Zero Fed rate cuts this year ‘definitely on the table’, says RSE Ventures’ Matt Higgins
The Federal Reserve is unlikely to cut interest rates three times this year, Matt Higgins, CEO and co-founder of RSE Ventures, said Thursday on CNBC’s “Street Signs Asia,” contrary to Fed signals and market expectations.
No rate cut was “certainly on the table”, with a cut likely later in the year, he added.
The U.S. Federal Reserve signaled on Wednesday that it would cut interest rates three times in 2024, holding them steady at its latest meeting.
“Unless unemployment starts to pick up and you don’t see more downward pressure on core inflation, I’m not sure there will be three rate cuts in the second half of this year,” Higgins said.
– Dylan Butch
Gold prices set a new record high – market watchers expect the rally to continue
Spot gold topped $2,200 an ounce on Thursday, hitting a new high after the Federal Reserve confirmed plans for three rate cuts this year. And there is more room for gold to rally.
Prices could rise to $2,300 an ounce in the second half of 2024, especially amid expectations that the U.S. Federal Reserve could cut interest rates in the second half of 2024, Aakash Doshi, head of commodity research, told CNBC in Citi’s North America.
State Street’s APAC Gold strategist Robin Tsui wrote in a March 21 note that he expects gold could reach $2,400 an ounce once the Fed begins to pivot.
—Li Ying Shan
The Nikkei 225 hits a new record high as business sentiment improves and exports strengthen
of Japan Nikkei 225 The index hit a new record on Wednesday, rising as high as 40,642.89 points and surpassing its all-time closing high of 40,109.23 points.
The rally was fueled by consumer cyclical and industrial stocks, and also came on the back of an improved business climate in Japan, as well as better export data for February.
The top gainer in the index was the semiconductor company Sumco Corp with gains of 5.42%, followed by the financial technology company Rakuten Groupwhich rose 3.65%.
New Zealand unexpectedly slips into technical recession as economy shrinks 0.1%
New Zealand slipped into a technical recession last year as the country’s gross domestic product shrank by 0.1% in the fourth quarter of 2023 compared to the previous quarter.
That was a surprise contraction as economists polled by Reuters had expected growth of 0.1 percent.
The contraction followed a 0.3% drop in GDP in the quarter ending September 2023, which meant the country experienced two consecutive quarters of contraction — the commonly accepted definition of a technical recession.
Year-on-year, GDP in New Zealand rose 0.6%, slowing from the 1.3% growth recorded in the third quarter.
— Lim Hui Ji
Fundstrat’s Tom Lee sees the Russell 2000 up 50% in 2024
The Russell 2000 It was up nearly 2% on Wednesday for its best day in more than a month – and Tom Lee of Fundstrat Global Advisors thinks the small-cap benchmark has even higher.
On a relative value basis, small caps are back to where they were in 1999, which was “a starting point for a 12-year period of outperformance,” Lee, head of research at Fundstrat, told CNBC’s “Last Call.”
“I think that means the Fed is taking an unnecessary pause and CEOs are getting more confident, that means M&A and IPOs and people are looking at other areas – I think Russell could be up 50% this year,” he said. Indeed, the Federal Reserve kept interest rates steady and maintained its forecast of three rate cuts in 2024 at the conclusion of its March meeting on Wednesday, lifting the major averages to a record close.
A number of factors could boost the Russell 2000 this year, he added, noting that money-making companies in the small-cap index trade around 11 times earnings, “a huge PE story, along with a price-to-book story. The benchmark is also heavily biotech-weighted, and financial companies within the Russell 2000 are likely to benefit once the Fed starts cutting interest rates, he said.
“I think the Russell 2000 represents … the best things that happen when the Fed starts tapering,” Lee said.
–Darla Mercado
Reddit is pricing the IPO at $34 per share
Reddit priced its initial public offering at $34 per share.
That number is at the top of the expected range between $31 and $34. It values the social networking company at around $6.5 billion.
Reddit will make its public market debut on Thursday under the ticker “RDDT.”
— Alex Harring, Leslie Picker, Jonathan Vanian
Corporate buybacks are on the rise, Bank of America says
It’s not just institutional and individual investors pushing stock prices higher. Last week was also huge for corporate share buybacks, Bank of America equity and quantitative strategists, including Savita Subramanian, said in a note on Tuesday.
Redemption trends are “hitting multi-year highs,” BofA noted, with those made by the bank’s own corporate clients reaching the third-highest weekly level on record since 2010.
The pace of repurchases “also tracks typical seasonal levels for this time” of the year for the second week in a row, the strategists wrote. So far in 2024, acquisitions as a percentage of total S&P 500 The market capitalization totaled 0.34% against a 2023 high at the same time of the year of 0.29%.
Buybacks over the past 52 weeks as a percentage of total market value are the highest since August 2020, the first summer of the Covid pandemic, according to BofA.
— Scott Sniper
Stocks are headed for a winning week
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., February 28, 2024.
Brendan McDermid | Reuters
With more than half of the trading week in the mirror, the three major indexes are on track for gains.
The Nasdaq Composite has led the three higher this week, adding 2.5%. The Dow and S&P 500 increased by about 2.1%.
— Alex Haring
The great technological advance may be coming to an end, warns UBS
The big tech rally may be on ‘borrowed time’, according to UBS.
Strategist Jonathan Golub said the advances to apple, Amazon, Alphabet, After, Microsoft and Nvidia it could be short-lived. While valuations aren’t an issue here, he said the end of those big gains for “Big 6” stocks becomes a matter of when, not if.
“With earnings momentum slowing rapidly for the Big 6 and the broader market trend improving, continued outperformance in these stocks — and the narrowness of market returns that entails — is becoming increasingly difficult,” Golub wrote. in a note to clients on Wednesday. “While upward revisions currently support these companies, a slowdown in future earnings cannot be ignored.”
Golub’s call comes amid a strong year for the industry, with technology heavy Nasdaq Composite over 9%.
— Alex Haring
Watch stocks move after hours
Micron offices in San Jose, California, USA on Thursday, November 30, 2023.
David Paul Morris | Bloomberg | Getty Images
Here are some of the stocks showing notable moves in extended trading:
- Micron technology — Shares rose 13% after the semiconductor company beat revenue expectations and gave strong guidance for the measure. The company also posted earnings per share despite analysts forecasting a loss.
- Five below — The value retailer fell 13% on weak fourth-quarter earnings and an outlook for the current quarter and full year.
See the full list here.
— Alex Haring
Stock futures are higher
Stock futures traded modestly higher shortly after 6 p.m. ET.
Dow futures added 0.1%. S&P 500 and Nasdaq 100 futures rose 0.2% and 0.3%, respectively.
— Alex Haring