United States
US stocks advanced for a second consecutive session as major indexes continued to recover from Friday’s reversal. The steady gains stood in stark contrast to the volatility seen over the past month. The S&P 500 rose 0.65% to 5,675, with all sectors except consumer discretionary posting gains. The Dow Jones Industrial Average climbed 0.85% to 41,841, while the Nasdaq Composite edged up 0.31% to close at 17,808.
In an interview, Treasury Secretary Bessent cautioned that there were “no guarantees” the US would avoid a recession, adding that an economic adjustment might be necessary. Bessent downplayed concerns over recent stock market declines, emphasizing that corrections are healthy to prevent crises like those of 2008.
Market gains were broad-based, with small-cap stocks leading the way. The Russell 2000 outperformed, rising 1.34%. Meanwhile, retail sales data released today showed a modest increase of 0.2%, falling short of the 0.6% forecast. However, the figure reassured some investors as it did not indicate a significant economic slowdown. Other economic indicators pointed to weakening sentiment, with the Empire State Manufacturing Index declining to -20 from February’s -5.7. This index represents the number of companies seeing expansion against a contraction Additionally, new orders and shipments saw sharp declines.
Banks once again outperformed, with Bank of America gaining 1.35% and Goldman Sachs advancing 1.84%. Intel continued its strong rally, surging another 6.82% after announcing a new CEO last week, bringing its total gains to 30% since last Tuesday’s low. Netflix climbed 3.49% following broker upgrades that cited improved profit margins for the streaming giant.
Despite the broader market gains, key bellwether stocks had a mixed session. Nvidia dropped 1.75% to $119.53, while Meta edged down 0.44%. In the consumer discretionary sector, Amazon declined 1.11% to $195.74, while Tesla slid another 4.78%, shedding $11.96 to close at $238.01. Further broker downgrades warned of declining sales and potential “brand destruction,” adding to Tesla’s recent losses.
In the bond market, the US 10-year Treasury yield fell 2 basis points to 4.30%. The US dollar weakened, with the Bloomberg Dollar Index declining by 0.26%.
Europe
European markets gained on Monday, with the Euro Stoxx 600 rising 0.79% to close at 550.94, as all sectors finished higher. Energy and healthcare led the gains. In the UK, the FTSE 100 advanced 0.56% to 8,680.98, driven by strength in both mining and energy stocks.
Investor sentiment in Europe remains positive, buoyed by expectations of increased government spending in Germany. A bill facilitating this spending is expected to pass on Tuesday. In a note from Deutsche Bank, analysts suggest that the market has yet to fully grasp the transformative impact of this measure, which could add up to 3-4% to Germany’s GDP by 2027. Also on Tuesday, talks between Russian and U.S. leaders are set to take place, aiming to advance negotiations toward a ceasefire in Ukraine. This development has further lifted market sentiment, with hopes of lower energy prices.
In the energy sector, Shell gained 1.61%, while British Petroleum rose 0.66%. Mining stocks were also in demand, particularly in the copper sector, with Antofagasta jumping 2.27% and Aurubis climbing 1.05%. The best-performing stock in Europe was British insurer Phoenix Group, which surged 10.69% after reporting stronger-than-expected annual profits, driven by growth in its pensions and savings division.
Meanwhile, the OECD revised its forecast for UK economic growth in 2024 to 1.4%, down from its previous estimate of 1.7%, citing ongoing trade uncertainties. This week, investors will focus on the Bank of England’s interest rate decision, where no changes to the current policy settings are expected.
Bond yields declined amid stable market conditions. Germany’s 10-year bund yield fell 5 basis points to 2.82%, while the UK’s equivalent bond yield dropped three basis points to 4.64%. In currency markets, the euro strengthened 0.38% against the U.S. dollar to 1.0920, while the British pound posted a similar gain, rising to 1.2992.
Australia
The Australian share market rallied strongly to start the week, with the ASX200 gaining 0.83% (64.4 points) to close at 7,854.10. 8 of the 11 sectors were higher with materials and energy leading the gains. Healthcare was the worst with a marginal 0.27% fall.
In the materials sector, iron ore miners saw strong demand despite a pullback in iron ore prices from Friday’s close. Market sentiment was buoyed by news of China’s “special action plan” aimed at boosting domestic consumption. Fortescue surged 4.18% to $16.95, while BHP climbed 2.41% to $39.58. Spartan Resources jumped 9.06% after receiving a cash-and-scrip takeover offer from Ramelius Resources, valuing its shares at approximately $1.78. Spartan ended the session at $1.74, while Ramelius closed 0.91% lower at $2.18.
The energy sector also advanced, with Woodside rising 1.92% to $22.81 following the announcement of a 15-year supply agreement with China Resource Gas International. The deal, set to commence in 2027, involves the supply of 600,000 tonnes of liquefied natural gas (LNG) and marks the first long-term agreement between an Australian and a Chinese company in years. Woodside also received support from an ASX substantial holder notice revealing that AustralianSuper had increased its stake in the company by 1% to 7.15%. Ampol gained 2.55% to $24.53 after receiving broker upgrades.
The banking sector benefited from positive sentiment following gains in U.S. equities, with the bank sub-sector rising 1.09%. Commonwealth Bank of Australia (CBA) added 1.62% to close at $144.66. Among the big four banks, NAB was the only decliner after announcing that CFO Nathan Goonan would be leaving to join Westpac. Westpac shares, however, gained 0.95% to finish at $29.89.
Healthcare was weighed down by declines in CSL and ResMed. CSL fell $2.17 (0.87%) to an 18-month low of $247.88, while ResMed dropped 1.27% to $34.85.
Australian bond yields edged lower, with the 10-year yield declining 2 basis points to 4.40%.
In overnight futures trading the ASX200 contract added 53 points, a gain of 0.675% pointing to a third day of increased prices for Australian equities. The AUDUSD was stronger trading at 0.6388 up 1%.
Commodities
Oil prices edged higher at the start of the week, with Brent crude rising 0.67% to US$71.05. West Texas Intermediate gained 38 cents, advancing 0.55% to US$67.56. The weekend attack on Yemen’s Houthi rebel group added a Middle East risk premium to prices, while stimulus measures and stronger-than-expected retail sales data from China also provided support.
Gold advanced 0.57%, hovering at the US$3,000 level. In late trading gold was up US$17.07 at US$3,001. The commodity remained in a holding pattern as traders awaited further updates on tariffs and the Federal Reserve’s stance on economic policy and market volatility later in the week. Silver also edged higher, gaining 0.23% to US$33.88.
Bitcoin rose 1.6% to US$84,572 in relatively quiet trading.
Iron ore slipped 0.79% from its weekend close, trading at US$101.45. Copper, on the other hand, climbed 0.83% to US$9,862 per tonne, gaining US$81. The increase was driven by optimism following reports that China plans to boost household income and consumption.
Economic Calendar
EU:
- German ZEW Economic Sentiment Index (Mar) – 9:00pm
US:
- Building Permits / Housing Starts (Feb) – 11:30pm
- Industrial Production (Feb) – 12:15am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
