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The S&P 500 hit another record high yesterday as traders looked past a US inflation report that saw prices rise slightly faster than expected. Pundits don’t think the “last mile” surge of inflation will derail the US Federal Reserve’s plan to start trimming interest rates throughout the second half of the year.
Market rallies now have analysts thinking we’re in the midst of a risk reset: The world’s most prominent indices — S&P 500, Nasdaq, Japan’s Nikkei 225, Germany’s Dax, and others — have all notched record highs in recent weeks, cementing investor and analyst confidence and pushing some to let go of previously risk-averse approaches, the Financial Times writes.
“Everyone’s been anticipating a recession for a long time and it hasn’t materialized,” UBS Asset Management’s head of multi-asset strategy Evan Brown told the salmon-colored paper. “It’s like a reset of the risk cycle,” Brown added, pointing to previously risk-averse investors not jumping back into stocks. Driving investor confidence is the understanding that central banks across the world seem to have been able to reel back inflation without sparking an economic downtown — referred to by economists as the Goldilocks scenario.
Looking into the crystal ball: Goldman Sachs, UBS, and Bank of America have all upgraded their year-end forecasts for the S&P 500, with BofA penciling in a 5% increase above current levels. Société Générale sees the Nasdaq 100’s earnings gaining 40% in 1H 2024, while Morgan Stanley expects pan-European indices to “keep rising like it’s 1995,” notching a 12% increase above current levels.
THE MARKETS THIS MORNING-
Asian markets are mixed in early trading today. Futures point to similarly mixed open for European shares later this morning, while US futures softened overnight after shares advanced yesterday .
|
TASI |
12,613.94 |
+0.5% (YTD: +5.4%) |
|
|
MSCI Tadawul 30 |
1,599.07 |
+0.2% (YTD: +3.1%) |
|
|
USD : SAR (SAMA) |
3.75 Sell |
3.75 Buy |
|
|
Interest rates |
6% repo |
5.5% reverse repo |
|
|
EGX30 |
32,661.61 |
-2.2% (YTD: +31.2%) |
|
|
ADX |
9,228.64 |
-0.04% (YTD: -3.7%) |
|
|
DFM |
4,252.77 |
+0.1% (YTD: +4.8%) |
|
|
S&P 500 |
5,175.27 |
+1.1% (YTD: +8.5%) |
|
|
FTSE 100 |
7,747.81 |
+1% (YTD: +0.2%) |
|
|
Euro Stoxx 50 |
4,983.20 |
+1.1% (YTD: +10.2%) |
|
|
Brent crude |
USD 82.43 |
+0.3% |
|
|
Natural gas (Nymex) |
USD 1.71 |
-2.6% |
|
|
Gold |
USD 2,166.10 |
-1% |
|
|
BTC |
USD 70,868.39 |
-1.8% (YTD: +219.4%) |
THE CLOSING BELL-
The TASI rose 0.5% yesterday on turnover of SAR 8.4 bn. The index is up 5.4% YTD.
In the green: Al Arabia (+10%), AlRajhi Takaful (+7.2%) and Saudi Steel Pipe (+7.1%).
In the red: Electrical Industries (-5.5%), SADAFCO (-4.1%) and SISCO Holding (-2.7%).
Asian markets are up/down in early trading this morning and futures suggest xx
CORPORATE ACTIONS-
Saudi Arabian Amiantit’s shareholders subscribed to 92% of the 34.65 mn rights shares, reeling in SAR 319 mn in proceeds, it said in a disclosure to Tadawul. The remaining shares will be offered to institutional investors in a rump offering today and tomorrow.
Electrical Industries BoD will distribute SAR 84.4 mn in dividends at SAR 0.075 per share for the second half of 2023, it said in a disclosure to Tadawul yesterday. Payments will be made to eligible shareholders on Wednesday, 24 April.
