Global Economic Daily - 21/03/2024
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Closing Commentary
Quote of the Day: Most people have the will to win, few have the will to prepare to win. – Bobby Knight
Equities: Stocks had a very strong day on Wednesday. The three major averages rallied to hit all-time closing records Wednesday after the Federal Reserve held rates at a 23-year high and maintained expectations for three cuts before the end of 2024. The Dow Jones Industrial Average rallied 401.37 points to finish at 39,512.13, while the S&P 500 gained 46.11 points to close at 5,224.62 and punched above the 5,200 level for the first time ever. The Nasdaq 100 jumped 207.91 points to settle at 18,240.11. The Fed left rates unchanged but said that it plans to cut three times before the end of the year, reaffirming its previous forecast from December. That said, the central bank indicated that it needs greater evidence that inflation is easing before it starts taking its foot off the brakes. Prior to the meeting, some investors had feared that a recent spate of hot inflation reports would potentially result in even fewer cuts than markets anticipated. TECHNICAL OUTLOOK - The Dow and S&P are above the 14, 21 day moving average.
Crude Oil: Oil prices fell on Wednesday as the U.S. Federal Reserve held interest rate steady and demand concerns continue to weigh. On Wednesday, the Federal Reserve kept interest rates in the 5.25% to 5.50% range, but policymakers indicated they still expect to reduce them by three-quarters of a percentage point by the end of 2024. The Fed's rate decision was within expectations and the impact on oil markets was limited, said Andrew Lidow, president of Lidow Oil Associates. The U.S. Energy Information Administration said crude oil stockpiles fell unexpectedly last week as exports rose and refiners continued to increase activity. The draw in crude oil inventories was due to higher refinery runs and strong crude oil exports. The American Petroleum Institute also reported crude oil and gasoline stockpiles fell last week, while distillate inventories rose. Elsewhere, Ukrainian attacks on Russian refining assets have helped propel crude prices higher as market participants assessed the impact on crude and fuel supply balances. TECHNICAL OUTLOOK – The Crude is above the 14, 21 day moving average.
Metals: Gold and silver prices are higher and near daily highs in U.S. trading Wednesday, following a Federal Reserve monetary policy statement that the precious metals bulls saw as price-friendly. The just-concluded Federal Open Market Committee monetary policy meeting saw the Federal Reserve keep its monetary policy unchanged, as expected. The key Fed Funds interest rate range was kept steady at 5.25% to 5.50%. The FOMC statement seemingly walked a neutral line on policy: not too hawkish and not too dovish. The statement said the U.S. economy is growing and inflation has eased but is still elevated. The statement said no rate cuts will occur until the Fed has more confidence inflation has been tamed. Still, the statement said the Fed sees three interest rat cuts this year. Judging by the reaction of the gold market, traders deemed the FOMC statement as not being too hawkish, and that the Fed appears willing to tolerate slightly higher inflation for longer. Now the marketplace awaits the afternoon press conference from Fed Chairman Jerome Powell. Traders will closely scrutinize Powell’s remarks for clues on the future path and timing of Fed monetary policy. Technically, April gold futures bulls have the solid overall near-term technical advantage. A four-week-old uptrend is in place on the daily bar chart. A bullish pennant pattern has formed on the daily bar chart, but needs to see an upside breakout very soon to complete the formation. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,203.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,100.00. May silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the December high of $26.575. The next downside price objective for the bears is closing prices below solid support at $24.00. TECHNICAL OUTLOOK – Gold and silver are above the 14, 21 day moving average.
DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
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