Weekly Market Update

Author : The BlackSummit Team
Date : March 9, 2024

Global Market News

Global equities

Global equities were slightly down this week. The S&P 500 fell -0.26% on the week while the Dow Jones declined 0.93%. Additionally, the Nasdaq fell -1.17%. The US 10-year Treasury dropped to the 4.08% mark. Meanwhile, the price of a barrel of West Texas Intermediate fell this week, closing Friday at $77.89. Volatility, as measured by the CBOE Volatility Index, ended the week at 14.74.

Powell Says No Evidence Economy is Falling Into Recession

Federal Reserve Chair Jerome Powell said that there was no evidence that the US economy is at a short-term risk of recession. Speaking at the House Financial Services Committee hearing in Washington, D.C., Powell also confirmed that rate cuts would not begin this month, pushing them back to the summer or beyond. This comes just before Friday’s Labor Department jobs report, which showed 275,000 jobs added last month – a number above expectations, even with January and December’s gain being heavily revised down.

Updated Market Figures

International Developments

Zelenskyy and Mitsotakis’ Close Call; Sweden Joins NATO

A Russian missile exploded near Ukrainian President Volodymyr Zelenskyy’s and Greek Prime Minister Kyriakos Mitsotakis’s motorcade in Odessa. Both leaders were unharmed, but the strike resulted in casualties including five deaths and other injuries. In other news, Sweden joined NATO, becoming the alliance’s 32nd member, marking a historic shift in European security due to Russia’s invasion of Ukraine. Swedish Prime Minister Ulf Kristersson completed the final paperwork in Washington, marking the end of Sweden’s nonaligned status. Sweden’s navy and fighter jets will enhance NATO’s capabilities in the Baltic region, strengthening deterrence against Russian aggression. Finally, the European Commission presented the European Defence Industry Program (EDIP) to enhance the EU’s defense capacities, aiming to address fragmentation in the defense industry and incentivize joint procurement among member states.

VP Harris Urges Humanitarian Plan in Gaza Amidst Rising Pressure on Israel

Vice President Kamala Harris met with Israel’s Defense Minister Benny Gantz, a key figure in the country’s war cabinet, to discuss the urgent need for a humanitarian plan before any major military operations in Rafah. Harris expressed deep concern about the dire humanitarian conditions in Gaza, where the United Nations has warned of impending starvation. In response to the crisis, the US military conducted its first food airdrop to Palestinians in Gaza. These actions come amidst mounting pressure from within the Democratic Party for a permanent ceasefire and increased pressure on Israel to protect civilians. Additionally, President Biden announced plans for a temporary port on Gaza’s Mediterranean coast to facilitate the delivery of humanitarian aid by sea. This initiative is not going to involve the deployment of US military personnel in Gaza.

Cuba Seeks Aid and Solutions to its Economic Crisis

Cuba is facing an economic crisis which is being described by some as the most challenging since the revolution. The Communist Party-led government sought food aid from the UN World Food Programme for the first time, receiving skimmed milk powder in response to an appeal made at the end of 2023. Cuba’s economic woes, including a severe shortage of foreign currency, were attributed to shortcomings in the agricultural model, declining tourism revenue, US sanctions, and elevated food and energy prices due to the conflict in Ukraine. The government assured Cubans of milk supply by March, thanks to fresh deliveries from Brazil, but other shortages, including wheat flour for bread, remain problematic.

US Social & Political Developments

Biden’s State of the Union

President Joe Biden delivered what pundits are calling a robust State of the Union address, challenging his predecessor’s rhetoric and defending his record. Biden criticized Trump’s approach, highlighting themes of resentment and retribution. He emphasized his experience and commitment to democracy, linking Trump’s actions to threats against freedom both at home and abroad. Biden addressed a range of issues, including the Capitol insurrection, Ukraine’s defense, and his efforts to combat inflation and protect consumer interests. He also highlighted his support for Israel while urging for aid to Gaza. Republicans, including Alabama Senator Katie Britt, offered contrasting views in their response, with Trump criticizing Biden’s speech as “angry” and “embarrassing.”

Nikki Haley Drops Out, Leading to Biden-Trump Rematch

Nikki Haley’s presidential campaign came to an end after a significant defeat on Super Tuesday, leaving Donald Trump as the sole contender for the 2024 Republican nomination. Haley delivered a challenge to Trump, urging him to win over moderate Republicans and independent voters who had supported her. She emphasized the importance of broadening the conservative cause’s appeal. Notably, she made history as the first woman to win a Republican presidential primary contest. In other election news, the Supreme Court ruled that states cannot disqualify former President Trump from the ballot for his role in the January 6th attacks on the US Capitol. The Court held that only Congress, not the states, can enforce Section 3 of the 14th Amendment, which disqualifies individuals who have engaged in insurrection from holding office. This decision was based on the concern that allowing states to enforce Section 3 could lead to inconsistent eligibility standards across states, creating electoral chaos.

Corporate/Sector News

TikTok Could be Forced to Divest from ByteDance

A bipartisan committee in the US House of Representatives unanimously approved a bill that could lead to the TikTok app being banned in the US if it doesn’t break with its Chinese owner ByteDance. The lawmakers said that the bill’s intent isn’t to get rid of the popular video app, but to prevent a Chinese company from access to Americans’ data. TikTok spokespeople claim that the bill would infringe on the First Amendment rights of the apps American users. Both House Speaker Mike Johnson and President Joe Biden endorsed the bill.

Japan’s Nikkei Tops 40,000 For First Time

Japan’s Nikkei stock index closed above 40,000 for the first time on Monday, following the index hitting a record high for the first time in 34 years in late February. The gains were primarily driven by strong corporate earnings and a boom in chip-related stocks that are expected to benefit from artificial intelligence investments. Analysts predict that a number of factors will continue to drive foreign interest in Japan’s market such as an increase in inflation, corporate government improvements, and a weaker yen.

EU Hits Apple with $2B Fine

The European Union fined Apple $2 billion for breaching EU antitrust rules, marking the first time the company has been hit by such a penalty by Brussels. Last year, the European Commission charged Apple with preventing Spotify and other music streaming services from informing their users of payment options outside of Apple’s App Store. Apple denounced the decision, saying that the Commission found no credible evidence of consumer harm. Apple plans to appeal the decision, a process which is expected to take several years. In the meantime, Apple will have to pay the fine and comply with the EU’s orders.

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