On Tuesday, Wall Street’s major indices closed higher as investors anticipated unchanged interest rates, awaiting insights from the “dot plot” on future cuts. The S&P 500 rose 0.5%, the Nasdaq gained 0.3%, and the Dow Jones surged 321 points, driven by Apple’s 1.3% increase. Nvidia rebounded 1% on plans for a new AI processor. Meanwhile, the STOXX 50 index soared over 2% to an over 23-year high of 5,007 points, fuelled by expectations of an ECB interest rate cut in June amidst signs of Q4 wage growth slowdown. 

Summary for 20.03.2024 

  • Asian equity markets mostly gained on Wednesday, buoyed by a positive Wall Street performance. Investors awaited the Federal Reserve’s policy decision, while China maintained its loan prime rates and Japan shifted from negative rates. Australian, South Korean, and Hong Kong shares rose, while Chinese stocks remained subdued. Japanese markets were closed for a holiday. 
  • European equities are set for declines as traders anticipate the Federal Reserve’s policy decision, while US equity futures remained steady on Wednesday, with attention on potential rate adjustments. 
  • Oil futures eased back from recent highs, showing a slight retreat. Profit-taking ensued after a robust surge in oil prices, with investors exercising caution ahead of the US Federal Reserve’s interest rate decision. A strengthening dollar also weighed on oil markets, while US crude inventories declined. Geopolitical tensions remained evident, notably with Ukrainian drone attacks on Russian refineries. Iraq and Saudi Arabia disclosed adjustments to their crude exports. 
  • In February 2024, US housing starts surged 10.7% month-over-month to reach an annualized rate of 1.521 million, surpassing expectations of 1.425 million. This follows a 12.3% decline in January. Single-family housing starts rose 11.6% to 1.129 million, while starts in buildings with five units increased by 8.6% to 377k. 
  • In Q4 2023, Eurozone wages rose 3.1% year-on-year, marking the slowest increase since Q3 2022 after a downwardly revised 5.2% growth previously. Notable wage hikes occurred in sectors such as mining, quarrying, water supply, transport, administrative services, and retail. Among major economies, Germany experienced a sharp slowdown, while France and Spain saw more moderate declines. Italy’s nominal hourly wages fell 0.1% following a 2% increase earlier. 
  • Samsung Electronics shares surged this morning after reports of Nvidia testing high bandwidth memory chips from the company. Nvidia’s co-founder mentioned qualifying Samsung’s HBM chips during a press briefing. Samsung’s shares rose 4.6% to an over 2-½ month high, impacting a 1% rise in the broader KOSPI index. SK Hynix slid 2.7% amid intensified competition. 
  • Nvidia‘s shares surged over 1% on Tuesday following CEO Jensen Huang’s announcement of the new flagship AI processor, Blackwell, projecting a data centre market exceeding $250 billion annually. Priced between $30,000 and $40,000, the chip promises substantial performance gains, leading CFRA to reiterate its Buy rating with a $1,000.00 target price. CFRA emphasised Blackwell’s potential to drive revenue growth and highlighted new software advancements, anticipating Nvidia’s TAM to expand rapidly, outpacing competitors over the next decade. 
  • Siemens shares plummeted to a one-year low after CFO Ralf Thomas projected flat revenues for its digital industries division in Q2, with a decline of around 10% compared to the previous year. Margins are expected at 17%, lower than the previous 20% estimate, prompting concerns among analysts. Thomas also highlighted challenges in China’s factory automation sector, foreseeing prolonged destocking until year-end. 
  • Unilever announced plans to spin off its ice cream unit, including Magnum and Ben & Jerry’s brands, and cut 7,500 jobs in a cost-saving initiative. Shareholders reacted positively, driving shares up nearly 6%. The spinoff is expected to complete by 2025, with the ice cream business relocating to Amsterdam. CEO Hein Schumacher aims for mid-single-digit sales growth and modest margin improvement post-split, addressing recent underperformance concerns. 
  • Super Micro Computer announced a public offer of 2 million common shares at $875.00 per share, with an option for an additional 300,000 shares, causing an 9% decline in its shares.  The offering, aiming to raise funds for operations and expansion, could generate approximately $2 billion. Despite recent market success and S&P 500 inclusion, concerns persist about meeting heightened investor expectations. 
  • Luxury goods group Kering anticipates a 10% drop in first-quarter sales, mainly due to a steep decline at its star label Gucci, with projected comparable revenue plunging nearly 20% in the Asia-Pacific region. Despite positive reception to new Gucci designs, the brand’s turnaround is still in its early stages. 
  • HSBC revised down its price target for LVMH to €845 from €860, maintaining a “Hold” rating. Citing a challenging luxury sector environment, HSBC analysts don’t foresee financial upgrades in the near term. Despite recent gains in the share price, they advise caution due to tough comparisons in LVMH’s Fashion & Leather goods segment, prompting the adjustment. 
  • CFRA upgraded Micron Technology‘s price target to $110, maintaining a Buy rating. They cited a revised P/E ratio in line with historical averages and adjusted fiscal year estimates, projecting a loss for FY2024 and increased EPS for FY2025. Meanwhile, UBS raised Micron’s target to $120, anticipating results to meet higher guidance, given subtle DRAM market shifts, with expected price rises due to server demand and limited NAND expenditure. 
  • Oppenheimer reaffirmed its Outperform rating on Marvell Technology Group Ltd., with a target price of $80. Recent discussions on optical transceivers in data centres did not alter Marvell’s growth prospects. The company’s position in the data centre AI segment remains strong, making it a top pick for Oppenheimer. 
  • HSBC upgraded its price target for Inditex to €51.00 from €44.00, maintaining a Buy rating. The revision reflects an increase in forecasted profit before tax for fiscal years 2025-26 and adjustments in asset pricing valuation methodology. Inditex’s premium valuation is justified by its positive earnings trajectory, strong free cash flow, and upcoming first-quarter results expected on June 5, 2024. 
  • On Tuesday, Mizuho Securities initiated coverage on AutoZone Inc. with a Buy rating and a $3,450 price target, highlighting the company’s entry into the expansive US commercial parts market and potential for significant revenue growth. They anticipate margin improvements and international expansion, favouring AutoZone over competitors in the sector.