By Vivek Kumar
Moving markets today: Asian markets soar, led by South Korea; oil prices ascend, bitcoin steady at $70,000; spotlight on US PCE inflation
After experiencing their strongest weekly gains of the year, both the Dow and S&P 500 indexes slipped on Monday, as investors pondered the Federal Reserve’s potential interest rate moves in light of upcoming inflation data. Asian markets, led by South Korea, showed positive trends in early trading. Oil prices continued their upward momentum on expectations of decreased supply. Goldman Sachs maintains a positive outlook on commodity investments for 2024. US markets will be closed on Friday for the Good Friday holiday, coinciding with the release of the February US Personal Consumption Expenditures (PCE) price index, a crucial gauge of inflation for the Federal Reserve. Here are five key takeaways for your day.
Japan’s corporate service inflation remains unchanged in February
Japan’s business-to-business service inflation remained at 2.1% in February, showing that companies are still passing on higher labour costs. This stability reflects confidence in ongoing wage growth. The Bank of Japan’s data revealed no change in the year-on-year rise in the services producer price index compared to January. The BOJ closely watches service prices as an indicator of whether wage and inflation trends are aligned, a key factor for potential interest rate adjustments.
US and UK charge China with cyber assaults
The US and UK have implemented extensive actions against hackers reportedly backed by the Chinese government, accusing them of conducting significant cyber attacks on various institutions in Washington and Westminster. Seven Chinese nationals have been indicted by the US Department of Justice for their alleged involvement in APT31, a hacking group based in Wuhan believed to be operated by China’s main intelligence service, the FT reported.
The indictment claims that this group sent over 10,000 “malicious” emails containing hidden tracking links to officials within the US federal government, as well as to businesses, including defense sectors, deemed of national economic significance, and even Capitol Hill.
Goldman Sachs maintains bullish outlook on commodities for 2024
Goldman Sachs remains optimistic about investing in commodities throughout 2024, highlighting their current year-to-date return of 9%, with expectations for this to rise to 15% by the year’s end. This positive outlook is supported by both cyclical and structural factors, as well as geopolitical risks.
In a research note dated Sunday, the bank predicts a 20% return in specific sectors such as energy and industrial metals (excluding nickel and zinc) within the S&P GSCI Commodity Index for the same year. Looking ahead over a 12-month period, Goldman Sachs forecasts declines of 9%, 13%, and 27% in the prices of cobalt ($26,000/t), nickel ($15,000/t), and lithium carbonate ($10,000/t), respectively, Reuters reported.
Key highlights to keep tabs on during holiday- shortened week
This week, the economic calendar appears relatively sparse due to various celebrations such as Purim and Holi at the beginning of the week, followed by the observance of Good Friday, potentially leading to shorter trading hours in certain markets. Nonetheless, notable updates are anticipated, including the release of fourth-quarter GDP figures for both the US and UK, along with several reports on consumer sentiment, as reported by the Financial Times.
Of particular interest to investors will be Friday’s unveiling of the US personal consumption expenditures price index, providing fresh insights into inflationary trends. With the first quarter drawing to a close, market fluctuations may occur as fund managers tweak their portfolios.
Trading on UK markets will be halted on March 29th for Good Friday and on April 1st for Easter Monday.
South Korea takes the helm as Asian equities soar
During the latest trading session in the United States, major stock indices experienced declines. Specifically, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all saw drops in their values.
Conversely, in Asia, the Kospi index showed notable growth, with SK Hynix, a chipmaker, leading the surge due to its connection to artificial intelligence technology. Similarly, in Hong Kong, China Resources Land saw a significant uptick in its stock price after reporting earnings that exceeded expectations. Meanwhile, Japan’s Nikkei 225 index remained stable, as did the value of the yen against the dollar.
In the commodities market, both gold and oil prices remained steady. Spot gold was priced at $2,170 per ounce, and Brent crude futures experienced a slight increase. Bitcoin, after a sharp rise on Monday, maintained its value just above $70,000.
