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22/03/24 Briefing

Moving markets today: Asia markets rise with Wall Street; Apple dips 4.1 per cent, Chinese yuan hits four-month low; All eyes on UK retail sales and US Fed chair Jerome Powell’s speech

US stocks surged to new record levels once again, driven by growing confidence among investors in the Federal Reserve’s plans for interest rate cuts this year. Across Asia, stocks were poised for weekly gains, with Japan’s Nikkei index hitting a historic high. However, tech giant Apple experienced a 4.1 per cent decline in its stock value following a lawsuit from the U.S. Department of Justice. The social media platform Reddit made a strong debut on the New York Stock Exchange, witnessing a remarkable 48 per cent increase in its share price. Meanwhile, the Chinese yuan weakened to its lowest level in four months, while Japan’s inflation rate accelerated at its fastest pace in four months. As the week drew to a close, financial markets awaited key updates on UK consumer data and a speech by Federal Reserve Chair Jerome Powell scheduled for 1400 GMT. Here are five key takeaways for your day.

Japan’s inflation surges at fastest rate in four months

Japan saw an increase in core inflation in February, marking the fastest rise in four months, as the impact of subsidies on gas and electricity diminished. Official statistics released on Friday showed that the core consumer price index, excluding volatile fresh food prices, rose by 2.8% annually in February, compared to a 2 per cent increase in January, the FT reported.

However, a more closely monitored inflation gauge, which excludes both food and energy prices, continued its sixth consecutive month of slowdown. Known as the “core core” index, it rose by 3.2 per cent, decelerating from the previous month’s 3.5 per cent. This presents a challenge for the Bank of Japan, especially after it raised interest rates for the first time in 17 years.

UK consumers turn positive about their finances: GfK

In March, the mood among British consumers stayed consistent, as revealed by a survey conducted by GfK. However, there was a notable change in households’ perceptions regarding their financial prospects, marking the first optimistic shift in over two years. The GfK consumer confidence index remained at -21, matching the February figures and slightly lower than the anticipated -19 according to economists surveyed by Reuters. Encouragingly, GfK’s assessment of households’ expectations for their personal finances improved from 0 in February to +2, Reuters reported.

Market movers: overnight developments unveiled as you slept

Micron Technology saw its stock surge by more than 14 per cent, reaching an all-time high, driven by unexpectedly strong quarterly profits and a third-quarter revenue forecast that exceeded expectations. Similarly, Nvidia’s shares rose by over 1 per cent, contributing to a 2.3 per cent rally in the Philadelphia Semiconductor index. Goldman Sachs led the gains in the Dow and the bank sector, closing up by 4.4 per cent, while the S&P 500 bank sector added 1.7 per cent.

However, Apple experienced a decline of 4.1 per cent after facing a lawsuit from the U.S. Department of Justice, marking the first major antitrust action against the company by the Biden administration, alleging monopolization in smartphone markets.

Despite missing sales and profit expectations for its recent quarter, FedEx raised its full-year earnings guidance, resulting in a 12 per cent increase in its shares during after-hours trading on Thursday.

The debut of social media platform Reddit on the New York Stock Exchange ended with a 48 per cent increase in its share price, indicating renewed investor enthusiasm for IPOs of promising yet financially unprofitable companies. The company’s shares opened at $47, above its IPO price of $34, and closed at $50.44.

What’s coming up

All eyes are on the UK retail sales figures for February, which is expected to fall 0.3 per cent in February. Meanwhile, in the United States, market focus shifts to a speech expected from Federal Reserve Chairman Jerome Powell at 1400 GMT.

The Dow Jones Industrial Average saw a rise of 0.68 per cent, reaching 39,781.37 points, while the S&P 500 and Nasdaq Composite also experienced gains, albeit more modest ones, increasing by 0.32 per cent and 0.20 per cent respectively.

Over in Asia, Japan’s Nikkei 225 and Taiwan’s weighted index surged to hit new record highs, with both markets set for substantial weekly gains. South Korea’s KOSPI index also reached its highest point in two years. However, stocks in China and Hong Kong faced declines, impacted by the yuan’s depreciation against the dollar. This led to notable drops in indices like the CSI300 and Hang Seng.

In commodity markets, Brent crude and U.S. crude both saw slight decreases in prices, while spot gold experienced a decline after reaching a peak earlier in the week.

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