Programing note: The Morning Market Wrap will not be published on the 29th of March and 1st of April due to public holidays, resuming publication on Tuesday 2nd of April. US equities gained on Wednesday ahead of GDP data on Thursday.
United States
The S&P500 rose 0.86% with all sectors higher and 90% finishing up. The Dow Jones also gained 1.22% along with the Nasdaq Composite 0.51% and Russell 2000 2.13% with the VIX -3.85% lower at 12.73. There was little economic data to guide investors, with tonight’s final reading of Q4 GDP in focus, followed by PCE inflation data on Friday. US markets will be closed on Friday for the Good Friday public holiday, resuming trading on Monday.
Europe
European equities extended gains to a new record high after Sweden’s Riksbank kept interest rates unchanged and signal it expects to lower rates in the next quarter. Elsewhere, Eurozone economic confidence was in line with expectations at -14.9 in March. The Euro Stoxx 600 rose 0.13% along with the DAX 0.5%, CAC 0.25% and FTSE100 0.01%. The Euro Stoxx 600 is on track to outperform the S&P500 for the month of March, with analysts citing lower valuations compared to US peers as driving capital flows towards the region.
Australia
The ASX is expected to open higher this morning, with ASX200 futures up 60 points or 0.76% to 7,930. The index rose 0.51% on Wednesday driven by gains in financials 0.58% and health care 1.28% although individual stock performance was mixed with only 58% of stocks higher. Boosting investor optimism was the latest monthly inflation estimate for February which was slightly better than expected. For the 12 months to February, headline prices rose 3.4% compared to estimates of 3.5% while the trimmed mean rose 3.9% after a 3.8% gain for the 12 months to January. The Australian Dollar whipsawed before finishing little changed at 0.6535 while the 3-year government bond was -2 basis points lower at 3.642%. Expectations of rate cuts later this year were little changed, signalling the inflation data was as expected, with a first cut expected by September, and a good probability of a second cut by the end of the year.
Commodities
Oil prices edged up overnight with both WTI and Brent crude 0.11% and 0.13% higher respectively. The modest gains follow a unexpected build in US crude oil inventories of 3.165m barrels vs -1.275m with gasoline inventories also rising 1.299m barrels compared to estimates of a -1.65m barrel draw. Iron ore futures fell a further -2.75% on Wednesday but are 0.5% higher this morning at US$101.8 with copper up 0.39%. Gold is 0.7% higher at US$2,194 along with silver 0.64% while Bitcoin is -1.33% weaker.
Economic Calendar
28th March 2024
ANZ Business Confidence (MoM Mar) 11:00
Australian Retail Sales (MoM Feb) 11:30
Australian Consumer Inflation Expectations (MoM Mar) 12:00
UK GDP (YoY Q4) 18:00
German Unemployment (MoM Mar) 19:55
US GDP (QoQ Q4) 23:30
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
