Most major equity indices made modest gains in what was a shortened trading week for many markets ahead of the Easter holiday period. The S&P 500 index closed out a strong quarter with new closing and intraday highs. US equity gains this week were broad based, evidenced by notably stronger gains for the equal-weighted index as opposed to the more familiar market-weighted version. Small-caps also outperformed large-caps, whilst Value outstripped Growth.
Gross Domestic Product (GDP) revisions published on both sides of the Atlantic saw the US economy growing faster than expected in Q4’23 with an upwardly revised 3.4% annualized growth rate, whilst the UK economy saw no change to its -0.3% contraction that saw it slip into a technical recession. The UK’s FTSE 100 index was outstripped by small and mid-cap markets during the week.
Japan’s Nikkei 225 stood out this week as an exception, shedding -1.27% as investors focus on volatile Yen versus Dollar exchange rate, coming under particular strain on Thursday as the Yen approached 152 JPY amid speculation this could trigger authorities to intervene in the foreign exchange markets to support the weakening currency. A weaker Yen has benefited many of Japan’s large-cap exporters recently as they derive a significant share of their earnings from overseas.
Moving to commodities, the price of a barrel of West Texas Intermediate crude oil climbed 2.8% to close the week a shade over $83. Gold also continues to stretch its record high and extend its year-to-date rise to +8.0%. Stronger than expected inflation indicators late last week were supportive. The precious metal climbed +3.0% on the week to Thursday’s close of $2,233 an ounce.
Week Ahead
| Day | Country | Measure | Period | Forecast | Previous |
| Monday | China | Caixin Manufacturing PMI | March | 51.00 | 50.90 |
| US | Manufacturing PMI | March | - | 52.50 | |
| Tuesday | Europe | Final Manufacturing PMI | March | 45.70 | 45.70 |
| UK | Nationwide House Price Index YoY | March | 2.40% | 1.20% | |
| Wednesday | China | Caixin Services PMI | March | - | 52.50 |
| Europe | CPI Inflation YoY | March | 3.00% | 3.10% | |
| Europe | Unemployment Rate | March | 6.40% | 6.40% | |
| US | Services PMI | March | - | 51.70 | |
| Thursday | Europe | Final Services PMI | March | 51.10 | 51.10 |
| UK | Services PMI | March | 53.40 | 53.40 | |
| Friday | Europe | Retail Sales YoY | February | -1.20% | -1.00% |
| US | Average Wages YoY | March | 4.10% | 4.30% | |
| US | Non-Farm Payrolls | March | 200K | 275K | |
| US | Unemployment Rate | March | 3.90% | 3.90% |
Source: Refinitiv Workspace, 02/04/24
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