the economy A key factor in this year's success has been investor confidence in the possibility of a "soft landing" for the economy, which involves lowering inflation without leading to a major recession. Looking to the future: soft landing is a priority A BofA Global Research survey conducted in March shows more than two-thirds of asset managers view a soft landing as the most likely scenario for the economy over the next 12 months, while just 11% expect a hard landing. Fed maintains optimism The March Federal Reserve meeting, which confirmed expectations of three interest rate cuts during the year while improving the economic outlook, added confidence to investors. Overcoming rising bond yields The stock has successfully weathered the rise in Treasury yields that previously weighed on stock prices heading into 2023. The yield on the 10-year Treasury note reached 4.2%, up from 3.86% at the end of last year. Expanding the Boundaries of Optimism BlackRock Investment Institute strategists say risk optimism could expand beyond the tech sector thanks to the integration of AI across industries, as well as support from the Federal Reserve and slowing inflation. This is pushing for more investment in US stocks. Rising share prices reflect confidence The forward price-to-earnings ratio for the S&P 500 reached 21, a two-year high and reflecting increased investor optimism in the stock market, according to LSEG Datastream. Wind of change in the stock market The stock market remains under the influence of large companies that dictated trends in 2023. However, the current year has brought diversity to growth dynamics, especially among the tech giants known as the "Magnificent Seven." Artificial Intelligence Stars Nvidia stands out, posting impressive growth of over 80% thanks to its role as a leader in AI chips. Meta Platforms is also showing notable success, increasing its value by 37% and paying dividends for the first time in February. Tests for titans of technology At the same time, not all major players are lucky. Apple faces an 11% loss as the company comes under pressure in China and from regulators. Tesla is also experiencing a 29% decline, driven by concerns about demand for electric vehicles. Redistribution of influence According to S&P Dow Jones Indices, the Magnificent Seven are responsible for 40% of the S&P 500's year-to-date gain, down significantly from last year, when they contributed more than 60%. This suggests the rally is expanding to other stocks, offsetting the current decline. A look at inflation ahead of the holiday Against the backdrop of the upcoming Good Friday celebration and the closure of US stock markets, analysts are eagerly awaiting the publication of the PCE index. The index, the Federal Reserve's preferred measure of inflation, will provide insight into the possible timing and extent of upcoming interest rate cuts. Minor changes compared to expectations The Dow Jones Industrial Average gained some ground, gaining 0.12%, while the S&P 500 also rose a modest 0.11%. In contrast, the Nasdaq Composite fell slightly by 0.12%, reflecting the market's mixed reaction to the current economic outlook. Weekly and monthly achievements Over the past week, the Dow Jones rose 0.84%, the S&P 500 rose 0.39%, and the Nasdaq rose 0.3%. March gains were notable, with the Dow Jones up 2.08%, the S&P 500 up 3.1% and the Nasdaq up 1.79%. This quarter was marked by significant gains for all three indexes: the Dow by 5.62%, the S&P 500 by 10.16%, and the Nasdaq by 9.11%.


News are provided by InstaForex.


Read more: https://ifxpr.com/43CSEI5

[IFX Bella]

Forex Analysis & Reviews: Financial market turmoil: stocks and earnings at risk due to rates



This trend suggests a decrease in inflation, which, however, does not allow the Federal Reserve to accurately determine when the process of lowering interest rates will begin. Previously, there were expectations that the Federal Reserve would begin the process of cutting rates as early as June.

However, this week's robust economic indicators have sent government bond yields rising to levels not seen in months. This became the reason for market speculation regarding a possible deviation from the planned rate reduction schedule. In this context, Federal Reserve Chairman Jerome Powell emphasized the consensus among policymakers that rate cuts will become necessary at some point this year. However, such a decision will only be made after there is credible evidence that inflation is reliably approaching the target level of 2%.

Stock prices fell after the release of the National Institute of ADP's report on employment, according to which the number of jobs in the private sector grew by 184 thousand in March. This indicates the dynamism of economic development. The report also shows a significant increase in the average salary of employees changing jobs - an increase of 10% in annual terms compared to 7.6% in February, which acts as a negative signal for inflation trends.

