Stock Trading News has been a mixed bag in March – the airline sector has taken a hit while big tech stocks continue to thrive.
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Stock Trading News – Wall Street Majors Lose Ground
Wall Street’s major indexes lost a little ground on Monday to open a holiday-shortened week, as investors braced for ‘make-or-break’ inflation data due later in the week.
The declines were somewhat mitigated on the Nasdaq by sector gains.
Stock Trading News: NVIDIA & AMD
The Philadelphia Semiconductor Index rose 0.5%, while Micron Technology shares were up 9.0% to hit a record high and reached another new peak.
Nvidia stock also climbed 1.6%.
Chinese officials are looking to phase out the use of US microprocessors from Intel and AMD in its government computers and servers, according to a report this week.
Stocks Thrive: Navigating Tech Glitches & Power Investments
Intel shares fell 1.2% in the wake of the news, while AMD shares dipped then climbed back up again to end the session up 1.4%.
The S&P 500 and the Dow Jones Industrial Average both closed on a high last Friday, with their best percentage gains of the year so far.
Stock Trading News: Positive news
This comes at a month full of positive news since Fed boss Jay Powell reaffirmed the plans to cut rates three times this year, following up on Fed comments from Chicago Fed President Austan Goolsbee and Fed Governor Lisa Cook.
Such bullishness has pushed up the market outlook on a Fed Fund rate cut in June from 50% to 69% in the past week, according to CME FedWatch tool.
With the quarter coming to an end, the focus this week will turn to the February report on the PCE price index, the Fed’s favourite inflation gauge, on Friday.
Stock Trading News: Dow Jones, S&P Drops
A strong PCE print could derail the current complacency bias toward early rate cuts. Rounding off the March quarter trading week are the final fourth-quarter GDP and a March consumer confidence index.
Still, by the middle of the day, the Dow, the S&P 500 and the Nasdaq were all showing drops, with communication services leading the losers among the sectors, and just the energy sector showing gains.
Stock Trading News: Boeing & Walt Disney In Focus
Boeing and Walt Disney also perked up after the communications giant announced a major management change, and the entertainment giant’s stock was given a ‘buy’ rating by Barclays.
A group of crypto and blockchain-related stocks also rose steeply amid signs that this year’s drop in the value of bitcoin and other cryptocurrencies had halted, if not reversed.
The trading day’s showing was a mixed bag of downs and ups across the New York Stock Exchange and the Nasdaq.
Stock Trading News: United Airlines Drops
Shares in United Airlines plunged about 6% on Monday in the wake of the US Federal Aviation Administration’s (FAA) decision to increase its oversight of the transport firm in response to several recent incidents concerning safety.
The FAA announced last week it was set to conduct a comprehensive review to check the airline’s compliance with its safety standards, following a spate of safety incidents at the transport giant over the past two weeks.
Stock Trading News: Airline industry to take a hit
Furthermore, it was found that a laminate section of the exterior panel was missing on a United flight into Oregon on 15 March, and the FAA was conducting an investigation.
Shortly before the Boeing 737 MAX incident, a United Airlines Boeing 737 overshot the runway at Houston Airport.
Another United Boeing 777-200 en route to Japan blew its tyre a few minutes after departure from San Francisco (and was subsequently diverted to Los Angeles, where it landed safely).
Stock Trading News: United in trouble
Moreover, United said last week that it would receive far fewer aircraft from Boeing this year, noting that the lack of clarity over the certification schedule for the MAX 10 model had played a part.
On Monday morning, United’s shares fell to $43.87.
Stock Trading News: Intel Shares Drop 2%
Intel and Advanced Micro Devices (AMD) each fell more than 2% on Monday in response to reports that China would limit the use of their semiconductor goods and servers on government computers, which could cost billions to US corporations.
Stock Trading News: Chip Industry at War
China plans to phase out US-made chips from the companies as well as replace Microsoft’s Windows operating system and foreign database software with domestic alternatives, according to the Financial Times.
The development is part of Beijing’s long-term goal to reduce its dependence on global technology corporations and push forward its domestic semiconductor sector, as U Street-approved technology exports, such as advanced-chip shipments, continue to hurt China.
Stock Trading News: Chipmaker Revenue
Revenue for the chipmakers could be affected by the development.
Last year, Intel reported that China was its largest market in 2023, accounting for 27% of revenue. AMD said that about 15% of its sales came from China.
The Microsoft stock price was down about 0.5% in premarket trading but the company hasn’t disclosed the revenue from China.
Stock Trading News: China and AMD
In a research note published in late July, Bernstein analyst Stacy Rasgon estimated that if the Chinese government were to stop buying its CPUs completely, Intel and AMD revenues would each decline by a low single-digit percentage, with a possible loss of up to $1.5 billion for Intel and a few hundred million dollars for AMD.
Neither Intel, AMD nor Microsoft had yet commented in response to the latest announcement, according to Reuters.
Pre-market trading data put the market value losses for the chip companies at around $11 billion.
Stock Trading News: China Processing Units
Meanwhile, in late December, China’s industry ministry published two lists of central processing units and operating systems as well as centralised databases as ‘safe and reliable’, all of whose goods are produced domestically.
