Tuesday Afternoon Market Recap
Tuesday Afternoon Market Recap:
U.S. equity markets finished lower.
Economic Indicators
- The S&P Global U.S. Preliminary Composite PMI for January rebounded to an eight-month high as business activity surged forward on the heels of slowing inflation.
Macro Commentary
- Retail earnings season unofficially kicked off to a disappointing start as retail giants Walmart (WMT) and Home Depot (HD) reported that discretionary purchases continued to decline as inflation remains a real roadblock to increased consumer spending.
- Investors are adjusting rate expectations as the latest forecasted peak rate is now sitting at around 5.30% in July, up almost a full 50 basis points since the recent low.
- Federal Reserve Bank of Richmond President Thomas Barkin reiterated the central bank should stick to smaller interest rate adjustments to better fine-tune monetary policy.
Within the S&P 500 Index, all the 11 sectors finished lower...
European equity markets finished lower.
Economic Indicators
- S&P Global’s preliminary Eurozone composite Purchasing Managers’ Index (“PMI”) data for February jumped to 52.3, higher than both the prior month and expectations, with the surge largely driven by better than expected services' data.
- German investor expectations for February showed continued improvement for the eurozone's largest economy, logging its fifth straight monthly increase amid lessening concerns over a recession.
Macro Commentary
- European Central Bank Governing Council member Olli Rehn said inflation growth remains high meaning it likely won’t reach an interest rate peak before this summer.
- Group of Seven finance ministers will meet on Thursday to discuss new actions to be taken against Russia in an attempt to force Moscow to end its invasion of Ukraine.
Asian equity markets finished mixed.
Economic Indicators
- Au Jibun Bank’s preliminary Japan composite PMI figures for February showed economic activity held steady with January, supported by the services sector.
Macro Commentary
- Minutes from the Reserve Bank of Australia’s February meeting showed that there was serious consideration for raising rates by 50 basis points, but that the consensus that inflation had peaked allowed the central bank to move forward with its 25-basis point rate hike.
- Tensions between China and Australia seem to be easing, as Chinese cotton buyers are among the first to be buying Australian product in the anticipation that the unofficial embargo on Australian exports would be lifted soon.
- India’s Power Ministry enacted an emergency rule that push coal-fired power plants to operate at full capacity during the summer to prevent widespread power outages.
- The People’s Bank of China left its benchmark lending 1- and 5-year Loan Prime Rates unchanged while adding $61 billion in liquidity to the financial system to support economic growth.
(Narratives written as of local market close.)
Asset Snapshot
What we're paying attention to this week...
U.S.
- Fed's Williams Speaks (Wednesday)
- G20 Finance Ministers and Central Bank Governors Meeting (Wednesday – Friday)
- Chicago Fed National Activity Index for January (Thursday)
- GDP for 4Q (Thursday)
- Fed’s Jefferson Speaks (Friday)
- Personal Consumption Expenditure Data for January (Friday)
Europe
- France – Business Climate Index for February (Wednesday)
- Germany – Ifo Business Climate Index for February (Wednesday)
- G20 Finance Ministers and Central Bank Governors Meeting (Wednesday – Friday)
- BOE's Mann Speaks (Thursday)
- Germany – Gfk Consumer Confidence Survey for March (Friday)
- France – Consumer Confidence Survey for February (Friday)
- BOE's Tenreyro Speaks (Friday)
Asia
- G20 Finance Ministers and Central Bank Governors Meeting (Wednesday – Friday)
- South Korea – PPI for January (Thursday)
- Bank of Korea Rate Policy Decision (Thursday)
- Japan – CPI for January (Friday)
(Day of week in parentheses.)
Have a great evening!