SignalPlus Macro Analysis (20240328): US core inflation fell slightly
Markets remained calm at the end of the month, with Europe continuing its dovish tone, Spanish CPI data weak, and European Central Bank officials proudly claiming that despite rising wages, the central bank could still start cutting interest rates very soon. At the same time, the Riksbank also expressed a dovish stance, further exacerbating interest rate cut expectations. The market expects the European Central Bank to cut interest rates by nearly 95 basis points (four times) before the end of the year, while the Federal Reserves rate cut expectations are about 76 basis points.
In the United States, Governor Waller spoke after the market closed, continuing his hawkish tone in February. He made statements such as The economic situation does not give us a reason to significantly cut interest rates and Based on recent data, reduce the number of interest rate cuts or postpone them. are all appropriate, however, U.S. Treasury yields were barely affected as traders began to prepare for the long weekend, and end-of-quarter rebalancing funds are likely to dominate price action tomorrow.
Interestingly, the United States will release the PCE price index when the market is closed on Friday. Wall Street predicts that core PCE will slow down to below 0.3% month-on-month. This will be a good change after core inflation rebounded slightly at the beginning of the year, but investors are enjoying the holiday. , and looking forward to stellar first-quarter returns, the market is unlikely to pay much attention to this number.
Yesterday, 91% of the SPX index components rose, with all major sectors showing gains. With Nvidia showing some signs of weakness, the AI craze has begun to spread to hardware stocks, with the Philadelphia Semiconductor Index outperforming the SPX at a pace not seen since the dot-com bubble. In addition, looking back on the past year, the U.S. stock market led the global stock market with a Sharpe ratio of nearly 3x. Considering the huge market capitalization of its constituent stocks, this is an incredible result and highlights the huge wealth effect produced in this bull market.
On the cryptocurrency front, there was some price action at the open in New York, with BTC prices surging to nearly $72,000 before reversing to a low of $68,500, while Coinbase shares were also volatile at the open (from 267 -- in a matter of minutes). > $278 --> $256), the fluctuation may be due to the U.S. District Judge’s ruling that the SEC’s lawsuit against Coinbase can proceed. Coinbase is accused of engaging in unregistered securities sales. Its stock price fell 2.5% yesterday and brought a drop to the price of BTC. pressure, but ETF net inflows are still positive, with an increase of US$418 million in funds yesterday.
Finally, in an interview with Fox Business, Larry Fink’s bluff continued, saying that even if the SEC considers ETH to be a security, there is still a chance of approving an ETH ETF. Wouldnt it be nice if Blackrock, the SEC and the CFTC could sit down together and work things out?
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