市場新聞與洞察

We often talk about, ‘one piece of data does not make a trend,’ that ‘a headline is just a headline’ and that ‘assumptions are not facts.’ We feel this timeless market lesson has been slightly forgotten of late and the latest US CPI data may be case-in-point judging by the market’s reaction to the read. Let have a dive into the data and the reactions. Here are the headline grabs: The headline Consumer Price Index (CPI) rose by 0.3% from March, slightly below the forecasted 0.4% (good news), and increased by 3.4% year-on-year, in line with expectations.

Core inflation, (ex-volatiles like food and energy), also rose by 0.3% month on month and 3.6% year-on-year matching predictions. However, this is the main take away April was the lowest core inflation reading since April 2021 and the smallest monthly increase since December. But like I said – headlines are just headlines what’s the detail saying?

CPI gains were primarily driven by rises in shelter and energy costs. Shelter costs increased by 0.4% from March and 5.5% year-over-year, remaining a significant concern for the Fed's inflation targets. Rent of primary residence and owners' equivalent rent, both rose by 0.4% month-on-month, with annual increases of 5.4% and 5.8%, respectively, highlighting persistent inflationary pressures in housing and why housing is a massive issue inside the ‘sticky’ inflation metric.

Energy prices rose by 1.1% monthly and 2.6% annually, while food prices remained flat month-over-month but rose 2.2% annually. Vehicle prices declined, with used cars falling 1.4% and new cars dropping 0.4%. Other notable monthly increases were seen in apparel (1.2%), transportation services (0.9%), and medical care services (0.4%).

Transportation services saw a significant annual increase of 11.2%, while services excluding energy rose by 0.4% monthly and 3% annually. These inflation dynamics have us questioning the reactions that were seen as clearly the granular data in areas of issue like shelter, energy and services remain nearly 3 time higher than the Fed’s 2% target. Yet you wouldn’t know it.

The reaction from the three main US bourses was to reach record all time highs. The US500 for the first time ever broke through 5,300 points and the Dow is now inches from 40,000 points. Rate futures price spiked, with the September meeting expectation gauge going from a 61.4% chance of a rate cuts by the Federal Reserve to 75.3%.

The November meeting is now fully priced in and the chance of a second cut in December is above 69%. Again, I am asking the question based on the trends and longer-term data – is that likely? The trend has CPI year-on-year slowing to an average 3.6% - 1.6% away from target.

Sticky inflation is sitting at a 5% rolling average that’s 3% away from target. The reaction in treasuries hit FX particularly USD pairs. DXY was slammed falling 0.4% to 104.52 as the likes of the beaten-up EUR, GBP and other European currencies bounced back against the greenback.

These pair are tricky currently as all are facing rate cuts in the coming months – the question will be who goes first and then by how much to they cut over the new cycle? That will be the dilemma for traders as the more cuts the bigger the weaken. Then we have to look at the AUD/USD which jumped to its highest read since January 15 touching $0.6702 off the back of the CPI.

Since the mid-April low the pair has rallied almost a full 4 cents and with the RBA in a scenario of wait and see. The pressure to the upside remains in the AUD and cold lock the AUD into being the strongest currency in the G10 in the come months. It’s a pair to watch for sure.

Trading terms glossary A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z - C Cable Cable in forex is the nickname of the GBP/USD currency pair, which is one of the most popular currency pairs on the market. Calendar Spread A calendar spread is a trading technique, which involves buying a derivative of an asset in one month and selling a derivative of the same asset in another month. The calendar spread represents the difference in the price of the same asset from one futures contract to another.

Call option A call option is an option to buy an asset at a given price by a specific date. Learn more about Call Options Capital expenditure Funds spent on physical assets. Capital gains Capital gains are the profits made from the buying and selling of assets, when the sale of an asset exceeds the original cost.

Capital gains tax Capital gains tax (or CGT), is the tax levied by the government on the profits made from selling any financial assets. Capital loss Opposite of capital gains. When the sale of an asset is less than the original cost to the owner.

Cash flow Cash flow is the amount of money coming into and going out of a company, and the resulting availability of cash. It can refer to a single project or the entire business. Cash Price Not to be confused with Prompt or Spot price, the cash price refers the price paid or received for immediate delivery of a good or asset.

