Morning Brew January 26 2024

Good Morning

Yesterdays Data and the ECB outlook moved the rate expectation a little. This is in my view the largest market driver at the moment.

Interest Rate Traders see 142 BPS in rate cuts by the Federal Reserve this year up from 133 yesterday and the ECB is seen to cut 141 BPS form 128 yesterday.

The US Economy grew much stronger than expected but at the same time, the orders for durable goods came lower. Initially it looked like traders were focusing on the GDP number but then is turned and the forward looking Durable goods caused dovish sentiment to come to the forefront.

Indexes ended higher yesterday but gave up ground overnight. The close levels were S&P 500 +0.53%, Nasdaq +0.18%, Dow +0.64%, now we are back to where we were yesterday morning with the US 500 at 4873, the US 30 37907 the US tech 100 NAS and the GER40 16842.

Tesla fell 12% yesterday and erased 80 billion in value on the lower sales forecast and falls to the 9^th position of the largest companies, American Airlines gained 10%, IBM 9.5% while Boeing fell 5.7%.

The FTC  ordered Amazon, Microsoft, OpenAI, Anthropic and Alphabet companies to provide information about recent multi-billion-dollar investments and partnerships, this is a development worth watching.

US and EU yields fall but Euro lost more than the Dollar, the USD Index gains to 103.59 as the EURUSD drops to 1.0830, GBPUSD to 1.2695 and USDJPY 147.80.

Gold and Silver are 2021 and 22.90 and Oil 76.83 n the US. Bitcoin is hovering around the 40k.

All eyes will be on the PCE data at 14:30 today, the expectations are:

Core PCE Price Index Monthly:  0.2%
Core PCE Price Index Annually 3%
PCE Price Index Monthly:  0.2%
PCE Price Index Annually: 2.6%

Heading into next week, the earing season continues, we will have the next Fed meeting and key economic data including EU inflation and the Nonfarm Payroll will be released.

Have a great day!

Erik