MHMarkets：February 2, 2024 Economic Highlights

Date: February 2, 2024

Economic Highlights (GMT + 8)

21:30

USD Average Hourly Earnings m/m

USD Non-Farm Employment Change

USD Unemployment Rate

23:00

USD Revised UoM Consumer Sentiment

Market Overview:

Global Market Recap

On Thursday, the U.S. dollar index dropped by 0.4% to 103.06. EUR/USD rose by 53 pips to 1.0871, influenced by the Eurozone's expected slowdown in inflation to 2.8% in January, while the jobless rate remained steady at 6.4% in December, meeting expectations. GBP/USD increased by 55 pips to 1.2743, in line with the Bank of England's decision to maintain the key interest rate at 5.25%. USD/JPY declined by 52 pips to 146.42, and AUD/USD remained relatively stable at 0.6571. USD/CHF decreased by 35 pips to 0.8577, and USD/CAD slipped by 48 pips to 1.3385.

Bitcoin rebounded by 1% to reach the $43,000 level after two consecutive declines. U.S. stocks recovered from previous losses, with the Dow Jones Industrial Average closing at a record 38,519 (+0.15%). The S&P 500 gained 60 points (+1.25%) to 4,906, and the Nasdaq 100 increased by 207 points (+1.21%) to 17,344. Consumer discretionary, utilities, and real estate sectors led the market higher, while energy and financial sectors lagged behind.

Notable stock movements included Nvidia (NVDA) rebounding by 2.44% to close at a record $630.27, Merck (MRK) rising by 4.64%, and New York Community Bancorp (NYCB) further sinking by 11.13%. Boston Scientific (BSX) gained 2.47% after Citigroup raised its target price to $71.00, while Qualcomm (QCOM) fell by 4.98% following a Citigroup downgrade. In after-market hours, Meta Platforms (META) surged 15%, Amazon.com (AMZN) jumped 7%, and Apple (AAPL) slid 4%.

The U.S. 10-year Treasury yield fell by 10.3 basis points to a one-month low of 3.862%. In economic data, the ISM manufacturing purchasing managers index improved to 49.1 in January (vs 47.6 expected), while initial jobless claims rose to 224,000 (vs 218,000 expected). The U.S. official jobs report later in the day is expected to show a slowdown in non-farm payrolls to 175,000 in January, with the jobless rate staying at 3.7%.

European stocks closed lower, with the DAX 40 falling by 0.26%, the CAC 40 down 0.89%, and the FTSE 100 down 0.11%. U.S. WTI crude oil dropped by $1.89 (-2.49%) to $73.96 a barrel amid uncertain reports of a cease-fire agreement between Israel and Hamas. Gold prices remained little changed at $2,054 an ounce.

Market Highlights:

- Unexpected rise in Americans filing for unemployment benefits last week

- Bank of England's vote more hawkish than anticipated

- OPEC+ maintains unchanged oil production policy

- Anticipated ceasefire agreement between Hamas and Israel

- U.S. money market fund assets surpass $6 trillion for the first time

- Yi Gang emphasizes maximizing capital investment in the entire society

- Stamp tax on securities transactions to decrease by over 34% YoY in 2023

- Over 300 companies announce increased holdings and repurchases in a single night

Institutional Views:

1. Morgan Stanley:

- Morgan Stanley foresees a gradual interest rate cut by the Fed, aiming to sustain a lower inflation trend. They emphasize the U.S. economy's robust performance, allowing the Fed to exercise patience for a sustained decline in inflation. Expressing concern, they caution against faster rate cuts, as it may signal an unexpectedly swift economic slowdown. Anticipating a challenging 2024 for the U.S. stock market after a significant 2023 rise in the S&P 500, they expect a rise this year, supporting a strong economic outlook without signs of a slowdown.

2. Goldman Sachs:

- Goldman Sachs Asset Management's Global Macro Strategy Analyst, Gurpet Gill, reports a slowdown in Eurozone inflation, but the ECB awaits more evidence before considering rate cuts. Gill notes the ECB's reluctance to declare victory in the inflation struggle. If inflation continues to slow and geopolitical disruptions remain controlled, the ECB may contemplate rate cuts from late spring. The recent ECB effort to dispel March rate cut expectations suggests an influence on financial markets, focusing on early-year wage negotiations and corporate pricing strategies.