However, an analysis by the Institute for Supply Management (ISM) in services found input costs for businesses to fall to a four-year low, indicating a positive outlook for inflation. At the end of the day, the S&P 500 and Nasdaq indexes showed gains, supported by news of a slowdown in the US services sector in March. However, the rise was muted in light of statements by Jerome Powell, chairman of the Federal Reserve, that changes in interest rate policy were not expected in the near future.

The leading sectors of the S&P 500 index showed positive dynamics, with the most significant gains observed in the energy, materials and telecommunications services sectors. Additional data from the Institute for Supply Management released Wednesday showed the services PMI fell to 51.4 in March from 52.6 in February.

The result was below analysts' expectations, who had expected better results in a Reuters poll. A score above 50 symbolizes expansion in the services sector, which accounts for a large portion of the American economy. It is reported that despite the slowdown, the US economy continues to grow, albeit at a more moderate pace. The Dow Jones Industrial Average suffered minor losses, falling 43.1 points (0.11%) to close at 39,127.14.

Meanwhile, the S&P 500 gained 5.68 points (0.11%) to finish at 5,211.49 and the Nasdaq Composite rose 37.01 points (0.23%) to close at 16,277.46. The revision of forecasts for interest rate cuts by the US Federal Reserve from June became the subject of discussion in the market after the publication of the latest positive economic data. Ulta Beauty shares fell 15.3% after the company gave a downward outlook at a cosmetics industry conference. Shares of other players in the sector such as e.l.f. Beauty and Coty also recorded declines.

Intel reported a $7 billion loss at its foundry division for 2023, topping the previous $5.2 billion loss reported a year earlier. This caused the company's shares to fall by 8.2%. Total stock trading volume on U.S. exchanges reached 11.03 billion, slightly below the average of 11.76 billion over the past 20 trading days. On the New York Stock Exchange, advancers outnumbered decliners by a 1.66-to-1 ratio, and on the Nasdaq, advancers outnumbered gainers by a 1.25-to-1 ratio.

The MSCI global equity index recorded a slight rise of 0.1%, while government bond yields fell. The 10-year U.S. Treasury yield fell 1.6 basis points to 4.349%, after earlier setting a four-month record of 4.429%. The pan-European STOXX 600 index rose 0.29%, reflecting positive reception of ISM data by European investors. In the US financial market, the S&P 500 index rose 0.11%, the Nasdaq Composite index rose 0.23%, while the Dow Jones Industrial Average suffered slight losses, decreasing by 0.11%. Atlanta Federal Reserve Bank President Raphael Bostic, speaking to CNBC, stressed that the Federal Reserve should not cut its key interest rate until the end of this year. He repeated his position that the reduction in borrowing costs should only occur once in 2024.

The dollar index, which measures the value of the US dollar against a basket of six major currencies, stabilized near its highest in the past four and a half months, supporting the Japanese yen at lows not seen in many years. However, the risk of foreign exchange market intervention from the Japanese authorities limited the further fall of the yen.

The dollar index fell slightly by 0.50%, while the dollar strengthened against the yen by 0.11%, reaching 151.68 yen per dollar. The price of US oil increased by 28 cents, reaching $85.43 per barrel. Meanwhile, Brent crude rose 43 cents to settle at $89.35 a barrel. Gold also posted notable gains, reaching a new record high. US gold futures rose 1.5% to $2,315 an ounce. Bitcoin rose marginally, adding 0.21% to reach $65,801.00.

News are provided by InstaForex.

Read more: https://ifxpr.com/3TIvdJ6

[IFX Bella]

Forex Analysis & Reviews: Behind the scenes of Wall Street's rise: the impact of employment data on the stock market



At the end of the trading week, American stock markets recorded gains thanks to an optimistic jobs report confirming the strength of the country's economy. This bolstered confidence that the economic downturn could be delayed, despite speculation that the Federal Reserve may revise plans to adjust interest rates.

Growth was noted in all key sectors of the S&P 500 index, among which the communications, industrial and information technology sectors showed the largest gains.