Furthermore, the escalating tensions in the rivalry between China and the US have affected other tech giants such as Apple, which saw reports last December of Chinese agencies and state-backed companies encouraging employees not to use iPhones for work.
Stock Trading News: Russian Stock Swap Scheme
On Monday, Russian brokers launched a swap scheme for the holding and selling of frozen foreign securities by Russian retail investors to foreign investors whose assets are similarly locked up in Russia.
Moscow is presenting the initiative as a way to mobilise assets of Russian and foreign investors that have been frozen because of Western sanctions and Russian counter-measures following the start of the Ukraine conflict more than two years ago.
The finance ministry chose the brokerage based in Voronezh, southern Russia, Investitsionnaya Palata (Investment Chamber) to run this programme.
On the day of the announcement, the brokerage published the proposed purchase prices of these securities and opened the floor for retail investors to submit their bids until 8 May.
The process involves pooling together the Russian-held foreign securities into lots that will be put out to bid for international buyers between 3 June and 5 July with payments through special ‘type-C’ accounts in Russia which are currently frozen.
Stock Trading News: Russian Stock Scheme Binding until September
The brokerage added that the offers from private Russian investors would become binding until 1 September 2024 while sellers would be banned from managing the foreign securities offered for sale during period.
Sellers will own the securities offered for sale.
The sanctions mean that more than 3.5 million Russians with foreign assets worth close to 1.5 trillion roubles ($16.2 billion) in total are now allowed to sell foreign currency instruments up to a value of 100,000 roubles under this scheme.
The central bank now says that around 80% of the Russian investors affected by the sanctions have foreign-currency assets under this 100,000-rouble limit.
At the same time, some Russian issuers fear that international investors might be reluctant to participate because of sanctions against Russia’s National Settlement Depository (NSD).
Earlier this month, the British Foreign, Commonwealth 53 Development Office issued this statement: the designation of a broker to facilitate this scheme does not change or alter the current sanctions regime.
And it only reflects that President Vladimir Putin continues with increasingly desperate attempts to circumvent the impact of the West’s major economic sanctions.
So this is a geopolitical fight with economic consequences – not exactly a marriage built for survival.
Europe’s stocks retreated slightly at the start of a shortened holiday-truncated week, as the market digested last week’s robust advance from the broadly dovish shifts from major central banks.
Stock Trading News: Euro Stock Focus
The pan-European STOXX 600 index inched down 0.1% on Monday to rest within striking distance of all-time highs hit last week.
Travel and leisure sector gains offset losses from personal and household goods companies.
The Federal Reserve reaffirmed last week that it will lower interest rates by at least 75 basis points by year end.
The Bank of England (BoE) signaled that conditions were unfolding to allow for rate cuts. The Swiss National Bank (SNB) made emergency rate cuts of 25 basis points.
Market participants currently expect the Fed, the ECB and the BoE to each reduce rates by 75 basis points by the end of the year, by 25 basis points at a time.
Goldman Sachs has raised its 2024 year-end forecast for the STOXX 600 from 510 to 540, to account for the expected acceleration in the pace of economic growth and tighter monetary policy by the world’s central banks.
Stock Trading News: STOXX 600 Up 6%
The STOXX 600 is up 6.4% so far this quarter, closing at levels last seen in the final quarter of 2023: largely because investors bet that the most egregious monetary tightening phase was over.
Shares of Direct Line services fell 13% to 197.35 pence after Ageas said it would not launch any more bids for the UK insurer, which had previously been twice rejected.
A plan by the Swedish real estate firm SBB to buy back debt at a 60% discount increased the group’s stock by 11.3%, as large amounts of debt that have often troubled investors have to be written off.
European markets will be closed on the coming Friday and Monday due to the holidays of Good Friday and Easter.
On Monday this week, for example, Goldman Sachs raised its target for the STOXX 600 index, a metric of performance for European stocks more broadly, to 540 (from 510) at the end of 2024.
The firm projects a near 6% increase from the index’s closing value on Friday.
Signals from the world’s biggest central banks, such as the US Federal Reserve and the European Central Bank, are promising that rate cuts might well be in the offing.
Improving indicators suggest that the euro zone’s business activity is on the verge of growth and overperformed expectations, and the US remains steady.
Stock Trading News: Good Trends
Goldman Sachs has upped its ‘Fair Value’ target on the STOXX 600 in February due to improving valuations that could see the index rise by about 2.5% annually.
Peytavin commented that the stock market might still be in the ‘optimism phase’, the last phase of the equity cycle, seen by rising multiples when earnings growth starts to slow.
The firm noted that over the past six months, 12% of the gains in European equities have resulted from valuation expansions rather than profit growth.
The crucial ratio is currently 15 times its one-year forward price-to-earnings ratio, compared with 26 times for the STOXX 600 index, as measured by LSEG data.
That means it could soon be cheaper to buy the entire UK market.
But Goldman Sachs also said: As is often the case, oil prices face a dual risk. Rising oil prices by their nature would defer interest rate cuts but achieve the holy grail of a ‘good’ shock to EPS growth.
Moreover, Goldman Sachs raised its 2024 target for the UK’s FTSE 100 index to 8,200 from 7,900, another reflection of its bullish stance towards market progression.