The cash price and spot futures price should converge the closer you get to the spot futures contract expiry. Cash rate Also known as a bank rate or base interest rate, the cash rate is the interest rate charged by a central bank for loans to other banks. Chartist A chartist trader relies predominantly on charts to help them understand historical data in order to better speculate on future price movements.

Also commonly known as technical analysts, or technical traders. Closing price The price of a security on a financial market at the end of the trading day. Closing prices can be used as a marker when looking at long-term historical movements, or they can be compared to the opening price to review the movement over a single day.

Commission Commission is a service charge by an investment broker for making trades on a client's behalf. Commodity A commodity is a basic physical asset, which can be bought and sold. Commodities can often be categorised as a raw material, used in the production of other goods or services.

Contracts for difference Contracts for difference (CFDs) are a type of financial derivative where your gain or loss is based on the price of the asset when the contract opens and closes. It is an arrangement made where the differences in the settlement between the open and closing trade prices is cash settled and there is no delivery of physical goods or securities. Learn more about CFDs Contract (Lot) A Lot is a trading unit, representing a set amount of a particular asset.

A standard lot in the forex market is $100,000. A mini lot is $10,000. Convexity Bond convexity is a measure of the "degree of the curve" or difference, between a bond’s price and a bond's yield.

It is a risk management tool used to assess the impact that a rise or fall in interest rates can have on a bond’s price – which highlights a bond holder’s exposure to risk. Contango Typically seen when the market is well supplied, contago is when the futures price of a commodity or security is higher than the spot price (present price). Here we would expect the higher price of the futures contract to reflect the commodity cost of carry.

Cost of carry Cost of carry is the amount of additional money you need to hold a position. This can include overnight funding charges, interest payments, or the costs of storing any commodities on the delivery of a futures contract. These charges are an important consideration when trading, as they will affect your net return.

Covered call A covered call is a call option trading strategy, where you hold an existing long position on a tradeable asset and write (sell) a call option against the same asset to generate extra income. The aim is to increase the overall profit that a trader will receive. Learn more about Covered Calls CPI CPI stands for consumer price index, which measures the change in average prices paid by US consumers, month to month.

Learn more about CPI Crystallisation Crystallisation is the act of realising a profit or loss, by selling a position and immediately reopening it again. Currency appreciation The increase in value of one currency compared to another. The 'strengthening’ of a currency in Forex trading means that it would cost more to buy, or that it can buy more of another currency when sold.

Learn more about currency appreciation Currency depreciation A decrease in a specific currency's value, relative to another currency in a floating exchange rate system. In a floating exchange rate system, a currency’s value is set by the forex market, based on supply and demand. Learn more about currency depreciation Currency peg A fixed exchange rate of its currency, set by a national government or central bank.

It can sometimes also be referred to as a fixed exchange rate or 'pegging'. Learn more about Currency Pegs Currency Swap Sometimes referred to as a cross-currency swap, this is an agreement between two parties to exchange principal and fixed rate interest payments in two different currencies to an agreed rate of exchange. Learn more about Currency Swaps.

World’s 3 rd largest e-commerce company PDD Holdings Inc. (NASDAQ: PDD) reported Q4 2023 before the US market opened on Wednesday. The Chinese company achieved revenue of $12.519 billion in the last 3 months of 2023 vs. $11.202 billion expected. Revenue was up by 123% year-over-year.

Earnings per share was reported at $2.44 vs. estimate of $1.589 per share. Company overview Founded: 2015 Headquarters: Shanghai, China Number of employees: 12,992 (2022) Industry: Internet, Agriculture Key people: Lei Chen, Jiazhen Zhao CEO commentary "2023 represents a pivotal chapter in our corporate history as we transition towards high-quality development," Lei Chen, Chairman and Co-CEO of PDD Holdings said in a press release to investors. "In 2024, we remain dedicated to further improving consumer experiences, enhancing technology innovations, and generating positive impacts in our communities," Chen looked ahead. Jiazhen Zhao, Executive Director and Co-CEO of the company said this in his note to shareholders: "In the fourth quarter, we saw growing demand driven by encouraging consumer sentiment.

