Round up of today's market news *

North American News

Tech Titans Tumble: Nasdaq Takes a Hit as High-Flyers Feel the Pinch

Nviida falls 10% for its worst one-day decline since March 2020

US Market Sees Divergent Trends as Investors Flock Away from Tech Titans to Embrace Industrials: Dow Ascends, NASDAQ Suffers Steepest Slide Since January

In a day of contrasting movements, the US major indices closed with mixed sentiments as investors strategically pivoted out of large-cap technology stocks towards the perceived safety of industrials. The Dow Jones Industrial Average surged ahead, buoyed by this sector rotation, while the NASDAQ Composite Index experienced its most substantial downturn since January 23, marking a stark -2.05% decline.

This shift in market dynamics underscores the ongoing volatility and sensitivity to sector preferences, with investors recalibrating their portfolios amidst broader economic uncertainties and shifting industry narratives.

The final numbers shows:

Dow Industrial Average average rose 211.02 points or 0.56% at 37986.41
S&P index fell -43.87 points or -0.88% at 4967.24. The decline was the 6th consecutive down day for the index.
NASDAQ index tumbled -319.49 points or -2.05% at 15282.01.The decline was the 6th consecutive down day for the index.

The small-cap Russell 2000 rose 4.69 points or 0.24% at 1947.65

For the trading week, the Dow Industrial Average closed near unchanged, but the NASDAQ at its worst trading week since October 2022.

Dow Industrial Average rose 0.01% which was good enough to snap a two-week decline
S&P index fell -3.05% and closed lower for the third consecutive week.
NASDAQ index-5.52%, and has now fallen for four consecutive weeks.

Shares of Nvidia had their worst day since March 2020. Tesla had closed at its lowest level since January 2023.

Top Market Giants See Continued Losses as Closing Bell Nears

Dow +179.56 at 37954.94
Nasdaq -356.89 at 15244.61
S&P -47.32 at 4963.80

The S&P 500 (-0.9%) and Nasdaq Composite (-2.1%) are trailing mostly sideways near session lows.

Mega cap shares continue to move lower. NVIDIA (NVDA 765.74, -80.70, -9.5%) is leading the downside moves in the mega cap space, dropping below its 50-day moving average (841.99).

Meta Platforms (META 477.70, -24.24, -4.8%) and Broadcom (AVGO 1203.71, -55.70, -4.4%) are both down more than 4.0% on no news.

Feds Financial Stability Report: Persistent inflation/tigher policy biggest risk

Fed’s Semi-Annual Financial Stability Report for April 2024

Persistent inflation, tighter monetary policy remain most cited potential risk to the financial system
‘Policy uncertainty,’ including escalating geopolitical tensions and upcoming US elections, cited by 60% of respondents as potential financial stability risk
Commercial real estate and banking sector stress less frequently cited as stability risk than in Fed’s fall 2023 survey
Nearly two-thirds of respondents mentioned policy uncertainty as a risk, significantly higher than in the October report
Cyberattacks, US-China tensions, Middle East conflicts also listed as risks, while nonbanks and Ukraine-Russia war have dropped off risk list
Leverage at hedge funds reached highest level since data collection began
Concerns over uninsured deposits and other factors continued to generate funding pressures for a subset of banks
1,804 of more than 9,000 eligible institutions tapped the Bank Term Funding Program; 95% of those had assets of less than $10 bln

The Federal Reserve’s Financial Stability Report is a semi-annual publication that assesses and details the stability of the financial system in the United States. The key elements of this report include:

Risk Analysis: It identifies and analyzes potential risks to financial stability, which could include issues like asset price volatility, borrowing by businesses and households, leverage within the financial sector, and funding risks.
Current Assessment: The report provides an assessment of the current financial system conditions, noting any vulnerabilities that might pose risks to stability.
Potential Shocks: It evaluates the system’s susceptibility to shocks from domestic and international sources, such as economic downturns, geopolitical tensions, and major policy changes.
Regulatory and Policy Developments: The report also discusses the impact of regulatory and legislative changes on financial stability, including new rules or modifications to existing regulations.
Economic Outlook: Although primarily focused on stability, the report often includes insights into the broader economic environment, including aspects like inflation rates, employment, and economic growth, which all influence financial stability.
Stress Testing and Scenarios: The report might include results from stress tests conducted on banks to assess their resilience in adverse economic scenarios.

