4/1 (Sat) morning market trends (compared to the previous day)
- NY Dow: $33,274 +1.2%
- Nasdaq: $12,221 +1.7%
- Nikkei Stock Average: ¥28,041 +0.9%
- USD/JPY: 132.7 +0.11%
- US dollar index: 102.3 +0.2%
- 10 year US Treasury yield: 3.47 -2.1% annual yield
- Gold Futures: $1,986 -0.5%
- Bitcoin: $28,519 +1.8%
- Ethereum: $1,827 +2%
Today’s NY Dow continued to rise and closed at +415 dollars. The Nasdaq and S&P 500 also continued to rise on indicators of continued slowdown in inflation.
Last night, the U.S. Department of Commerce released the Personal Consumption Expenditures (PCE) Price Index (deflator) for February, which saw its lowest rate of increase in one year and five months. Growth was +5.0% y/y, slowing from +5.4% in January and below expectations of +5.1%. It was +0.3% m/m, below January’s +0.6% and expectations of +0.4%.
The core deflator PCE price index, which excludes highly volatile food and energy, increased by +4.6% y/y, slowing from +4.7% in the previous month. On a month-on-month basis, the rate of increase slowed to 0.3% from +0.6% in January. The expected value was +0.4%.
In February, US personal consumption expenditures (PCE) increased only slightly. The +0.2% increase from the previous month was below the expected +0.3% increase, and slowed significantly from the +1.8% increase in January. On the other hand, the price for January was revised upward from +1.8% month-on-month to +2.0% month-on-month, marking the largest increase since March 2021.
Personal Consumption Expenditure (PCE) is an index that shows the price trend of personal consumption announced by the US Department of Commerce at the end of each month. US personal consumption expenditure, which accounts for nearly 70% of GDP, is drawing attention as a leading indicator of GDP. The PCE core deflator, which divides the nominal PCE by the real PCE, is known as the price index that the US FRB places the most importance on.
January’s PCE deflator posted its biggest rise since August 2022, but expectations of further rate hikes appear to have receded after February’s weaker-than-expected readings. In the interest rate futures market, the next FOMC on May 3rd and June 14th is expected to stop rate hikes, exceeding the probability of 50%. Many analysts expect the 0.25% rate hike at the next FOMC meeting to be the last rate hike in this cycle.
University of Michigan Indicators
The March University of Michigan Consumer Confidence Index was revised downward from the preliminary estimate of 63.4 to 62.0. Expected to be 63.2. In addition, it slowed down from 67.0 in February.
“Consumer sentiment fell for the first time in four months,” said Joan Shu, director of consumer research, in a statement. Meanwhile, consumer sentiment was already in a downturn before the Silicon Valley Bank collapse, and the impact of this month’s banking turmoil was limited, he said.
Inflation expectations for the year ahead were also revised downward to 3.6% from the preliminary estimate of 3.8%, the lowest level since April 2021. Inflation expectations five years ahead were 2.9%, similar to February.
Economic indicators (Japan time)
- April 3, 23:00 (Monday): US March ISM Manufacturing Index
- Wednesday, April 5, 21:15: U.S. March ADP Employment Statistics
- April 12, 21:30 (Wednesday): US March Consumer Price Index (CPI)
- Thursday, April 13, 3:00 PM: Federal Open Market Committee (FOMC) Minutes
- Friday, April 14, 21:30: U.S. March Retail Sales
- April 14, 23:00 (Friday): April University of Michigan Consumer Confidence Index, preliminary figures
connection: The monthly trading volume of Ethereum futures is at the highest level since May last year as bitcoin struggles in the latest high price range
U.S. IT/tech stocks rose sharply, partly due to the improvement in investors’ risk tolerance due to receding expectations for interest rate hikes. Compared to the previous day for individual stocks, NVIDIA +1.4%, c3.ai +21.50%, Big Bear.ai +23.2%, Tesla +6.2%, Microsoft +1.5%, Alphabet +2.8%, Amazon +1.2%, Apple +1.5% , Meta +1.9%, Disney +2%.
C3.ai, a California-based AI company listed on the New York Stock Exchange, was named one of the “Fastest Growing Companies of 2023” by British FT magazine on the 28th. The company’s main business is the provision of enterprise artificial intelligence software and industry-specific applications. It has multiple government and commercial customers, including 3M, Shell, and the U.S. Air Force.
In addition, AI (artificial intelligence)-related companies such as Big Bear.ai, NVIDIA, and Arista Networks (ANET) were also bought at high prices.
On the other hand, the Italian data protection authority announced on the 31st that it had launched an investigation into ChatGPT for possible data collection breaches and blocked access to the service.
There are growing concerns about the rapid growth and large-scale spread of AI technology. An online petition was launched this week demanding a six-month hiatus from all research institutes to develop a next-generation AI system more powerful than the latest version of GPT-4, and Tesla founder Elon has already・It is said that more than 1,300 signatures have been gathered from prominent engineers, academics, researchers, including Mr. Musk and Mr. Steve Wozniak, co-founder of Apple.
connection: Earon Mask and AI researchers request a temporary suspension of next-generation AI model development
Cryptocurrency/Blockchain-related Stocks (Year-on-Year Change/Year-to-Week Change)
- Coinbase｜$67.5 (+5.3%/-0.4%)
- MicroStrategy | $292 (+4.69%/+13.9%)
- Riot Platforms | $9.9 (+9.3%/+15.8%)
Coinbase yesterday announced the appointment of Lucas Matheson as its “Country Director” for its expansion in Canada. He will oversee Coinbase’s Canadian efforts, having worked at Shopify and other Canadian financial giants.
MicroStrategy announced this week that it has purchased an additional $150 million worth of cryptocurrency Bitcoin (BTC). It also reported that it paid off a $205 million worth of Bitcoin-backed loan at Silvergate Bank by repaying $160 million at a 22% discount.
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connection: Top 10 cryptocurrency stocks in Japan and the US
US dollar = 132.7 yen, up 0.11% from the previous day. The US PCE deflator, which was announced last night in the US time, slowed more than expected, so expectations for future interest rate hikes receded, leading to dollar selling.
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