Equity markets remained in a buoyant mood last week as perceived dovishness from Federal Reserve (Fed) Chairman Jerome Powell helped to propel US indices to new heights. The Fed hosted its latest monetary policy meeting on Wednesday and whilst the rate setting committee voted to maintain interest rates at their current level, the signal to the market was to expect three cuts later in the year[1], with Powell displaying a somewhat dovish tone in the post meeting press conference. Cue the S&P 500 passing the 5,200 mark for the first time in its history, ultimately ending the week +3.4% higher (in USD). Both the Dow Jones and NASDAQ also reached all-time highs, the latter achieving so despite some mid-week selling pressure for its largest constituent, Apple; the US Justice Department filed an antitrust case against the Company on Thursday[2].

Central bank meetings were also held in both the UK and Japan. Whilst the Bank of England (BoE) voted to leave interest rates unchanged once again, the Bank of Japan (BoJ) lifted its base rate for the first time since 2007. That was earlier than many analysts and economists had expected and with the Yen weakening further, the Nikkei 225 surged by a further +5.2%. As for the UK, the FTSE 100 and FTSE 250 concluded the week +2.6% +1.1% higher respectively, with Governor Andrew Bailey’s dovish signal regarding future rate cuts well received by the market. Elsewhere, market advances were somewhat more muted in both Europe and China, albeit both did finish the week in positive territory, the former +1.0% higher and the latter +0.4%.

Moving to commodities, oil prices were largely flat with Brent Crude rising by +0.2% to $85.58 a barrel. An uptick in the dollar helped to keep any sharp moves in check whilst traders waited for news regarding a possible ceasefire between Israel and Hamas. Gold was also little changed, the precious metal matching Brent’s +0.2% rise to conclude the week at $2,166 an ounce. In the industrial metal space, copper reached its highest level for eleven months, bolstered by the output of the Fed meeting and the prior week’s announcement from China where smelters have pledged to trim capacity.

Week Ahead

Source: Refinitiv Workspace, 25/03/24

[1] Federal Reserve – Summary of Economic Projections, 20/03/2024

[2] US Department of Justice - Justice Department Sues Apple for Monopolizing Smartphone Markets, 21/03/2024. Retrieved from https://www.justice.gov/opa/pr/justice-department-sues-apple-monopolizing-smartphone-markets

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