We will continue our high-quality development strategy, stay dedicated to offer great value and exceptional service, and keep building thriving communities that can benefit all." Stock reaction The stock was up by over 3% on Wednesday, trading at $131.80 a share. Stock performance 5 day: +5.92% 1 month: -0.12% 3 months: -11.49% Year-to-date: -11.42% 1 year: +71.47% PDD stock price targets Jefferies Financial Group: $157 The Goldman Sachs Group: $136 Benchmark: $215 UBS Group: $137 CLSA: $114 HSBC: $126 Barclays: $115 Sandford C. Bernstein: $120 JP Morgan Chase & Co.: $120 Morgan Stanley: $120 Bank of America: $112 Citigroup: $125 Nomura: $110 PDD Holdings Inc. is the 72 nd largest company in the world with a market cap of $173.63 billion, according to CompaniesMarketCap.

You can trade PDD Holdings Inc. (NASDAQ: PDD) and many other stocks from the NYSE, NASDAQ, HKEX and ASX with GO Markets as a Share CFD on the MetaTrader 5 platform. To find out more, go to "Trading" then select "Share CFDs". GO Markets offers pre-market and after-market trading on popular US Share CFDs.

Why trade during extended hours? Volatility never sleeps. Trade over earnings releases as they happen outside of main trading hours Reduce your risk and hedge your existing positions ahead of a new trading day Extended trading hours on popular US stocks means extended opportunities Sources: PDD Holdings Inc., TradingView, MarketWatch, MarketBeat, CompaniesMarketCap

It was a busy day in the US today, with investors waiting on the latest policy decision from the Federal Reserve. The Fed left interest rates unchanged at 5.5%, as expected. All three major Indices, Dow Jones, S&P 500, and Nasdaq finished the trading day at all-time highs for the first time since 8/11/2021.

After the market closing bell, Micron Technology Inc. (NASDAQ: MU) released Q2 of fiscal 2024 financial results and the US semiconductor company did not disappoint. The company reported revenue of $5.824 billion, which was above analyst estimate of $5.347 billion. Earnings per share was reported at $0.42.

Analyst expected Micron to report a loss per share of -$0.253. Company overview Founded: October 5, 1978 Headquarters: Boise, Idaho, United States Number of employees: 43,000 (2023) Industry: Semiconductors Key people: Robert E. Switz (Chairman), Sanjay Mehrotra (President & CEO) CEO commentary "Micron delivered fiscal Q2 results with revenue, gross margin and EPS well above the high-end of our guidance range — a testament to our team’s excellent execution on pricing, products and operations," Sanjay Mehrotra, CEO of Micron said in a statement. "Our preeminent product portfolio positions us well to deliver a strong fiscal second half of 2024.

We believe Micron is one of the biggest beneficiaries in the semiconductor industry of the multi-year opportunity enabled by AI," Mehrotra added. Stock reaction Shares were up by 2.39% at the end of the session on Wednesday at $96.25 a share. The stock rose by over 14% in the after-hours trading as earnings topped expectations.

Stock performance 5 day: +2.22% 1 month: +18.11% 3 months: +22.32% Year-to-date: +12.78% 1 year: +65.46% Micron stock price targets New Street Research: $100 Wolfe Research: $80 BMO Capital Markets: $90 Susquehanna: $112 Evercore ISI: $100 Wells Fargo & Company: $95 The Goldman Sachs Group: $97 Deutsche Bank: $90 JP Morgan Chase & Co.: $105 Morgan Stanley: $74.75 Bank of America: $100 Needham & Company LLC: $100 Piper Sandler: $95 Raymond James: $100 Mizuho: $105 Micron Technology Inc. is the 142 nd largest company in the world with a market cap of $106.25 billion, according to CompaniesMarketCap. You can trade Micron Technology Inc. (NASDAQ: MU) and many other stocks from the NYSE, NASDAQ, HKEX and ASX with GO Markets as a Share CFD on the MetaTrader 5 platform. To find out more, go to "Trading" then select "Share CFDs".

GO Markets offers pre-market and after-market trading on popular US Share CFDs. Why trade during extended hours? Volatility never sleeps.

Trade over earnings releases as they happen outside of main trading hours Reduce your risk and hedge your existing positions ahead of a new trading day Extended trading hours on popular US stocks means extended opportunities Sources: Micron Technology Inc., TradingView, MarketWatch, MarketBeat, CompaniesMarketCap

Lennar Corporation (NYSE: LEN) has had a good start to 2024 with the share price up by over 11% reaching new all-time highs. On Wednesday, it was time for the US construction company to release the latest financial results for Q1 2024, ending on 29/2/24. Lennar reported revenue of $7.313 billion for the quarter, which was below estimate of $7.39 billion.

