Fixed Income Market Overview
Investors are re-evaluating the Federal Reserve’s potential interest rate cuts due to strong economic data and concerns about persistent inflation, leading to a decline in the U.S. government bond market. The benchmark 10-year Treasury yield reached its highest level in over four months on Wednesday, reflecting a shift in sentiment regarding expected rate cuts. Futures markets on Wednesday showed investors are now betting on a 70-basis point cut compared to the 150 basis points initially anticipated for the year. Factors such as robust U.S. economic data and worries over inflationary pressures contribute to the rise in bond yields. Despite expectations of rate cuts, concerns persist about U.S. financial conditions and potential inflationary rebounds, especially with rising oil prices. Investors await upcoming employment and consumer price data to gauge the sustainability of bond market trends. Year-to-date total returns for the 7–10-year Treasury Index are at minus 2.1%. Net bearish positions in key Treasuries futures increased recently, indicating market sentiment. While some analysts see potential in adding more duration if yields rise, confidence in such trades is diminishing. Despite the selloff, some seasoned portfolio managers believe the bond market won’t see significant further declines, expecting 10-year yields to range between 4% to 4.75%, with inflation remaining under control.
US labor market still tight; trade seen subtracting from Q1 growth.
Google parent Alphabet weighs offer for HubSpot, sources say.
U.S. crude oil hovers around $85 as gas prices hit highest level since October.
Gold price moves away from all-time peak, remains depressed below $2,300 ahead of US data.
India stares at high youth unemployment as hiring in its behemoth IT sector slows.
Major Indicies
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DJIA | 38,596.98 | -530.16 | -1.35%↓ |
| NASDAQ | 7,878.78 | -281.41 | -1.55%↓ |
| SNP 500 | 5,147.21 | -64.28 | -1.23%↓ |
| NIKKEI | 39,773.14 | 321.29 | 0.81%↑ |
| VIX | 14.35 | 0.02 | 0.14%↑ |
| HIS | 16,725.10 | -206.42 | -1.22%↓ |
Bonds
| Name | Yeild | CHG |
|---|---|---|
| US 10-YR | 4.33% | -0.03 |
| US 30-YR | 4.49% | -0.02 |
| US 5-YR | 4.31% | -0.02 |
| JPN 10-YR | 0.74% | -0.03 |
| UK 10-YR | 4.06% | -0.02 |
Futures & Commodities
| Name | Last | Change | %Change |
|---|---|---|---|
| WTI CRUDE | 86.59 | 1.16 | 1.36%↑ |
| NAT GAS | 1.77 | -0.067 | -3.64%↓ |
| GOLD | 2,288.8 | -5.6 | -0.24%↓ |
| SILVER | 27.14 | 0.2 | 0.74%↑ |
| COPPER | 4.2465 | 0.05 | 1.28%↑ |
Equity Market Overview
Dell Technologies
Dell Technologies’ stock has surged to record highs, driven by fervent market interest in AI hardware, reaching $131.40 in late morning New York trading. With a notable 20% rally over the past five days and a 72% yearly gain, it mirrors Nvidia’s trajectory. Strong demand for AI servers, especially with Nvidia H100 chips, has propelled Dell’s stellar performance, evident in its $2.9 billion backlog. Anticipation surrounding forthcoming AI-capable PCs and the expanding AI data center landscape bolster optimism for future sales and growth in Dell’s enterprise storage division. Encouraging indicators from industry leaders like Micron Technology further reinforce the promising outlook for AI-driven hardware companies like Dell.
Ford Motors
Ford Motor has delayed its all-electric vehicle spending, emphasizing hybrids over EVs due to weaker demand. This includes pushing back the launch of an allelectric three-row vehicle in Oakville, Ontario, to 2027. Ford remains committed to launching its next-generation allelectric truck in 2026. Additionally, Ford plans to expand its hybrid offerings across its gas-powered lineup by the decade’s end. CEO Jim Farley aims to scale a profitable EV business while managing capital allocation effectively, receiving positive investor response with Ford stock increasing by 1.7% in early trading despite losses incurred by the EV division, Model e, in 2023.
Taiwan Semiconductor Manufacturing
Shares of Taiwan Semiconductor Manufacturing (NYSE: TSM) experienced a notable surge, climbing by up to 3.4% on Thursday and maintaining a 1.5% increase by late morning. Following a significant earthquake earlier in the week, TSMC promptly reassured investors regarding employee safety and enacted evacuation procedures. Despite the seismic event, TSMC confirmed the well-being of all personnel and anticipated a rapid return to normal operations, citing minimal damage to critical infrastructure. The company underscored its commitment to swiftly restoring operations, providing updates on manufacturing capability evaluations, and emphasizing safety and operational efficiency.
