InsightMarch 27, 2024

Weekly Market Report: March 27, 2024

USA

Stocks moved higher for the week, pushing the S&P 500 Index and the Nasdaq Composite to new records, as investors welcomed news that Federal Reserve policymakers were still anticipating three interest rate cuts later in the year. Communication services led the gains along with technology shares. A late rise helped artificial intelligence chipmaker NVIDIA reach a record high on Friday and lift the company’s market capitalization near USD 2.4 trillion. Reports that Apple might partner with Google parent Alphabet in offering generative artificial intelligence tools also boosted sentiment. Health care and real estate shares lagged.

The week’s main driver of sentiment appeared to be the Fed’s policy meeting concluding on Wednesday. As was widely anticipated, policymakers left the federal funds rate unchanged.

Europe

STOXX Europe 600 Index ended near a record high, climbing 1.03%. Dovish signals from central banks boosted risk-on sentiment. Germany’s DAX gained 1.58%, while Italy’s FTSE MIB advanced 1.30%. France’s CAC 40 Index, however, fell 0.17%. The UK’s FTSE 100 surged 2.70%.

European government bond yields declined on a weak purchasing managers’ survey for Germany and a reduction in Swiss interest rates. In the UK, bond yields fell after the Bank of England (BoE) struck a dovish note at its policy meeting.

Japan

Japanese equities gained over the week primarily on yen weakness resulting from the Bank of Japan’s unexpectedly hawkish tilt (it raised interest rates earlier than had been priced in by most market participants and for the first time since 2007). The Nikkei 225 Index rose 5.6%, and the broader TOPIX Index was up 5.3%, with both indexes rallying to record-high levels. Sentiment was also supported by expectations that the U.S. Federal Reserve will cut interest rates in 2024, given the state of inflationary conditions and the economy’s growth prospects.

China

Chinese equities retreated as concerns about the property sector slump offset optimism about better-than-expected economic data. The Shanghai Composite Index declined 0.22%, while the blue chip CSI 300 gave up 0.70%. In Hong Kong, the benchmark Hang Seng Index lost 1.32%.

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