US equities extended gains on Thursday following economic data to suggest the Fed is on track to engineer a soft landing.
United States
On Thursday, the latest round of PMI reports in March showed the composite measure was little changed at 52.2 compared to 52.5 previously. Elsewhere, the Conference Board’s leading index for February rose 0.1% compared to expectations of a -0.2% decline. Finally, continuing jobless claims for March 9th were little changed at 1.807m while initial claims for March 16th came in at 210k vs 215k forecast.
US Leading Index (MoM %)
The S&P500 rose 0.39% with most sectors higher, powered by financials 0.85% and industrials 1.0% with 75% of stocks higher. The Dow Jones also rose 0.68%, Nasdaq Composite 0.20% and the Russell 2000 1.28% with the VIX edging lower to 13.01.
Europe
European stocks also rose to fresh records with UK equities rallying after the Bank of England left interest rates unchanged and removed opposition to rate cuts from their guidance. In an unexpected development, hawks from the monetary policy committee dropped their votes for higher rates, in reaction the Pound slumped -1.04% while the FTSE100 surged 1.88%. Elsewhere, the Euro Stoxx 600 climbed 0.9% along with the DAX 0.91% and CAC 0.22%. Elsewhere in economic data, the composite PMI reports for the Eurozone came in at 49.9 modestly above estimates and an improvement from 49.2. The same measure for the UK came in at 52.9, little changed from the prior reading of 53.
UK & Eurozone Composite PMI (MoM)
Australia
The ASX is expected to open modestly lower this morning with ASX200 futures down -14 points or -0.18% to 7,825. The index climbed 1.12% on Thursday driven by broad gains, with financials 1.74%. The Australian dollar initially rallied before reversing to close -0.24% lower after the February employment report was significantly higher than expected. Over the month, 116.5k jobs were added, well above the 40k forecast which saw the unemployment rate drop to 3.7% from 4.1% previously.
Commodities
Oil prices finished modestly lower overnight with both WTI and Brent crude -0.44% and -0.38% lower respectively. Iron ore futures jumped 3.84% on Thursday, although have given up -1.03% of those gains this morning to trade at US$108.65 with copper 0.33% higher. Gold was modestly weaker by -0.23% to US$2,181 with silver slipping -3.29% to US$24.74 along with Bitcoin -2.37%.
Economic Calendar
22nd March 2024
Euro Summit 11:00
UK Retail Sales (YoY Feb) 18:00
German Business Climate (MoM Mar) 20:00
Canadian Retail Sales (MoM Jan) 23:30
Fed Barr Speech 03:00
Fed Bostic Speech 07:00
US PMI (MoM Mar) 00:45
US Leading Index (MoM Feb) 01:00
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.
