US equities were lower on Monday on the back of comments from Fed officials weighing down investor sentiment on rate cuts, while traders await key data through the week.
United States
The major indices in the US were lower on Monday on the back of the Fed President for Atlanta, Raphael Bostic, recent comments, while investors apply a ‘wait-and-see approach’ as they prepare for a busy week of economic data. In a recent speech, Bostic issued caution that a rate cut may see an increase in demand which may see price pressures grow. Bostic also went on to state that he believes the rate cuts wouldn’t be “back-to-back”, adding “I think there is some appeal to acting and then seeing how participants in the markets, businesses leaders and families respond to that.”
Among individual performers, shares in Apple fell -2.54% after the technology giant was fined $3 billion by the European Union regulators for breaching antitrust regulations, while Super Micro Computer rose by 25% after news emerged that the company will soon be joining the S&P500. In economic data, investors will be focusing on the latest service PMI data with the report expected to show a slight contraction.
At the close, the Dow Jones slid -0.25%, the S&P500 was -0.12% lower, and the Nasdaq Composite was down -0.41%, with the VIX at 13.49. At the close, treasury yields were higher, with the 2-year rates up 7.7 basis points to 4.608% and the 10-year up +3.7 basis points to 4.217%, while the US dollar was relatively unchanged at -0.02%.
Europe
European stocks were mostly lower on Monday with the Euro Stoxx 600 relatively unchanged at -0.03% along with the DAX down -0.11%, the FTSE100 -0.55% lower, while the CAC closed +0.28% higher. In economic data, investors will be focusing on the latest retail sales monitor data out of the UK, with the report expecting to show a slight expansion on the previous reading of 1.4% to 1.6%.
Australia
The ASX is expected to edge lower this morning, with ASX200 futures finishing -3.0 points or -0.039% lower. The index slid -0.13% on Monday with materials leading the decline falling -0.72%, while real estate and information technology rose +1.34% and +0.92% respectively. Shares in Fletcher Building fell 2% after chairman Bruce Hassall brought forward his exit, while real estate and gold rose after a softer US manufacturing reading boosted investor optimism the Federal Reserve could begin cutting rates in the first half of this year.
In economic data, Monday saw the release of the latest building permits data with the report coming in below forecasts of 4.0% at -1.0%. Across the region, investors will be focusing on the latest PMI data out of China, with traders also focusing on the National People’s Congress.
Australian Building Permits (MoM %)
Commodities
Oil prices were lower on Monday with WTI crude and Brent both down -1.54% and -0.84% to US$78.74 and US$82.82 a barrel. Iron ore futures in Singapore finished higher on Monday by +2.09% and are relatively unchanged at -0.02% this morning at US$115.60, while copper finished -0.05% lower on Monday. Gold surged 1.58% to US$2,115 an oz, with silver also up +3.42% along with Bitcoin rising 6.62% to 67,015.48.
Economic Calendar
5th March 2024
China National People’s Congress 11:00
UK Retail Sales Monitor (YoY Feb) 11:01
China PMI (MoM Feb) 12:45
US Services PMI (MoM Feb) 02:00
US Fed Barr Speech 04:00
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.
