Market recap: Week of 05—09 Feb 2024

The Wall Street Journal: US strong growth & market reaction

• Employers added 353,000 jobs, exceeding expectations and signalling robust economic strength.
• Bond yields surged post-report, suggesting investor confidence in a delayed Federal Reserve rate cut.
• The payroll report could keep the Fed on hold for now, with the next meeting on March 19-20.
• While stocks saw gains, smaller companies faced challenges amidst concerns over prolonged rate cuts.

Kitco: Survey on 2024 gold and silver

• UBS predicts gold and silver to climb amid expectations of Federal Reserve rate cuts.
• Gold thrives as interest rates fall, offering a hedge against low bond yields.
• Silver could outperform gold in a scenario of Fed easing, says UBS strategist.
• Mixed opinions: Alliance Financial sees gold declining further, while Zaye Capital Markets remains cautious.

9news: Australian Central Bank rate decision 06 Feb

• Reserve Bank of Australia (RBA) expected to maintain cash rate, update economic outlook
• December Consumer Price Index (CPI) shows 4.1% inflation
• Organisation for Economic Co-operation and Development (OECD) warns central banks against swift interest rate cuts
• RBA to hold eight meetings in 2024, skipping April, July, October
• AUDUSD below 10-day and 50-day moving averages, signalling potential weakness

The Business Standard: China CPI on 08 Feb

• Deflationary pressures rise: Weak domestic demand
• Importance of supportive fiscal policy emphasised
• Consumer behaviour affected: Delayed purchases expected
• Beijing's fiscal policy boost: Increased budget deficit, encouragement for banks
• Pork prices impact: Slumping prices affect CPI figures
• Ample hog supply & sluggish consumption contribute

ABC News: RBA holds rates

• RBA decision to keep rates on hold had been widely anticipated
• An increasing number of economists now expect the RBA to start cutting rates in the second half of this year as inflation continues to moderate
• RBA statement: Inflation continued to ease in the December quarter. Despite this progress, inflation remains high at 4.1%.
• Returning inflation to target within a reasonable timeframe remains the RBA Board’s highest priority. This is consistent with the RBA’s mandate for price stability and full employment.

CNBC and Reuters: General Motors recall 

• General Motors is recalling 323,232 vehicles to address an issue with the tailgate that may open while driving, potentially causing a road hazard, the National Highway Traffic Safety Administration.
• U.S. vehicle sales increased 14.1%, reported sales of roughly 2.6 million vehicles in 2023, representing the automaker’s best year since 2019.
• Compared to its competitors in the US, Toyota sold 2.3 million, and Honda sold 1.3 million cars in 2023.

Reuters: Uncertainty creeps back to US Treasury

• Treasury yield surge
• Fed caution sparks recalibration
• 10-year Treasury yield up 20 basis points
• Concerns over bond supply surge
• Expected 2 trillion USD in new government bond issuance
• Robert Tipp, PGIM Fixed Income predicts 10-year yields approaching 5%
• John Madziyire, Vanguard plans to start climbing to 4.5%

Yahoo & BNN Bloomberg: Citigroup warns on Nasdaq

• Citigroup Inc. strategists warn of potential wider rout
• Nasdaq 100 futures bearish wagers completely erased
• Goldman Sachs' Scott Rubner cautions on potential market downturn

Wall Street Journal and CFR: Deflation Tightens in China

• China's consumer prices drop by 0.8% YoY in January
• Prices of fruit, vegetables, and meat decline
• Pork prices plummet by 17.3% YoY
• Income growth slows, challenging debt servicing and spending
• Corporate profits decline, hindering investment and hiring
• Balance-sheet recession looms as debt burden rises
• People’s Bank of China fixes central parity rate to prevent yuan depreciation

Seeking Alpha: JP Morgan says crude oil can rise another 10

• Crude oil expected to surge 10 USD more by May
• JP Morgan forecasts tightening market
• Global economy showing signs of improvement
• Crude inventories decline across regions

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The information contained in this blog is for educational purposes only and is not intended as financial or investment advice. It is considered accurate and correct at the date of publication by the sources. Changes in circumstances after the time of publication may impact the accuracy of the information.

The performance figures quoted refer to the past, and past performance is not a guarantee of future performance or a reliable guide to future performance.

We recommend you do your own research before making any trading decisions.

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