Daily Digest: Thursday 28th March
USA
US final GDP figures for Q4 2023 were released on Thursday afternoon, indicating that the US economy grew at an annual rate of 3.4%. These figures sit 0.2 percentage points higher than analyst expectations, signalling a positive growth shock. Index reactions to today’s data prints was generally positive, the Dow ($INDU) led gains rising 0.12% to 39,807.37, trading marginally off its all-time highs throughout the session, while the S&P 500 ($SPX) rose 0.11% to 5,254.35, breaking new highs at its intraday peak. Despite a seemingly positive outlook, the Nasdaq 100 ($NDX) fell 0.14% to 18,254.69.
Shares in social media platform Reddit ($RDDT)continued to trade down following last weeks IPO, marking a second consecutive session of declines, with losses extending to some 17.56% from Monday’s close. Prices now sit at $49.30 per share, though volatility is expected to continue. Shares in Trump Media & Technology Group ($DJT) the owner of the Truth Social platform followed a similar trajectory through Thursday, falling 6.43% to $61.96, as the initial ‘hype’ around the recently public firm begins to fade.
Sam Bankman-Fried, the founder of collapsed cryptocurrency exchange FTX faced sentencing in New York on Thursday. SBF was handed a 25 year sentence alongside a multi-billion Dollar fine for his role within the fraudulent exchange and its associated businesses. The end of Bankman-Fried’s trial should signal the beginning of the closure of a specifically problematic chapter in cryptocurrency history, which highlighted significant issues with the decentralised and unregulated nature of industry activity.
US markets are shut on Friday as the nation celebrates Good Friday, trading will resume Monday morning.
Europe
The UK’s final quarter-on-quarter GDP print signalled a 0.3% contraction in economic activity through Q4 of 2023. Figures indicate that toward the end of last year the UK economy did in fact fall into recession, despite total economic growth remaining positive. As these figures are lagging, the impact on financial market activity is somewhat limited, especially when figures do not significantly deviate from analyst predictions and market expectations.
The FTSE 100 (FTSE) closed higher for the third consecutive session, rising 0.26% to 7,952.62, with its intraday peaks just 25.18 off the 8,000 level. Index activity was also supported by stronger final US GDP figures for the same period last year. Trading will resume on Tuesday 2nd April as the UK celebrates Easter.
Activity across Europe was strong, spurred on by international macroeconomic prints, with the DAX, CAC, and STOXX 600 all breaking new highs at their intraday peaks. The STOXX 600 (€SXXP) closed 0.18% up at 512.67, while the DAX (€GDAXI) rose 0.083% to 18,492.49, and CAC (€FCHI) rose 0.012% to 8,205.81.
Rest of the World
The final US GDP print fell after the closing bell for Japanese traders, with market participants failing to find any positive catalysts to trade from, as the Nikkei 225 (¥N225) slipped 1.46% or 594.66 points to 40,168.07. This marks the strongest single session decline in the indexes price in over a week. Additionally, Thursday’s Tokyo Area CPI releases after the close, meaning Friday’s open will likely see some excessive volatility, as traders price in two key economic data releases.
The YoY Tokyo Area CPI is expected to be 2.4%, a figure some 0.4 percentage points above the BOJ’s inflation target. However, in the unique case of Japan, rising inflation remains a positive signal as it reinforces the nation’s exit from deflation. Despite the best efforts of currency traders to stem Yen declines, the currency continued to depreciate against the US Dollar, falling to ¥151.395 as of 20:11 GMT, a 0.148 decrease in value from the same time yesterday.
The Shanghai Stock Exchange Composite Index (¥SSE) managed to reverse some of yesterday’s losses, closing up 0.59% at 3,010.66. Upward momentum on the Indian Nifty 50 (₹NSEI) also strengthened through Thursday, as the index closed 0.92% up at 22,236.90, as the index approaches its all-time highs. This movement comes as traders price in the potential outcomes of this Spring’s Indian elections, while institutions continue to back the nations revised economic growth projections.
Cryptocurrencies
The total market capitalisation of all cryptocurrencies rose to $2.66 trillion through Thursday, marking an increase of some $70 billion USD from 21:00 GMT on Wednesday. During the same 24hr period Bitcoin prices rose 2.53% as traders managed to break and hold the $70,000 level, with prices now $70,673.55, Ethereum also began to move upwards rising 1.42% to $3,562. Popular meme coin Doge outperformed the market throughout trading, rising 19.57% as investors show their interest in the coin is far from over, helping prices to reach $0.222.
'Crypto Stocks'
Shares in Coinbase ($COIN) managed to rebound, following Yesterday’s announcement of an SEC lawsuit against the firm. Traders managed to erase almost all of Wednesday’s declines, as prices rose 3.28% to $265.12. Meanwhile, MicroStrategy ($MSTR) shares sank 11.18%, after New York based Kerrisdale Capital announced a long bitcoin, short MicroStrategy position, stating MSTR is simply a proxy for Bitcoin, which trades at an unjust premium.
Commodities
Crude Oil prices rallied through Thursday, after a relatively slow start to the week. Prices broke the $83 level, trading at $83.05 per barrel by 21:00 GMT, marking a 2.09% 24hr increase. This move seems to have culminated from a mix of catalysts experienced throughout the last month on both the supply and demand side. Traders seem to be pricing in a weakening of supply, due to measures enforced by OPEC+, alongside the more recent Ukrainian attacks on Russian production infrastructure. On the demand side US inventories rose this week, while Asian demand rises off the back of stronger growth expectations.
Gold rose to new all-time highs, gaining 1.60% through Thursday, trading at $2.248.20 per ounce. Once again momentum in the Gold market seems to be the result of growing anticipation for major central bank interest rate cuts. The US PCE release on Friday should act as a further confirmation of price direction, if figures fall in line or below expectations, this would signal a further strengthening of inflation controls is unnecessary. Increasingly the likelihood of rate hikes.
What to watch
US Core PCE Price Index (MoM)
FED Chair Powell Speech
Tokyo Area CPI YoY
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
https://www.kerrisdalecap.com/blog/
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