The Long and Short of it, week ending 05 Apr 2024
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All 3 major indexes finished the week lower, with the Dow Jones Industrial Average faring the worst. Reduced Fed rate-cut expectations were the primary factor moving both stock and bond markets lower. The previous Friday’s as-expected PCE Price Index release, Better-than-expected manufacturing activity and hawkish Fed officials’ comment combined to pressure stock markets lower. Wednesday’s dovish Fed Chair Powell comments and weaker-than-expected services PMI index release managed only to restrain losses while Friday’s stronger-thanexpected jobs report worked, surprisingly, to move markets noticeably higher (perhaps more due to cooling wage pressures). For the week, the S&P 500 Index fell 1% to 5,204.34, the Nasdaq Composite Index decreased 0.8% to 16,248.52, the Dow Jones Industrial Average dropped 2.3% to 38,904.10, the 10-year U.S. Treasury rate rose 20bps to 4.40% and the U.S. dollar (as measured by the ICE U.S. Dollar index – DXY) weakened 0.2%.
European stock indexes moved lower as well last week with the FTSE 100 Index slightly outperforming the STOXX 600 Index. Renewed rate-cut uncertainty pushed both indexes lower Tuesday (the first trading day following a long holiday weekend) but both indexes moved higher Tuesday and Wednesday, reacting to a weaker-thanexpected U.S. services activity, dovish Fed Chair Powell comments, falling eurozone and German inflation (affecting the STOXX 600 Index) and rising commodity prices (primarily affecting the FTSE 100 Index). Friday’s stronger-than-expected U.S. jobs report and hawkish Fed officials’ comments, however, reversed those gains, pushing both indexes nearly 1% lower. For the week, the STOXX 600 Index decreased 1.2% to 506.55, the FTSE 100 Index declined 0.5% to 7,911.16, the 10-year Gilt rate increased 12bps to 4.10%, the 10-year Bund rate rose 11bps to 2.40% and the British pound and euro strengthened 0.1% and 0.4%, respectively, both with respect to the U.S. dollar
Top performing ETPs over the week
| . | 3x Long ETPs | 3x Short ETPs | ||
|---|---|---|---|---|
| UK | 3x Shell (3LRD) | +17.9% | -3x Vodafone (3SVO) | +8.1% |
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The Long and Short of it, week ending 05 Apr 2024