Chicago Fed Pres. Goolsbee: Progress on US inflation has stalled

Chicago Fed Pres. Goolsbee speaking

Progress on US inflation has stalled.
Makes sense to wait to get more clarity before moving on rates
Feds current restrictive monetary policy is appropriate
Proper Fed policy going forward, will depend on the data.
Still helpful for return to improvement on inflation in months ahead
These more space for progress on services inflation from labor supply increases.
Need to determine if a strong GDP, jobs numbers are a sign of overheating that is driving up inflation.
Not all data suggests labor market overheating.
We have done great unemployment mandate, but we have not succeeded on the inflation mandate.
If you hold at this level of restrictiveness for too long, you will have to start thinking about the impact on jobs.
The policy trade-offs are harder this year.
The real Federal Funds rate is historically quite high
We will get inflation to 2% over a reasonable period of time.
if you start to see rising inflation globally, that suggests it’s driven by supply shocks or other things.
The puzzle on housing inflation is why official data is so different from market rents data.
Asked about a possible rate hike if needed, Goolsbee says “don’t think anything is not on the table”
It is not productive to speculate on conditions for raising or cutting rates.
There are some measures in the economy that historically don’t pretend well including rise in delinquencies
Level of delinquencies however doesn’t look that different to pre-Covid
I believe banks have adequate capital
We don’t want to be late on policy, we are forward-looking.
There is nothing about elections or the stock market in the Fed’s mandate

GOP Rep. Gosar backs push to oust Speaker Johnson

Rep. Paul Gosar joins Rep. Marjorie Taylor Greene in effort to remove Speaker Mike Johnson for prioritizing military over border security, sparking rare vote of no confidence.

The votes are building for the ousting of House Speaker Mike Johnson.

Rep. Paul Gosar (R-Ariz.) announced his co-sponsorship of Rep. Marjorie Taylor Greene’s (R-Ga.) resolution to remove Speaker Mike Johnson (R-La.) from his position.
Gosar, a member of the conservative House Freedom Caucus, expressed his support shortly after the House passed a foreign aid package without border security measures, which was supported by Democrats.
In his statement, Gosar criticized the lack of attention to border security and accused the current Speaker of prioritizing the interests of what he described as warmongers and the military industrial complex over national interests.
Gosar is the third Republican to support the resolution, following Rep. Thomas Massie (R-Ky.) who endorsed it earlier.

Fed’s Bostic: The economy is slowing down but slowing down slowly

Comments from the Atlanta Fed President

Wage growth is happening faster than the inflation rate
I’m grateful of the progress we’ve made on inflation and grateful the economy continues to grow
If inflation stalls out, we won’t have any option but to respond
I’d have to be open to increasing rates if inflation stalls out or goes in the other direction
Getting inflation under control is very important

Bank of Canada’s Macklem: Inflation is continuing to become less broad-based

Canadian inflation is moving in the right direction
At first glance, federal budget does not really change fiscal track since the Nov 2023 fall economic statement
Budget contains spending measures and new taxes; federal government’s commitment to stick to fiscal guard rails is helpful
Reiterates bank will be looking for evidence that the recent downward momentum in inflation is sustained
Canadian inflation is continuing to become less broad-based; things are moving in the right direction
Overall we see downside risks to the inflation outlook are lower than they were
There are some signs of stress in household finance, mostly in non-mortgage holders; delinquencies have moved up but they are not at alarming levels
Geopolitical tensions are a source of deep concern in the international community
If there is a spike in oil prices that is something we’ll have to take into account

Commodities

Gold set for fifth straight weekly gain as Middle East tensions loom

Gold price trades close to $2,400 amid worsening geopolitical tensions.
The US Dollar’s upside stalls as investors see other central banks postponing rate cut plans.
US bond yields are down despite the Fed maintaining a hawkish stance.

