Weekly market update - 22nd of March 2024
Written and accurate as at: Mar 22, 2024 Current Stats & Facts
This week, the financial world presented a complex picture of heightened valuation concerns and persistent inflation pressures. In the U.S., the S&P 500 experienced its second week of decline, a trend not seen since last October. This shift in investor sentiment reflects a cautious response to inflation data that, while meeting expectations, is easing slower than some had hoped. The interplay between the U.S. Consumer Price Index (CPI) data and slightly higher-than-expected Producer Price Index (PPI) figures shows the current delicate balance of the economic landscape.
Federal Reserve Policies and Market Expectations
Investors had already adjusted their expectations for the Federal Reserve's future actions, making the market less reactive to the latest numbers. Yet, new information about inflation, job markets, or overall economic growth still holds the power to change market trends quickly. A close eye will be kept on the Federal Reserve's meeting in June, as there are predictions for a possible reduction in interest rates. Overall, the current view is that the economy remains strong, with inflation gradually becoming less of an issue.
Commodities and Australian Market Impacts
The iron ore market has been facing tough times, with a significant price drop since January. This is due to more stockpiles in China and financial pressures on steel mills. This decline has correspondingly affected Australia's stock market and, as pointed out by The Australian Treasurer, may mean less money than expected in the budget, which could limit how much support Australians receive for living costs.
Economic News in Brief
In the U.S., annual cost rises were slightly lower than expected. In contrast, producer prices rose more than expected, mainly due to higher energy and food expenses. These trends may lead the Federal Reserve to exercise caution, although there's still talk of reducing interest rates later in the year.
Central Banks' Positions
The Reserve Bank of Australia will meet soon; however, policies are not expected to change. This prediction comes as the signs of a slowing economy are being weighed up against the ongoing issue of inflation. In the U.S., the Federal Reserve is also meeting, but it's unlikely they will cut interest rates just yet.
Stock Highlights
Strike: rose significantly due to strong production and new gas delivery deals.
Bellevue Gold did better than expected, showing solid operations.
Sandfire Resources got a boost from news of copper shortages in China.
Arcadium lithium dropped sharply due to environmental issues
Chalice Mining faced a loss due to heavy exploration spending
Core Lithium's value dropped after reporting lower-than-expected results and leadership changes
QBE Insurance remained stable despite unexpected data detailing cost rises in the U.S.
James Hardie and Westpac Bank faced challenges due to the current economy.c climate