The U.S. Department of Labor said significantly more jobs were created in March than expected and wages continued to rise, signaling the economy is on a strong foundation as it closes out the first quarter.

Such data prompted a reassessment of expectations regarding the Fed's interest rate policy. Experts suggest rate increases may be delayed as the likelihood of a recession appears low. Tom Plumb, president and portfolio manager of Madison, Wisconsin-based Plumb Funds, spoke out.

"As we watch the economy, it is clear that stability does not necessarily lead to inflation. This month's jobs report reinforces the belief that the chances of a recession are diminishing, which is much more important than forecasts for lower interest rates," Plumb said.

The likelihood of interest rates lowering by June and forecasts for their further reduction this year have also decreased. Fresh data pointing to a slowdown in the US services sector, as well as recent remarks from Federal Reserve Chairman Jerome Powell, have strengthened the view that interest rate cuts are likely to be considered in 2024. However, on Thursday Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, expressed the view that interest rates may not be needed this year.

A slowdown in year-over-year growth in average hourly earnings could restore confidence that wage growth will moderate, said Dec Mullarkey, director of investment strategy and asset allocation at Boston-based SLC Management. "At this point, this gives the Federal Reserve additional reason to be cautious and slightly changes the likelihood of a rate cut this year from three to two," he added. Research among small businesses has found a decline in hiring, while wages remain slightly above the Federal Reserve's 2% inflation target, said Roosevelt Bowman, chief investment strategist at Bernstein Private Wealth Management in New York. .

Next week's consumer price index (CPI) is expected to show core inflation falling to 3.7% in March from 3.8% in the previous month, which is likely to weigh on the Federal Reserve's near-term policy. The Dow Jones Industrial Average rose 307.06 points (0.80%) to 38,904.04, while the Standard & Poor's 500 rose 57.13 points (1.11%) to 5,204. 34.

The Nasdaq Composite Index also posted gains, adding 199.44 points (1.24%) to close at 16,248.52. However, at the end of the week, after mixed economic data, including reports of activity in the service sector and a strengthening manufacturing sector, all three major indexes recorded declines: the Dow Jones lost 2.3%, the S&P 500 fell 1%, and Nasdaq - by 0.8%. Money markets are now forecasting about two interest rate cuts over the course of the year instead of three as predicted a few weeks ago, according to LSEG. Tesla (TSLA.O) deviated from the broader market on the day, with shares down 3.6% following a report that the company would abandon development of a budget car model. The move was expected to make Tesla a consumer-facing company and boost its growth.

Krispy Kreme (DNUT.O) shares rose 7.3% as Piper Sandler analysts revised their rating from neutral to outperform. Shockwave Medical (SWAV.O) also rose 2% after announcing it would buy Johnson & Johnson (JNJ.N) for $12.5 billion. The yield on 10-year US Treasuries rose 7.5 basis points to 4.384%, with bond prices inversely related to their yield.

The US dollar index, which measures its value against a basket of six currencies, rose 0.07%. The spot gold price set a record high, reaching $2,330.06 per ounce, while US gold futures rose 1.6% to $2,345.4.

The MSCI Global Share Index (.MIWD00000PUS) closed up 0.4% despite losses in Europe, where the pan-European STOXX 600 index (.STOXX) was down 0.84%. However, the US stock market showed gains, with the Dow Jones Industrial Average (.DJI) up 0.77%, the S&P 500 (.SPX) up 0.96% and the Nasdaq Composite (.IXIC) up 1.09%. . Oil prices continued their upward trend for a second week in a row, boosted by geopolitical tensions in the Middle East, worries about a possible supply crunch and forecasts for stronger demand.

News are provided by InstaForex.

Read more: https://www.instaforex.eu/forex_analysis/357974

[IFX Bella]

Forex Analysis & Reviews: Financial future on the horizon: US stocks rise ahead of consumer price news





On Tuesday, ahead of the release of key inflation data, the Nasdaq and S&P 500 indices showed moderate growth, despite a decline in the financial sector. This happened ahead of the reporting season for leading US banks, which begins on Friday. The Nasdaq Composite, supported by strength in semiconductors, posted a notable gain, while the S&P 500 gained minimally.

