Market Update Week 12
Over the last week we have seen strong growth in the US equity markets, which contributed
to a strengthening dollar, while crypto fumbled.
Major indices
US stocks had a strong week, with all three major indices closing higher after the Federal
Reserve announced its commitment to three rate cuts this year on Wednesday. The S&P 500
posted its biggest weekly gain in the year, reaching new highs and closing at 5234.18. The
Dow Jones Industrial Average also edged to record highs on Thursday, and even with a slip
on Friday, it closed a strong week at 39475.91. The Nasdaq 100 had its strongest week since
mid-January, the index up to 18339.44, breaking the record for the highest close.
Macroeconomic factors
During last week we have seen decisions that highlighted the differences between the Fed’s
interest rate policy in comparison to other central banks. In the monthly FOMC meeting, the
Fed announced to keep the overnight rates unchanged at around 5.25-5.5%. This was not
surprising as inflation reports released last week came in higher than expected. The Fed,
however, reassured investors that recent price growth does not indicate a deviation from
the trend of easing price pressures, which provides the economic background for three
possible rate cuts in 2024.
Meanwhile, there was a notable change in global monetary policy, as the Swiss National
Bank and many central banks in developing countries have implemented rate cuts or
indicated their intention to do so. The European Central Bank is expected to follow suit
around June. In Asia, the Bank of Japan has implemented its first increase in interest rates in
over 17 years, ending the era of negative rates. With an indication of other rate hikes in
2024, BOJ signalled its commitment to an accommodative monetary policy.
Currencies
The strong week in the US equity markets and the surprising Swiss rate cut both contributed
to the dollar closing its second week of consecutive gains. The greenback rose against all G-
10 currencies, with the USDJPY and the USDGBP standing at 151.4 and 0.79, respectively.
The euro also weakened in comparison to the dollar, with the EURUSD currently standing at
1.08.
Crypto
Last week was hectic for bitcoin and crypto overall, filled with price surges and recovery
attempts. After recording new highs almost every day for two weeks, bitcoin started falling
on the 14th, and it did not manage to recover over the weekend. The crypto asset reached
its lowest point in over two weeks on Tuesday at a price range of just under 61000 but
recorded slight gains over the week to settle around 65650. Other alternative coins have
declined even more than BTC, such as the second largest crypto asset Ethereum, which is
down by over 10% in a week.
Commodities
In the realm of commodities, gold prices reached record highs of over 2200 dollars per
ounce on Thursday, and the slight slip on Friday was not enough to erase gains for the week.
Other metals, such as silver, platinum, and palladium all finished the week in red partly due
to the strengthening dollar. Crude oil prices reached a five-month high on Tuesday helped by
worries over tightening global supplies, but the commodity slipped during the last three
trading sessions, settling at a 0.1 gain for the week.
Flow Traders Investment Competition
After a week where the AEX and S&P 500 shattered their previous all-time highs it's time to reflect on how B&R Beurs their investment groups have performed! Floryn Vrouwen has entered the competitions' top 10 with a M2 return of 11.27%. Furthermore, last years' competition winners Mercury, who were off to a poor start, are finally climbing the ranking with a 3.75% in just one week! However, for Primus things are looking worse, after newly entering the top 5 they lost 20 spots in only one week...
