Weekly News 2024/02/12-2024/02/16

 U.S. stocks closed lower on Friday, with the Dow Jones Industrial Average falling 145.13 points, or 0.37%, to 38627.99 points; the Nasdaq Composite Index falling 130.52 points, or 0.82%, to 15775.65 points; the S&P 500 Index falling 24.16 points, or 0.48%, to 5005.57 point. All three major U.S. stock indexes recorded losses this week, with the Dow falling 0.12% for the week, the Nasdaq falling 1.34%, and the S&P 500 falling 0.42%. At this point, all three major stock indexes ended their previous five consecutive weeks of rising trends. The U.S. PPI index in January exceeded expectations, and together with the CPI data, it confirmed that the Federal Reserve's work to combat inflation is not over yet, causing the market to further reduce its bets on an early interest rate cut by the Federal Reserve. A Fed official stressed that the Fed should wait for more data before cutting interest rates.

The U.S. Department of Labor reported on Friday that the U.S. producer price index (PPI) rose 0.3% month-on-month in January, higher than Dow Jones's forecast of 0.1%. Excluding food and energy prices, core PPI rose 0.5% month-on-month, also exceeding expectations. PPI data released on Friday showed that the Fed's fight against inflation is not over yet. The January PPI data could be another sign that inflation will not slow as quickly as expected to the Fed's 2% target.

Adam Turnquist, chief technical strategist at LPL Financial, said: “This is not all bad news. It makes market expectations and the Federal Reserve's monetary policy forecasts more consistent, which can reduce market volatility from the source. In addition, better-than-expected economic data has been Markets are repricing the drive for rate cuts, reducing the likelihood of a hard landing for the U.S. economy.”

 Apple (NASDAQ: AAPL) is stepping up efforts to develop more new artificial intelligence features, and the tech giant is nearing completion of a key new AI software tool for Apple system app developers. According to media reports, Apple has been developing this new tool since last year and regards it as the most critical part of the next major upgrade of Xcode, Apples flagship programming software. In addition to the Xcode technology section, Apple's next-generation iPhone and iPad software updates, namely iOS and iPadOS 18, will also include a series of new artificial intelligence features. It is reported that since last year, there have been continuous media reports that Apple will integrate AI technology into the iOS and macOS operating systems.

The global chip foundry giant TSMC's （NYSE: TSM）stock price has surged by more than 24% since 2024, and the strong rise seems difficult to stop in the short term. Recently, technology stock investors' belief in AI has once again set off a huge wave in global stock markets. Therefore, Nvidia's AI chips, which are in extremely strong demand - TSMC, the only chip OEM for A100/H100, are expected to re-enter the top ten most valuable listed companies in the world. That is, it ranks among the top ten listed companies in the world by market capitalization.

Microsoft（NASDAQ: MSFT）President Brad Smith said at an event in the German capital on February 15 that Microsoft will invest 3.2 billion euros in Germany over the next two years, focusing on the development of artificial intelligence. As the company's largest investment in Germany in the past 40 years, Microsoft will spend most of the money in 2024 and 2025 on building data centers and training artificial intelligence talents.

 Bitcoin (BTC) topped $52,000 this week for the first time in 26 months, but its stalled momentum could signal an “imminent” pullback before prices rise, Swissblock analysts said in a market update on Friday.

The largest cryptocurrency by market capitalization gained 10% over the week, outperforming the broader CoinDesk20 index (CD20) 8% gain and extending a sustained run that reached $38,500 in late January. Meanwhile, inflows into U.S. spot Bitcoin exchange-traded funds (ETFs) accelerated, with BlackRocks IBIT buying more Bitcoin this week. However, notes that the $52,000 area was a significant resistance level on the long-term chart that capped prices in September and December 2021 and now also poses a meaningful barrier to continued gains now. “Given the rapid rise of about 33% in the price over the past few weeks, a pullback appears imminent and necessary, suggesting the rebound is unsustainable,” Swissblock analysts wrote. The report adds that in addition to the short-term decline, the market looks set for higher prices, and as long as BTC holds support near $47,500, any upcoming correction could be a buying opportunity. “At this time, any pullback should be viewed as a potential buying opportunity,” the report said.

Institutional cryptocurrency exchange FalconX also noted that “exceptional” trading volumes underpinned an upward trend in early 2024, last seen in March 2023 during the regional banking crisis. “Historically, rising prices and declining volumes have been reliable indicators of false breakouts in cryptocurrencies,” FalconX analysts wrote on Friday. “The good news right now is that liquidity conditions surrounding the January rally remain generally strong.”

Bitcoin is likely heading towards a $57,500 price target, 10x Research analyst Markus Thielen said in an update on Friday, citing strong liquidity and increasing demand for Bitcoin futures.

