Weekly market update - 4th of April 2024
Written and accurate as at: Apr 04, 2024 Current Stats & Facts
Central Bank Activities: A Global Overview
Investors had their hands full last week as they analysed central bankers' statements and their implications for interest rates. A consistent theme across global central banks, including the Federal Reserve (Fed), Reserve Bank of Australia (RBA), and Bank of England (BoE), was a message of policy easing "soon, but not yet." The Swiss National Bank's surprise 25 basis point cut further reinforced this sentiment, fueling hopes for a new global easing cycle.
Market Responses and Key Indices
U.S. markets ended the week positively, with the S&P 500 and the Nasdaq recording gains of 2.3% and 2.9%, respectively. This upward trajectory was influenced by the Federal Open Market Committee's (FOMC) projection of three rate hikes in 2024 and Chairman Powell's relaxed stance on recent inflation reports and labour market conditions.
The Australian market also responded positively, rising by 1.3% following the RBA's rate decision and a surprisingly strong employment report. In contrast, the Bank of Japan's decision to raise its overnight lending rate - the first hike in 17 years - was earlier than market participants expected. Still, it didn't deter the buoyant market mood, evidenced by a 5.6% surge in the Nikkei 225 over the week.
Jobs and Housing on the Upswing
The RBA's decision to keep the cash rate at 4.35% in Australia was accompanied by concerns over elevated services inflation. Unemployment rates reported a drop of 3.7% in February, indicating robust job market conditions. Over in the U.S., existing home sales exceeded expectations with a notable increase. Elsewhere, the U.K.'s inflation rate also declined to 3.4%, whilst New Zealand's slight GDP contraction in Q.4, 2023, indicated a technical recession in the latter half of the year.
Major Share Price Movements
Our local stock market reacted well to the Reserve Bank of Australia's (RBA) latest announcements. Investors approve of the RBA's cautious yet optimistic tone. Australian companies Paladin Energy and Webjet saw their values rise. However, not all companies enjoyed the same success, as Audinate Group, Polynovo, and Strike Energy saw a decline.