Thursday, February 29, 2024 4:29am
Today’s market action: Asia follows Wall Street’s selloff, Bitcoin surpasses $60,000, oil prices fall.Focus shifts to his PCE inflation data for the US
U.S. stock markets closed with modest losses as investors awaited important inflation reports that could shape expectations on the Federal Reserve’s interest rate decisions. Across Asian markets, trading remained sluggish or slightly down. Bitcoin has soared to $60,000 for the first time in more than two years, attracting the attention of investors. Focus will now turn to Thursday’s release of the Fed’s preferred inflation measure, the Core Personal Consumption Expenditures (PCE) Price Index, which is expected to further influence market sentiment. Here are five key takeaways from the day.
Bitcoin crosses $63,000 mark, hits new high above $69,000
Bitcoin soared to more than $63,000 overnight due to a surge in investment in a new U.S. Bitcoin exchange-traded fund (ETF). With an impressive 45% rally this month, the highest price since December 2020, Bitcoin is nearing its all-time high of $69,000. In morning trading in Asia, Bitcoin was steady at $61,650, while Ether also rose to $3,416, reflecting February’s massive 50% rally.
UK car production surges 21% in January: SMMT
In the UK, car production increased by 21% in January compared to a year earlier, marking the fifth consecutive month of growth. This increase was driven by strong demand and improving supply chain conditions. According to Reuters, the Automobile Industry and Trade Association reported that car production last month totaled 82,997 units, up from 68,575 units a year earlier. The potential impact of recent ship attacks in the Red Sea on Britain’s car manufacturing sector remains uncertain.
New York Fed’s Williams said more efforts were needed to reach the 2% inflation target.
New York Fed President John Williams said progress still needs to be made to meet the U.S. central bank’s 2% inflation target, but future data could make a rate cut this year more likely.
“While the economy has come a long way to achieve a better balance and reach the 2% inflation target, we are not there yet. Against the backdrop of a strong economy and labor market, we are committed to achieving price stability. I am fully committed to making a full recovery,” Williams said, Reuters reported.
what happens
Investors are watching closely to see whether the Fed chooses to cut interest rates starting in June. They are keeping an eye on the Personal Income and Expenditure report, scheduled for release Thursday, in hopes of shedding light on inflation trends that are crucial to the Fed’s decision-making. Also expected will be updates on U.S. personal income, personal spending, pending home sales, and weekly new unemployment claims.
Later in the session, prominent figures from the Federal Reserve Board, including Bostic, Goolsby and Mester, will speak to the public.
Across the pond, the Bank of England is set to release money supply and net personal lending data for January, with Halifax’s February house price survey ahead of the release of these figures.
Wall Street’s decline spreads to Asian markets
The Dow Jones Industrial Average fell 0.06% to close at 38,949.02 points, the S&P 500 fell 0.17% to settle at 5,069.76 points, and the Nasdaq Composite Index fell 0.55% to 15,947.74 points. UnitedHealth faced a steep 2.95% decline, impacting both the Dow and S&P 500, in the wake of news of the Justice Department’s antitrust investigation. Applied Materials, a major supplier of semiconductor equipment, fell 2.62% after receiving a subpoena from the U.S. Securities and Exchange Commission in February. Conversely, Beyond Meat soared 30.72% as it announced plans to raise prices and significantly cut costs to boost profit margins, resulting in a short squeeze in its heavily shorted stock.
In Asian markets, Japan’s Nikkei Stock Average fell 0.4% and the overall TOPIX fell 0.3% from its recent high at the beginning of the week. However, China’s Shanghai Shenzhen CSI 300 Index and Shanghai Composite Index recorded gains of 0.8% and 0.9%, respectively. Hong Kong’s Hang Seng index rose 0.2%, but gains were capped by fourth-quarter GDP data showing slightly weaker-than-expected growth. South Korea’s KOSPI fell 0.5% on profit-taking, especially in semiconductor manufacturing stocks, after posting solid gains in the previous session.
In commodity trading, oil prices fell, with Brent crude falling 0.1% to $83.60 and West Texas Intermediate dropping about 0.15% to $78.42. Gold rose, with precious metal prices rising to $2,036.35 per ounce. Meanwhile, the U.S. dollar index traded almost flat at 103.86.