The world’s equity markets rallied as technology and AI-related stocks got back on their horse and put in a strong performance. The S&P 500 hit a new high supported by an increased inflow into the U.S. equity market. The Fed held rates steady and teased the idea of possibly making 3 rate cuts in 2024. The yields on U.S. fixed-income securities declined during the week, as the optimism surrounding the Fed’s announcement weighed on bond performance. After a record breaking wage hike agreement in Japan, the country’s central bank has decided to move away from its ultra accommodative monetary policy and raised interest rates for the first time in almost a decade. And finally, in Russia, the Moscow terrorist attack made international headlines and the Kremlin has pursued the perpetrators aggressively. Reports also claim that the Russian intelligence agency had received news of this attack weeks ago.

Global Equity
  • The MSCI All Country World Index went up during the week. U.S. equities also had a stellar week as the S&P 500 rose to a new record high, after adding $4 trillion to U.S. equity values. Performance was strongly aided by optimism over AI-related stocks as well.
  • The Federal Reserve kept the rate steady at 5.5% and suggested that they still plan to cut the rates this year. In economic news, the Manufacturing PMI rose to 52.5 as the output of the manufacturing sector grew. The U.S. Services PMI fell to a three-month low of 51.7 due to losses in the service sector, while the consumer confidence index was revised upward to 79.4.
  • In a week of economic announcements, two forecasting institutes cut their 2024 growth forecast for the German economy, citing weak consumption and high-interest rates. On the other hand, France’s economy is expected to eke out growth in the second quarter after stalling in the first, as higher consumer spending helps offset the drag from interest rates. 
  • The People’s Bank of China has kept its lending rate unchanged at 2.5% to tackle the headwinds from the property sector and boost the economy. President Xi met with many CEOs in Beijiing during the week trying to get them to continue investing in the economy and provided an explanation on how the sanctions against China will affect the business environment. 
  • The Bank of Japan raised its key short-term interest rate to 0.1%, its first hike in 8 years, as inflation crossed the target of 2%. This announcement came after some of Japan’s biggest companies agreed to raise wages by 5.28% for 2024, the heftiest pay hikes in 33 years.
U.S. Equity
  • The S&P 500 ended the week on a very positive note. The technology and AI-based stocks gained as the demand for chips and semiconductors increased. The CPI print for February and a jump in producer prices left investors wondering if the Federal Reserve might wait longer than expected to cut interest rates.  
  • The U.S. GDP grew at a 3.4 % annualized rate in the fourth quarter, which beat estimates of 3.2%, owing to higher consumer spending and exports.
  • Consumer confidence in the United States remained stable in March, as worries shifted from a recession to the impending presidential election.
  • The U.S. Securities and Exchange Commission is seeking fines and penalties totaling $2 billion in its case against Ripple Labs over sales of the cryptocurrency XRP. The blockchain company’s sale of XRP worth $728.9 million to hedge funds and other sophisticated buyers amounted to unlawful sales of unregistered securities.
  • Visa and Mastercard reached an estimated $30 billion settlement to limit credit and debit card fees for merchants, with some savings likely to be passed on to consumers.
  • The U.S. government has awarded contracts to buy 2.8 million barrels of oil for the government’s emergency reserve for more than $81 a barrel, $2 above the target purchase price.  
  • Reddit options launch sparked a wave of bullish bets, which some analysts said contributed to Reddit’s share price surge following its strong market debut last week. 
  • Adam Neumann, the co-founder of office-sharing giant WeWork, has offered to buy back the company for over $500 million, a company which was once valued at $47 billion.
  • Boeing CEO Dave Calhoun will step down by year-end in a broad management shakeup brought on by the planemaker’s sprawling safety crisis exacerbated by a January mid-air panel blowout on a 737 MAX plane.
U.S. Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index edged higher over the week. Bond yields slipped as the market factored in economic data and mixed comments from Fed officials.  
  • The U.S. GDP growth rate for Q4 2023 was revised higher to 3.4% from 3.2% in the second estimate, driven by consumer spending and non-residential business investments.  
  • The U.S. 10-year Treasury yield declined from 4.22% to 4.20% over the week, while the yield on the 2-year note dropped from 4.59% to 4.54%.    
  • The U.S. Dollar Index strengthened over the week as investors awaited key U.S. inflation data that could impact the interest rate outlook for 2024.
Sources

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