The Dow Jones Industrial Average closed almost unchanged. Investors were focused on Wednesday's consumer price index, which could have a significant impact on the Federal Reserve's interest rate adjustment decisions in light of recent positive economic data, including an impressive labor market report. Among the large banks whose reports interested the market were JPMorgan Chase & Co, Wells Fargo & Co and Citigroup Inc, which are included in the S&P banking index and showed a decline in their activity in recent trading.

"Financial companies' first-quarter earnings typically set the pace for the entire season," said Bill Northey, who serves as senior director of investments at U.S. Bank Wealth Management in Billings, Montana. "We see cyclical sectors as a measure of the overall health of the corporate landscape in the United States." Analysts predict that inflation will gradually decline toward the Federal Reserve's target level of 2%. However, the National Federation of Independent Business on Tuesday reported optimism among small businesses fell to an 11-year low in March, with inflation as the top concern.

"The decline in small business sentiment is a key signal," Green emphasized. "This is a repeat of the trend of recent years, where large companies feel confident, while small businesses experience significant difficulties." The Dow Jones Industrial Average fell 9.13 points, or 0.02%, to close at 38883.67. The S&P 500 rose 7.52 points, or 0.14%, to finish at 5209.91, while the Nasdaq Composite rose 52.68 points, or 0.32%, to close at 16306.64. Of the 11 key sectors in the S&P 500, nine posted gains, with real estate posting the biggest gains. The financial services sector showed the least dynamics.

According to the latest forecasts from LSEG, overall first-quarter earnings growth for S&P 500 companies is expected to reach 5% year over year, down from initial expectations of 7.2% at the start of the quarter. Stocks related to cryptocurrencies and blockchain technology fell, reflecting the decline in the value of Bitcoin. In particular, shares of Coinbase Global and software developer MicroStrategy lost 5.5% and 4.8%, respectively.

Moderna stock stood out, however, rising 6.2% after announcing positive results from an early-stage trial of a customized cancer vaccine developed with Merck. Alphabet Inc shares also rose 1.1%, moving the company closer to the significant milestone of a $2 trillion market capitalization. On the New York Stock Exchange, advancers outnumbered decliners by a 1.44-to-1 ratio. On the Nasdaq, advancers outnumbered decliners by a 1.33-to-1 ratio. Oil prices fell for the second day in a row as negotiations to reach a truce in Gaza continue, encountering obstacles from Egyptian and Qatari mediators. On Monday, Brent oil prices fell for the first time in the last five trading sessions, while the price of American oil fell for the first time in the last seven days. The US dollar is showing stability amid investors' anticipation of the upcoming US inflation data expected on Wednesday.

Meanwhile, the Japanese yen remains near its multi-year lows, prompting vigilance among traders about possible moves by Japan to stabilize the currency. Those expectations bode well for the big banks' first quarterly earnings reports on Friday. "We are on the verge of important inflation data and financial reports. Some investors may choose to adopt a more conservative strategy ahead of these key events," said Jeff Kleintop, chief global investment strategist at Schwab.

"Despite the stock market's strong first quarter performance, the question remains whether earnings were strong enough to support this development, and whether guidance from business leaders will be able to confirm the more confident growth expectations that the market has already priced in?" At the beginning of the trading day, the shares showed growth, but then the dynamics weakened, and by the close of trading, some of them were able to partially recover lost positions.

Gene Goldman, chief investment officer at Cetera Investment Management, said: "With current high valuations and questions about the Federal Reserve's rate plans, markets are reflecting the situation with perfect accuracy. Any higher-than-expected CPI reading could make it difficult to be optimistic about a Fed rate cut."

News are provided by InstaForex.

Read more: https://ifxpr.com/43V13qL

[IFX Bella]

Forex Analysis & Reviews: Crash on Wall Street: Inflation vs. Rate Cut



On Wednesday, American stock markets experienced a decline, reaching minimum closing levels against the backdrop of published inflation data, which exceeded experts' expectations. The figures dampened investor optimism that the US Federal Reserve could begin cutting interest rates by the summer.

