DAILY MARKET NEWS - 28-02-2024

Ariff Azraei

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U.S. consumers were shown to have lost some confidence in February as they worried more about jobs and the election, even with slower inflation. The Conference Board’s reported index fell to 106.7, missing forecasts. Durable goods orders have also dropped, but business equipment spending has only slightly increased, suggesting a slower manufacturing recovery. Consumers expected lower inflation but still planned to buy less, especially houses, after the mortgage rate re-entered a 7% premium.


The S&P 500 and Nasdaq edged higher, although Dow Jones ticked lower, with retail stocks supported by Macy's and Lowe's earnings, while tech stocks saw a modest rebound along with strong Zoom earnings. Asian markets mostly tracked sideways, and Apple shifted its focus from electric cars to AI. In contrast, Norwegian Cruise Line capitalised on strong demand for short Caribbean trips, boosting its stocks by 18%.


Gold prices pulled back after swiping Monday's high as lower Treasury yields balanced a stronger dollar. Traders are watching inflation data and Fed commentary this week for clues on future rate cuts. While analysts remain positive about gold's long-term outlook, they expect the rise in prices to be delayed and less notable as risk-on equity takes place.


Oil prices initially rose on Tuesday after speculation of extended OPEC+ production cuts, but fell sideways in early Asian trade. This pullback is potentially driven by higher U.S. crude inventories and Biden reassurance on the Ramadan ceasefire between Israel and Palestine. Exxon and Chevron are in discussions about acquiring Hess Corp.’s stake in the Guyana oil operations, which could affect Chevron's planned acquisition of Hess, where production is expected to increase to 1.2 million bpd by 2027.


The Japanese yen strengthened against the dollar after exceeding inflation forecasts, even when the dollar index was rising slowly. This suggests the BoJ might tighten policy sooner, while the Fed's path remains uncertain due to strong US economic data. Meanwhile, the euro rose as the European Central Bank signalled a cautious approach to easing, and the kiwi weakened after another rate pause from the Reserve Bank of New Zealand.