 Gold was hard this week by U.S. CPI data and once fell below the $2,000 mark. The bearish sentiment was strong. Although Friday's data gave gold bulls a bit of comfort before the weekend and helped gold regain the 2,000 mark on Friday, gold still recorded a high of $2,000 this week. The weekly decline was the second consecutive weekly decline.

Gold rose slightly on Friday, but due to hot inflation data and the prospect of an early interest rate cut by the Federal Reserve, gold recorded a second consecutive weekly decline, falling 0.51% this week. Data showed that U.S. producer prices increased more than expected in January. A separate report on Tuesday showed U.S. consumer prices rose more than expected last month. The dollar index rose 0.19 this week and the benchmark 10-year Treasury yield expanded, making gold less attractive. Gold closed at $2,013.46 per ounce, up 0.46% on Friday. But it fell 0.51% on the week, fell for a second straight week after hot inflation data cooled prospects for an early interest rate cut from the Federal Reserve.

U.S. Commodity Futures Trading Commission (CFTC): In the week of February 13, the net long position of COMEX gold held by speculators decreased by 36,191 contracts to 46,400 contracts. Net short positions in COMEX silver increased by 4,848 contracts to 9,632 contracts.

Everett Millman, chief market analyst at Gainesville Coins, said that since the Federal Reserve is unlikely to cut interest rates in March, it may be difficult for gold prices to remain above $2,000. U.S. economic growth is quite strong, indicating rising inflation, which is a headwind for gold. Gold prices are expected to fall further to the $1,960 level.

 Brent crude prices are up more than 1% this week, while U.S. benchmark crude prices are up about 3%. On Friday, after weaker-than-expected U.S. retail sales data raised hopes that the Federal Reserve will soon start cutting interest rates in the coming months, geopolitical tensions in the Middle East offset the International Energy Agency's forecast Oil prices closed higher on forecasts of slowing demand. The contract of Brent crude oil closed $0.71/barrel, or 0.86%, to $82.87/barrel. The contract of U.S. crude oil closed $1.17/barrel, or 1.50%, to $79.22/barrel.

Hiroyuki Kikukawa, from Nissan Securities, said expectations of a U.S. interest rate cut would provide support on Thursday, but investors were adjusting their positions ahead of the U.S. long weekend. On February 19, the U.S. market will be closed for a public holiday. While keeping an eye on interest rate trends, investors continue to assess whether geopolitical risks in the Middle East will impact crude oil supply chains.

Analysts said the risk of expanding conflict in the Middle East could continue to affect crude oil prices. Vandana Hari, founder of Vanda Insights, expects the latest oil price rally driven by rising risk premiums in the Middle East to continue, especially heading into the weekend.

The contradiction between supply and demand supports oil prices. U.S. energy companies cut the number of operating oil and gas rigs for the second time in three weeks.

U.S. producer prices rose more than expected in January amid a sharp rise in service costs, potentially exacerbating inflation concerns. Still, the decline in retail sales has raised hopes that the Federal Reserve will soon begin cutting interest rates, which could support oil demand. The IEA said global oil demand growth is losing momentum and cut its growth forecast for 2024.

 This week, the U.S. CPI rose more than expected in January, causing the market to adjust its expectations for an interest rate cut by the Federal Reserve. U.S. bond yields rose, driving the U.S. dollar to a three-month high. The dollar held on to gains despite poor retail sales data. Affected by the rise in U.S. bond yields, the Japanese yen fell below the 150 yen mark against the U.S. dollar. The Japanese government's verbal intervention has not been effective. Japanese GDP data showed an economic recession, further suppressing the Japanese yen. UK CPI was flat in January, but the pound weakened as GDP data showed the economy shrank for a second consecutive quarter.

This week, the U.S. dollar performed strongly, inflation data was higher than expected, and the market adjusted expectations for an interest rate cut by the Federal Reserve, driving U.S. bond yields to rise, and the U.S. dollar hit new highs against the Japanese yen and the euro. The U.S. dollar index hit a three-month high, maintaining most of its gains despite a larger-than-expected drop in retail sales.

The euro fell 0.04% to $1.0769 and was on track for modest losses for the week, not far from the three-month low of $1.0695 hit earlier this week. Investors focused on speeches by ECB officials after ECB President Christine Lagarde reiterated her cautious stance on easing monetary policy.

Francesco Pesole, FX strategist at ING, said that some investors cant wait to join the consensus that the United States will weaken at some stage in 2024, which is why we believe that despite the recent strength of the US dollar, EUR/USD is not too far from the support bottom.

OnePro Special Analyst

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