The publication of the US Department of Labor's report on the consumer price index (CPI), which showed results worse than expected, caused an immediate negative reaction in the markets. Major US stock indexes fell sharply into the red as trading began, highlighting the difficulty of getting inflation back to the Fed's 2% target. Ryan Detrick, lead market analyst at Carson Group, noted that the surprise inflation data led to a "sell first, ask questions later" strategy. This in turn cast doubt not only on the timing of the first rate cut, but also on the size of the upcoming cut. Concerns outlined in the minutes of the Fed's March meeting indicate a possible stagnation of inflation towards the target level, which may require the extension of tight monetary policy beyond the expected period.

U.S. Treasury yields jumped while stock indexes felt pressured to decline after reporting higher-than-expected growth in consumer prices in March. This event reduced confidence in how quickly and to what extent the Federal Reserve could cut interest rates. In the foreign exchange market, the US dollar index strengthened in response to the release of data, and the dollar against the Japanese yen reached its highest level since 1990. Investors are closely monitoring the possible reaction of the Japanese authorities, who may take steps to stabilize the yen. A report from the U.S. Bureau of Labor Statistics recorded a 0.4% rise in the consumer price index last month, mirroring February's trend, due in large part to increases in gasoline and housing costs. This resulted in an annual growth index of 3.5%, compared with economists' forecasts for 0.3% monthly growth and 3.4% annual growth. These indicators significantly changed the mood of traders, significantly reducing expectations for the Federal Reserve to cut interest rates in June from 62% to 17%.

In addition, the likelihood of a July rate cut was also revised down from 76% to 41%, according to data from CME Group's FedWatch tool. Michael Hans, chief investment officer at Citizens Private Wealth, emphasizes that the current environment remains uncertain and challenging for the Federal Reserve, which has yet to declare victory over inflation. "The Fed would prefer to rely on additional data to support its confidence in achieving its 2% inflation target," he says. He said the current situation requires a continuation of a cautious strategy, especially as recent data has prompted a revision of expectations regarding the timing of a potential interest rate cut. Elevated yields on major US government bonds, which topped the 4.5% threshold and reached their highest since last November, put further pressure on stock prices. Sectors most sensitive to changes in interest rates were particularly affected, with the real estate market recording its largest daily decline since June 2022.

Housing stocks posted their biggest daily decline since Jan. 23, while the small-cap Russell 2000 index posted its biggest daily decline since Feb. 13. Ryan Detrick noted that "the sectors most exposed to interest rates, including real estate, homebuilding and small-cap companies, experienced significant losses today." The likelihood of the Fed cutting interest rates by 25 basis points in June fell to 16.5% from 56% just before the report, according to CME Group's FedWatch tool.

The Dow Jones Industrial Average lost 422.16 points, down 1.09%, to 38,461.51. The S&P 500 fell 49.27 points (down 0.95%) to 5,160.64 and the Nasdaq composite fell 136.28 points (down 0.84%) to 16,170.36. Among the eleven key sectors of the S&P 500 index, all but energy ended the trading day in the red, with real estate posting the biggest decline. Investors' eyes are now on Thursday's upcoming producer price report, which will provide a clearer picture of inflation in March, as well as the unofficial start of quarterly earnings season.

A new round of reporting begins on Friday when financial giants such as JPMorgan Chase & Co, Citigroup Inc, and Wells Fargo & Co report their financial results. Analysts expect overall first-quarter S&P 500 earnings to rise 5.0% year-over-year, a notable decline from the 7.2% growth forecast at the start of January, according to LSEG. Megacorporations in the growth sector were mostly down, but Nvidia Inc was the exception, rising 2.0%. US shares of Alibaba also saw a 2.2% gain after Jack Ma, the company's co-founder, addressed a memo to employees in which he supported plans to restructure the Internet giant. It's a rare message from a businessman who has stayed out of the public eye in recent years. On the New York Stock Exchange (NYSE), decliners far outnumbered advancers by a ratio of 5.93 to 1. A similar trend was seen on the Nasdaq, where for every gainer, 3.58 falling stocks. MSCI's global equity index fell 6.91 points, or 0.89%, to 772.32.