Gold faces pressure to recapture new all-time highs around $2,430 in Friday’s early New York session. The precious metal still holds some intraday gains, supported by safe-haven flows after worsening Middle East tensions. On Friday, Israel launched a retaliatory attack against Iran targeting the area around the city of Isfahan, Reuters reports. Iran has largely downplayed the attack by saying that their air defence has destroyed three drones. Signs of no further retaliation from Iran and what appears to be a limited airstrike have eased initial fears in markets, prompting Gold to pare gains.

Gold on pace to close at a record level today

Price is up 2.37% this week

The price of gold is on pace to close at a new record level today. A. How close level is $2832.30 on Monday, April 15. The low this week was on Monday at $2324.42. The point today at $2417.89 was the highest price for the week. The high intraday price was reached last Friday at $2431.78.

For the trading week the price is currently up around 2.37%.

Silver falls after early gains from $29, near-term outlook remains firm

Silver price retreats from day’s high amid no signs of retaliation from Iran after limited airstrike from Israel.
Fed’s hawkish guidance fails to prompt US bond yields.
Fed Williams is comfortable with more rate hikes if inflation remains persistent.

Silver falls back while attempting to recapture crucial resistance of $29.00 in Friday’s European session. The white metal surrenders early gains, prompted by reports from the Middle East that Iran’s air defence destroyed three drones by the Israeli army. Israel has not yet confirmed that they made those attacks in retaliation to an airstrike by Iran on their state.

Crude oil futures settle at $82.22

Up $0.12 on the day

The price of crude oil settled at $82.22. That’s up $0.12 or 0.14%.

The high price extended all the way up to $85.64 soon after the Israeli strike on Iran. Low price was at $81.13.

The high price for the week reached $86.18. The low price was at $81.06. Last week’s closing level was at $85.66. So at current levels the price is down -3.99% on the week. The high price for April (and for 2024) reached $87.67 on April 12. That was the highest level going back to October 23, 2023.

Baker Hughes oil rig count 511 vs 506 last week

The weekly Baker Hughes rig count for the current week

The weekly Baker Hughes rig count data shows:

Oil rigs vs 511 vs 506 last week
Natural Gas rigs 106 vs 109 last week
Total rigs 619 vs 617 last week

Copper in “the foothills of what will be its Everest” — Goldman Sachs

That’s quite a line

Goldman’s paper called ‘copper is the new oil’ is one of the most well-read research papers of the decade. The thesis is well known as copper grades are declining and there have been zero new projects approved this decade. In addition, the green transition (plus possibly AI) will require large amounts of copper and there’s a setup for a structural deficit that will be very hard to solve without much higher prices.

The same analysts with the ‘copper is the new oil’ moniker dropped another great line today saying, prices are only in “the foothills of what will be its Everest.”

That was in Santiago where the copper world is meeting this week at the annual Cesco Week symposium. Prices are currently at a 22-week high but Goldman sees prices rising more than 50% from here, to $15,000 per ton or about $6.50/lb.

In a separate report, here is what Citi had to say:

Funds have driven copper up to ~$9,500/t (+~20% since late November), on early signs of global reflation and in anticipation of physical deficits. Pure-play copper equities, which are even more forward-looking, have moved up to a price of $10.5k-12.5k/t copper into perpetuity, suggesting that there is further room for forward-looking investors to take the commodity price higher. Indeed, pure-play equity-implied copper prices are consistent with our view that we have entered the second secular copper bull market this century. Likely LME withdrawals of Russian metal and modest deficits should support prices around current levels over the next 3 months. We still see a path up to $15k/t by 2026 in our bull-case scenario.

EU News

European indices close the week with mixed results

Mixed results for the week

The major European indices are more mixed today and this week.

