European stocks open higher after FTSE notches another record close
European stocks opened slightly higher Wednesday, with the benchmark Stoxx 600 index up 0.2% by 8:50 a.m. London time.
The U.K.’s FTSE 100 climbed 0.4% after recording another record close Tuesday, while France’s CAC 40 was 0.1% lower, and Germany’s DAX up 0.2%.
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Sensetime shares jump more than 20% after reported AI announcement
Shares of Chinese artificial intelligence company Sensetime Group spiked more than 20%, outperforming the Hang Seng Index’s 1.04% gain.
While it was not immediately clear what prompted the rally, the company held a tech day on Tuesday during which it planned to announce “the latest breakthroughs in SenseTime’s cutting-edge AI technology.”
Chinese media reported that Sensetime unveiled its SenseNova 5.0 AI model. Chairman Xu Li reportedly claimed SenseNova was better than OpenAI’s GPT 4 in the majority of general usage scenarios, especially in enterprise applications and Chinese-language usage scenes.
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Risk of yen intervention after Bank of Japan meeting this Friday: BofA
The Japanese yen could push past the 155 level against the U.S. dollar after the Bank of Japan’s monetary policy meeting on Friday, according to a Bank of America note.
BofA analyst Shusuke Yamada wrote that the BOJ has already communicated that yen weakness could impact policy through its impact on inflation, but he thinks that a repeat of this communication would not be enough to support the yen.
Yamada said for the BOJ to support the yen, “it should acknowledge that policy has been too accommodative, that the next hike is as imminent as in June, and that the terminal rate would be higher than priced by the market.”
However, he said that this is unlikely to be the case, which will push the yen beyond the 155 level and likely trigger an intervention, adding that if Japan does not intervene around that level, “the market may buy and bring USD/JPY to 160 quickly and test [its] resolve at that level.”
— Lim Hui Jie
Grayscale unveils new filings for ether ETFs
Crypto investment firm Grayscale took the next step in the push for an ether exchange-traded fund on Tuesday.
The firm filed a Form S-3 with the U.S. Securities and Exchange Commission for the Grayscale Ethereum Trust (ETHE), part of the process of converting that fund into an ETF.
Grayscale also filed to create a Grayscale Ethereum Mini Trust, which would presumably have a lower management fee than the ETHE.
While the SEC gave a green light to bitcoin ETFs earlier this year, the regulator has not yet approved an ethereum ETF. Industry experts expect an update sometime next month, though many are skeptical of an approval.
Grayscale was a key part of the push to get a bitcoin ETF approved, including suing the SEC. The Grayscale Bitcoin Trust (GBTC) is the biggest bitcoin ETF, though it has suffered outflows since its conversion in January.
— Jesse Pound
Capital Economics sees Fed rate cuts possibly starting in September
“[G]rowth is strong; inflation on the Fed’s preferred measure hasn’t slowed as much as expected; and officials have probably been spooked by the concerns about the stickiness of inflation,” wrote Capital Economics’ group chief economist Neil Shearing on Monday. “It makes sense that the Fed will push back rate cuts to later this year: Absent an economic shock, there’s no rush to cut.”
The thinking at London-based Capital Economics is that it makes more sense for the European Central Bank and the Bank of England to loosen monetary policy before the U.S. “Growth in these economies is weaker, inflation is closer to target, and having chased the Fed up there’s a risk that policy will become too tight as more households and firms refinance fixed rate debt.”
Neither central bank has to wait for the Fed to go first, Shearing said. Both have moved independently of the Fed in prior economic cycles.
Markets are too pessimistic about interest rate policy in the back half of 2024 and in 2025, Capital Economics said. “Developments on the inflation front have muddied the waters, but we still expect the Fed, ECB and Bank of England to cut interest rates by more than markets are currently pricing in over the next 18 months. And we think the ECB and BoE will move in June — even if the Fed now waits until September to make its first move.”
—Scott Schnipper
S&P 500 Financials outperforming S&P 500 by 3 percentage points in 2024
Don’t look now, but the S&P 500 Financials are outperforming the broad market, as measured by the S&P 500, by 9.3% to 6.3% so far in 2024. They are even beating the S&P 500 Tech Index’s 6.1% gain this year.
“Banks Remain Strong Globally,” trumpeted Tuesday morning’s note to clients from Strategas Securities’ technical and macro research team led by Chris Verrone. “Among the more impressive responses to the market’s nascent oversold condition has come from the Financials, with the sector again pushing to fresh relative performance highs,” Strategas said. “Some 25 Russell 1000 Financial constituents found their way onto [Monday’s] 3-month relative high list, with the Capital Markets, Banks, and Consumer Finance names leading the push.”
The 25 financial stocks at relative highs ranged from Bank of America with a market value of almost $300 billion, all the way down to SLM Corp., at about $5 billion.
Relative strength in financial stocks is not confined to the U.S. either. “Globally, the European and Japanese Banks have also retained their leadership advantage as the broader market has consolidated/corrected,” Strategas said. ADRs in British bank Barclays, for example, are ahead 22.5% in 2024, topping even the 16.6% rally in S&P 500 Communication Services stocks.
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S&P 500 Financials vs S&P 500 in 2024.
See the stocks making big after-hours moves
Here are some of the names posting sizable moves in after-hours trading:
- Tesla — The electric vehicle maker rallied 8.2% despite missing expectations on both lines. Tesla shared its new initiative around offering an affordable model.
- Mattel — The toymaker jumped 2.4% after reporting narrower losses per share than Wall Street expected.
- Visa — The finance name rose 2.6% following its better-than-expected earnings report.
See the full list here.
— Alex Harring
S&P 500 futures are higher
S&P 500 futures traded up shortly after 6 p.m. ET.
Futures tied to the benchmark index added 0.2%, while Nasdaq 100 futures rose 0.4%.
Dow futures added just 7 points, trading marginally above the flatline.
— Alex Harring
Source link: https://www.cnbc.com/2024/04/23/stock-market-today-live-updates.html