Aviso Weekly Market Pulse: February 26th – March 1st

Mar 5, 2024

Market developments

Equities:
Tech stocks rallied, with the S&P 500 surpassing 5,100 and the Nasdaq rising about 1.7%. Wall Street firms have revised their S&P 500 forecasts upward, reflecting a stock market rally that has exceeded expectations. Despite concerns about consumer confidence and same-store sales, some retailers are expected to perform well, indicating consumer preference for deals on branded goods. During the fiscal first quarter, Canada’s major banks experienced a boost in trading revenue, offsetting concerns about larger loan-loss provisions, and increasing credit stress. Five out of six of the country’s largest lenders exceeded earnings expectations, driven primarily by robust capital-markets results.

Fixed income:
Bond prices rose on Friday as disappointing factory data and declining consumer sentiment increased expectations for interest rate cuts, however global bonds ended the week relatively flat. U.S. two-year yields continued to decline after remarks from Federal Reserve officials hinted at a dovish stance. The ISM manufacturing index showed a faster contraction in February, leading to concerns about the manufacturing industry’s stability. Treasuries saw an increase in demand, with yields falling across the curve, while traders slightly increased bets on a Fed rate cut in June.

Commodities:
Crude oil prices rose to $79, up 4.4% this week as tensions in the Middle East escalated. Traders are also focused on any news regarding potential extensions to production cuts that expire at the end of March.

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