News are provided by InstaForex.

Read more: https://ifxpr.com/3vKfSjd

[IFX Bella]

Forex Analysis & Reviews: Energy in Focus: What news awaits investors on Wall Street



US stocks came under selling pressure on Friday amid disappointing results from major US banks, capping a week packed with inflation data, changing market expectations for Federal Reserve policy and rising geopolitical tensions. All three leading indexes fell more than 1%, extending their losses for the week. The S&P 500 (.SPX) posted its biggest weekly decline since January, while the Dow Jones Industrial Average (.DJI) suffered its biggest loss since March 2023. Mike Dixon, head of research at Horizon Investments in Charlotte, North Carolina, said: "In light of the macroeconomic environment, sharply worsening inflation is putting pressure on companies, especially those preparing to report earnings this quarter. There is some nervousness about earnings expectations ". The release of results from the three largest banks marked the unofficial start of the first quarter reporting season. For example, JPMorgan Chase & Co (JPM.N), the largest US bank by assets, reported profit growth of 6%, but its forecast for net interest income fell short of expectations, causing its share price to fall 6.5%. . Wells Fargo & Co (WFC.N) shares also fell after earnings fell 7% as net interest income fell due to weak borrowing demand. Citigroup (CN) suffered losses due to severance benefits and deposit insurance costs, sending its stock price down 1.7%. Boston Fed President Susan Collins said she expects several rate cuts this year but said inflation may take some time to return to target. The Dow Jones Industrial Average (.DJI) fell 475.84 points, or 1.24%, to 37,983.24. The S&P 500 Index (.SPX) fell 75.65 points, or 1.46%, to close at 5,123.41, and the Nasdaq Composite Index (.IXIC) fell 267.10 points, or 1.62%, to close at 16,175.09. All 11 major sectors of the S&P 500 index ended in the red, with the most significant percentage losses recorded in the commodities sector (.SPLRCM). Shares of Advanced Micro Devices (AMD.O) and Intel (INTC.O) fell 4.2% and 5.2%, respectively, after reports that Chinese officials earlier this year ordered the country's largest telecom operator to withdraw from using foreign chips by 2027. US Steel (X.N) shares fell 2.1% after shareholders voted to approve its proposed merger with Nippon Steel Corporation (5401.T). On the New York Stock Exchange, the ratio of decliners to advancers was 4.19 to 1, while on the Nasdaq the ratio was 3.16 to 1, contributing to the overall decline.

News are provided by InstaForex.

Read more: https://ifxpr.com/4d0eSZ6

[IFX Bella]

Forex Analysis & Reviews: The Fed and global instability: a double blow to American markets



On Wednesday, the US stock market showed a decline, which is associated with investors' assessment of the Federal Reserve's actions in managing interest rates and the observation of moderate financial results at the start of the reporting season. The US dollar and Treasury yields weakened, retreating from their highs in months, while gold retreated from record levels. The three main US stock market indices ended the day with losses, with the Nasdaq particularly affected, which suffered losses of 1.15% due to a decline in the value of shares in the technology sector. As the first quarter reporting season began, travel companies and USB Bank baffled the market by failing to report impressive earnings and interest income figures, respectively. Travelers shares fell 7.41%, one of the biggest declines in the S&P 500 index and a record loss for the Dow Industrials, after the insurance giant missed analysts' first-quarter earnings estimates. Prologis and Abbott Laboratories also weighed heavily on the S&P after their quarterly results, with Prologis down 7.19% and Abbott Laboratories down 3.03%, despite hitting quarterly targets but missing full-year guidance. After two months of gains at the end of 2023 that continued into the start of the current quarter, the stock market has struggled, with the S&P 500 recording its fourth straight decline and heading for its third consecutive weekly loss. This comes as investors are revising their expectations about the timing and extent of a possible Federal Reserve interest rate cut.

News are provided by InstaForex.


Read more: https://ifxpr.com/3xJhTwD