For the day:

German DAX, -0.56%
France CAC, point changed
UK’s FTSE 100 +0.24%
Spain’s Ibex -0.33%
Italy’s FTSE MIB +0.12%

For the trading week:

German DAX, -1.08%
France CAC,+0.14%
UK FTSE 100, -1.25%
Spain’s Ibex, +0.41%
Italy’s FTSE MIB, +0.47%

UK March retail sales 0.0% vs +0.3% m/m expected

Latest data released by ONS – 19 April 2024

Prior 0.0%; revised to +0.1%
Retail sales +0.8% vs +1.0% y/y expected
Prior -0.4%; revised to -0.3%
Retail sales (ex autos, fuel) -0.3% vs +0.3% m/m expected
Prior +0.2%; revised to +0.3%
Retail sales (ex autos, fuel) +0.4% vs +0.9% y/y expected
Prior -0.5%; revised to -0.4%

Germany March PPI +0.2% vs +0.1% m/m expected

Latest data released by Destatis – 19 April 2024
Prior -0.4%

If you strip out energy prices, producer prices were actually up 0.3% on the month in March. Looking at the breakdown, the price for intermediate goods were up 0.1%, consumer goods up 0.6%, and capital goods up 0.2%

ECB Pres. Lagarde: if inflation criteria is met it will be appropriate cut rates

ECB Pres. Lagarde is speaking

If inflation criteria met, it would be appropriate to reduce the current level of monetary policy restriction
At the same time, the governing Council is not pre-committing to a particular Redpath (ok…)
Surveys point to a gradual recovery over the course of the year.
The disinflation process is expected to continue.
Risks to the inflation outlet are two-sided.

BOE Ramsden: There are likely to be bumps in the disinflation process

BOE Deputy Gov. Ramsden speaking

There are likely to be bumps in the disinflation process from one month to the next.
Over the last few months, I have become more confident in the evidence that risks to persistence and domestic inflation pressures are receding.
Balance of domestic risks to the outlook for UK inflation is now tilted to the downside.
Balance of domestic risk to the outlook for UK inflation relative to the February MPR forecasts, is now tilted to the downside.
This leaves the UK as less of a outliner and more of a laggard in terms of recent inflation performance.
Scenario where inflation stays close to the 2% target over the whole forecast. At least as likely
We can be confident headline CPI inflation will fall sharply in April, to close to the 2% target
UK labor market has clearly continued to loosen
We will do what makes sense in terms of our mandate when asked about Outlook for Fed rates.
We will take into account Forex implications for inflation
Markets are entitled to take their position, UK curve has moved up in recent weeks and months, perhaps because market more worried about UK inflation persistence.
Some of the fundamentals in terms of US growth dynamics are quite different from UK’s

IMF: Soft landing for European economies is in reach, but not assured

IMF speaking on European economy

The IMF European regional report is out and says:

Soft landing for European economies is in reach but not assured
High-debt European economies should consolidate fiscal policy faster than currently envisaged
Monetary policy in advanced Europe needs to match unfolding conditions, easing neither too fast nor too slow
Central banks in the rest of Europe will need to maintain tight policy for longer to fully reel in inflation
Trying to fix competitiveness problems through a subsidy race with trading partners will do more harm than good

Germany reportedly to raise economic growth forecast for the year

It’s just a mild revision higher though

Reuters is reporting on this, citing a source familiar with the matter. The German government is set to raise its growth forecast for the economy this year to 0.3%, up from 0.2% previously. As for 2025, they see the economy growing by 1.0%.

On the inflation front, the government expects inflation at 2.4% this year. And that is down from the previous forecast of 2.8%.

Asia-Pacific-World News

IMF’s Georgieva: Need to finish the job on inflation

IMF Georgieva recaps the meetings this week

IMF meetings have been taking place this week and IMF Georgieva is speaking. She says:

Central bankers need to finish the job with inflation
Agees on the two rebel fiscal policy buffers, revive medium-term growth prospects
we need to address the challenges of rising debt, which is particularly severe in some countries
IMF reforms to debt restructuring process should make it smoother and speedier.

IMFs Japan Mission Chief: Weak yens impact on Japans economic growth is net positive

The IMFs Japan MIssion Chief says:

Weak yen’s impact on Japan’s economic growth is net positive
Bank of Japan will likely have room to raise interest rates further, though future tightening must be gradual and data-dependent
When asked if recent yen moves justify foreign exchange intervention by Japanese authorities, IMF’s Japan mission chief says she firmly believes G7 nations, including Japan, are committed to flexible FX regimes

BOJ to raise rates again later this year – Reuters poll

But there is no clear consensus on when that rate hike might come though

The poll shows that no economists are anticipating a rate hike before the end of June. But 21 of 61 economists do see that rates could rise during Q3 this year. Meanwhile, 17 of 55 economists forecast that rates will be raised during Q4 instead. The median forecast sees the upper end of the overnight call rate at 0.25% in Q4 and staying there until late 2025.

