Top daily news
A powerful rise in US inflation US in March increased investor interest in today’s speech by Fed Chair Jerome Powell. Investors expect him to comment on the situation in some way. Refinitiv predicts a 25% increase in total profits for S&P 500 companies in Q1 2021 compared to Q1 2020. At the same time, the growth of the S&P 500 index itself over the past 12 months was much higher and amounted to 50%. Quarterly reporting can affect the dynamics of stock markets.
Тhe US dollar index fell for the second day in a row оn Tuesday and closed below the psychological level of 92 points for the first time in 4 weeks. The strong growth of inflation in March by 0.6% (compared to February) was the main reason for this, which is the highest monthly increase since August 2012. In annual terms, US inflation in March amounted to 2.6%, which is much higher than both the Fed rate +0.25% and the US 10 Year Treasury Yield +1.63%. Earlier, investors feared and expected acceleration in consumer price growth amid 2 large-scale economic stimulus plans totaling $4 trillion that were proposed by Joe Biden’s administration. The recent statements of the Fed representatives that it is necessary to maintain a soft monetary policy for a long time affected negatively the dollar. Today Jerome Powell will make a speech in which he is expected to comment, in any way, on the surge in the US inflation in March. The Beige Book Economic Review will be published in the US today.
Stock Market news
|Dow Jones Index||-0.2%|
|US Dollar Index||-0.16%|
On Tuesday, there was no single trend on the US stock market. The Nasdaq and S&P 500 rallied and updated all-time highs, while the Dow dropped. The US authorities suspended the use of the Covid-19 vaccine created by Johnson&Johnson. Against this backdrop, its shares and shares of Procter&Gamble, another health products manufacturer, fell 1.3%. No large companies’ quarterly reports were published in the US yesterday. But today, the reporting of the largest American banks, such as JPMorgan, Wells Fargo, Goldman Sachs, BlackRock and others, are expected. Refinitiv predicts a +25% increase in total profits for S&P 500 companies in Q1 2021 compared to Q1 2020. At the same time, the growth of the S&P 500 index itself over the past 12 months was much higher and amounted to +50%. Note that cryptocurrencies have risen noticeably in recent days before today’s IPO of the largest US cryptocurrency exchange Coinbase. It is assumed that the price of its shares will be $250.
Commodity Market news
|Brent Crude Oil||+1.55%|
Today, world oil prices have been growing for the third day in a row. WTI is trading above the psychological level of $61 a barrel. The factors listed below contributed to the positive trend. OPEC raised its estimate of global oil demand by 70 thousand barrels per day (bpd) to 5.95 million bpd this year. The International Energy Agency (IEA) also raised its forecast for global demand in 2021 by 230 thousand bpd to 5.7 million bpd. It is believed that OPEC expresses the opinion of the oil producing countries, and the IEA expresses the opinion of the consumers. Therefore, their forecasts almost always differ from each other. According to the American Petroleum Institute, US oil reserves fell by 3.6 million barrels over the week. Investors are awaiting official stock data from the U.S. Energy Information Administration today.
Gold Market News
Gold rose in price on Tuesday amid a decline in the US dollar index. Since the beginning of March, it has been trading in a relatively narrow range of $1680-1750 per ounce. In general, the rise in the price of precious metals is constrained by investors’ expectations of an active recovery of the global economy. The IMF predicts global GDP growth of 6% this year and another 4.4% in 2022. Recall that the decline in 2020 was only 3.3%. Low global economic risks reduce the attractiveness of gold.