Revenue was up by 13% from the same period the year before. Earnings per share topped expectations at $2.57 (up by 25% year-over-year) vs. $2.21 per share expected. Company overview Founded: 1954 Headquarters: Waterford District, unincorporated Miami-Dade County, Florida (Miami, Florida postal address) Number of employees: 12,012 (2022) Industry: Construction Key people: Stuart Miller (Executive Chairman, co-CEO), Jon Jaffe (co-CEO, President), Fred Rothman (COO) Stock reaction Shares were down by 0.28% at the end of Wednesday’s session at $165.50 a share.

The stock fell by around 1% in the after-hours trading. Stock performance 5 day: +2.77% 1 month: +7.56% 3 months: +14.01% Year-to-date: +11.04% 1 year: +65.19% Lennar stock price targets Wedbush: $130 Raymond James: $165 JMP Securities: $170 The Goldman Sachs Group: $158 Royal Bank of Canada: $137 Barclays: $165 Jefferies Financial Group: $117 Wells Fargo & Company: $130 JP Morgan Chase & Co.: $135 Citigroup: $139 UBS Group: $159 Evercore ISI: $164 Bank of America: $120 Lennar Corporation is the 416 th largest company in the world with a market cap of $45.63 billion, according to CompaniesMarketCap. You can trade Lennar Corporation (NYSE: LEN) and many other stocks from the NYSE, NASDAQ, HKEX and ASX with GO Markets as a Share CFD on the MetaTrader 5 platform.

To find out more, go to "Trading" then select "Share CFDs". GO Markets offers pre-market and after-market trading on popular US Share CFDs. Why trade during extended hours?

Volatility never sleeps. Trade over earnings releases as they happen outside of main trading hours Reduce your risk and hedge your existing positions ahead of a new trading day Extended trading hours on popular US stocks means extended opportunities Sources: Lennar Corporation, TradingView, MarketWatch, MarketBeat, CompaniesMarketCap

Let us open with this: “It’s unlikely that the next policy rate move will be a hike. I’d say it’s unlikely,” – US Chair Jay Powell This verbatim quote puts a lid on the movements seen in bond and interbank markets that might have overacted to recent data that has been above expectations and has led some to price hikes. The let us counter that quote with this quote: “I think my expectation is that we will, over the course of this year, see inflation move back down.

That’s my forecast. But I think my confidence in that is lower than it was because of the data that we’ve seen.” – US Chair Jay Powell This ‘lack of progress’ is testing the board, it's also clear that members are starting to get spooked by signs in the labour markets that employment is tight and starting to flex to the upside. This is why we use the term ‘lid’ – the lid can come off and judging by the trade in the US500 and USD over the 2 hours from when the statement was released through to the end of Powell’s press conference, the lid is ajar.

The May meeting was supposed to be the start of the Fed's march to lower rates. At least that was what the pricing at the beginning of the year was telling us. As we've seen with the data; persistent inflation, strong employment, flat growth have clearly complicated where the Fed is now going.

And the May meeting may be when the starter gun was lowered - signalling that the federal funds rate to remain at 5.25% to 5.5% for the foreseeable future. If we look at the futures market the expected 150 basis points of rate cuts price in January, forecasted to start at the May meeting, now sits at a mere 32 basis point cut for 2024. And it's falling further.

Risk on trading has been gorging on this idea since last October and in part explains why global indices have been so strong in the face of tough conditions. With the Fed in a fix about what to do next indices are now going to have to ‘prove’ (bottom-up fundamentals) that pricing is justified, something market is now testing. On the FX front, the May Fed meeting has been taken in a different light.

The lid has been taken as ‘firmly on’ and the USD has suffered for it. DXY shows that across the pairs the USD was turfed out as those traders positioned for US Fed hikes got squeezed. We need to be vigilant as to which pairs we looked at.

Considering the EUR, GBP, CAD and Scandinavian currencies are likely to see rate cuts from their respective central banks in the coming months the current fall in the USD may be short lived here. But currencies such as the AUD and NZD facing higher rates for longer may hold on to the gains they acquired. The conclusion, however, is that rates are on hold and will be higher for longer.

The pressure this will put into risk assets is likely to be seen in the coming months and therefore a real test for the bulls that have been driving markets since October last year.