Daily Digest: Wednesday 17th April
USA
Market direction was clearer through Wednesday as the three major indexes closed down. The Nasdaq 100 ($NDX) led declines falling 220.04 points (1.24%) to 17,493.62. The S&P 500 ($SPX) marked a fourth session of declines losing 29.2 points (0.58%) to 5,022, and the Dow fell 45.66 points (0.12%) to 37,753.31.
Europe
The FTSE 100 (FTSE) managed to end its losing streak, rising 27.63 points (0.35%) though the session to 7,847.99. The index met resistance around the 7,730 level before a breakout into the close. 38 constituents closed the session as opposed to yesterday’s 96 signalling a strengthening of sentiment as traders weigh the effect of geopolitical risk on their portfolios. UK CPI data for March came in at 3.2% a 0.2 percentage point decrease from February, despite this figures still came in 0.1 percentage points ahead of expectations suggesting inflation remains stronger than anticipated within the UK economy.
Eurozone CPI data also released this morning, with final year-on-year figures equal to 2.4%, falling in line with analyst expectations. This implies that the ECB may be the second major bank following the SNB to initiate the rate cut cycle, as inflation trends toward the 2% target. The Pan-European STOXX 600 (€SXXP) rose 0.31 points to 498.52, as traders failed to find support above the 500 level. Meanwhile, the German DAX (€GDAXI) rose 3.79 points to 17,770.02, and the French CAC (€FCHI) outperformed the market rising 48.9 points (0.62%) to 7,981.51.
Rest of the World
The Nikkei 225 continued lower through Wednesday, falling a further 509.4 points (1.32%) to 37,961.80. This decline came as traders continued to break key technical levels to the downside, including a tested support at 38,180 during the afternoon, and later the psychologically significant 38,000 level. Geopolitical tensions seem to have driven traders to take more conservative approaches internationally, meaning traders on the Nikkei have failed to experience the full extent of a depreciating Yen on equity prices. As mentioned previously, a decrease in Yen value makes both Japanese produced goods and equities relatively cheaper for foreign consumers and investors. This implies that a continuation of Yen depreciation against the US dollar should support Japanese equity markets to the upside. As of 16:30 GMT the Yen was trading against the US dollar at 154.6570 as it continued downward. The currency remains a point of contention amongst analysts with some expecting central intervention in the near future, though the level of which remains unknown.
The Shanghai Stock Exchange Composite Index (¥SSE) managed to close higher, erasing yesterday’s losses as prices rose 64.31 points (2.14%) to 3,071.38. Traders managed to rebuild support at the 30,030 level before pushing upwards into the close.
Indian markets were closed on Wednesday as the nation celebrated a bank holiday, meaning the Nifty 50 (₹NSEI) will open Thursday at 22,147.90.
Commodities
US crude inventories marked a fourth consecutive increase, rising a further 2,700,000 barrels this week. As noted previously inventory increases are indicative of one of two problems, either supply is too high and is outpacing demand, or demand has decreased which can be a leading indicator of a slowdown in economic activity. Inventory data will have no doubt added to downward sentiment, as WTI crude prices pushed lower for a third session. As of 21:00 GMT prices had fallen 3.1% to $82.71 per barrel, the lowest daily close since March 27th.
Gold traders also faced headwinds, as prices fell 0.81% to 2,388.40 per ounce, the largest single day decline in over a month. Tensions across the Middle East remain central to gold market movements, as traders weigh the potential impacts of a potential Israeli retaliations towards Iran on global geopolitics.
Sources:
https://uk.finance.yahoo.com/world-indices/
https://uk.finance.yahoo.com/commodities
https://www.londonstockexchange.com/indices/ftse-100
https://www.binance.com/en-GB/price/bitcoin
https://www.binance.com/en-GB/price/ethereum
https://qontigo.com/index/sxxp/
Stock Market Activity Today & Latest Stock Market Trends | Nasdaq
https://coinmarketcap.com/charts/#market-cap
https://www.forexfactory.com
Definitions:
YoY - Year on Year, or, Year over Year
MoM - Month on Month, or, Month over Month
QoQ - Quarter on Quarter, or, Quarter over Quarter
ECB - European Central Bank
BOJ - Bank of Japan
Fed - Federal Reserve
BOE - Bank of England
SNB - Swiss National Bank
DOJ - Department of Justice