Of a smaller sample size of 36 economists who provided a specific forecast on when the BOJ might move, 19% are seeing a move in July. But October is the favourite, with roughly 36% expecting a move then. Meanwhile, 31% are seeing the BOJ move in “2025 or later”.

Japan March core CPI 2.6% y/y vs. 2.6% expected

The latest consumer price index from Japan

Japan March headline CPI 2.7% vs. 2.8% prior
The prior report was 2.8% vs 2.2% expected
Ex fresh food and energy 2.9% vs +3.0% expected
Excluding food vs 2.5% prior
Headline CPI m/m +0.3 vs 0.0% prior
Excluding food m/m +0.2% vs +0.2% prior

Nikkei gives back all of yesterday’s gains in a 1.3% opening decline

Not a good start

Today’s decline is 1.3% at the open, erasing the modest gain from yesterday and falling to the lowest since Feb 13.

We’re also now well-below the 1990 highs. In the big picture this will be viewed as a healthy dip after a strong Q1 but it may all hinge on falling US inflation.

Cryptocurrency News

SEC doubles down on TRON’s Justin Sun lawsuit dismissing claims over jurisdiction

The SEC says it has jurisdiction to bring Justin Sun to court as he traveled extensively to the US.
Sun asked to dismiss the suit, arguing that the SEC was targeting actions taken outside the US.
The SEC alleges that TRX and BTT tokens were promoted, offered and sold to US-based consumers and investors.

The US Securities and Exchange Commission (SEC) has amended its lawsuit against TRON founder Justin Sun, after its first filing in March. The financial regulator dismissed claims over jurisdiction and alleged that Sun sold TRX and BTT tokens to consumers and investors in the United States.

XRP fails to break past $0.50, posting 20% weekly losses

XRP trades range-bound below $0.50 for a sixth consecutive day, accumulating 20% losses in the last seven days.
Ripple is expected to file its response to the SEC’s remedies-related opening brief by April 22.
Ripple CEO Brad Garlinghouse commented on future plans and infrastructure growth in a Fox Business interview.

Ripple (XRP) remains stuck below $0.50 after a weeklong attempt to break past this stick resistance. XRPLedger’s native token has traded sideways for the past six days, broadly ignoring the big swings seen in the main crypto assets, as traders remain focused on the developments surrounding the legal battle between the payment firm and the US Securities and Exchange Commission (SEC).

Next week, Ripple is set to file its response to the SEC’s remedies-related opening brief, which argued for punitive penalties. On Thursday, Ripple CEO Brad Garlinghouse talked about the firm’s plans to bridge traditional finance to cryptocurrency.

Dogwifhat price pumps 5% ahead of possible Coinbase effect

Dogwifhat price is up 5%, standing among top gainers in the meme coin sector as BTC hope restores.
Coinbase has announced plans to list WIF for perpetual futures trading starting April 25.
Altcoins experience a quick price pop after they are listed on the big US exchange Coinbase.

Dogwifhat (WIF) price recorded an uptick on Thursday, going as far as to outperform its peers in the meme coins space. Second only to Bonk Inu (BONK), WIF token’s show of strength was not just influenced by Bitcoin (BTC) price reclaiming above $63,000.

ImmutableX extends recovery despite $69 million IMX token unlock

ImmutableX unlocked 34.19 million IMX tokens worth over $69 million early on Friday.
IMX circulating supply increased over 2% following the unlock.
The Layer 2 blockchain token’s price added nearly 3% to its value on April 19.

ImmutableX (IMX) price climbs nearly 3% on Friday despite its token unlock, finding some support at the $1.80 region and extending the 7% gain from the previous day. The project, which ranks among the top 15 Ethereum Layer 2 solutions by market capitalization, unlocked 34.19 million IMX tokens on Friday for ecosystem and project development and private sales.

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Round up of today’s market news

ByBilals Tech