The market predicts a 99% chance that the Fed will keep interest rates unchanged at tomorrow’s meeting – Market Updates from CPT Markets

In-depth market analysis by Vikas Lakhwani, Chief Revenue Officer, CPT Markets

1. Nvidia and other technology stocks recover
   Alphabet shares added 4.6% after Bloomberg News reported that Apple is negotiating with Google to bring Gemini Al to the iPhone. Nvidia shares jumped 4% on Monday morning. On the first day of Nvidia’s GTC Conference, where the chip maker is expected to showcase its latest advances in the field of artificial intelligence. Analysts raised their stock price targets as the conference kicked off, with Truist’s William Stein forecasting a 34% upside for Nvidia.
   
2. China’s economic picture shows signs of improvement
   On March 18, China’s National Bureau of Statistics (NBS) released a series of economic reports, reflecting positive signs of growth in the world’s second largest economy. Specifically, NBS data show that China’s total value-added industrial output, an important economic indicator, increased by 7% in the first 2 months of this year. This growth rate is 0.2 percentage points faster than in December 2023. The average unemployment rate in urban areas surveyed is 5.3% in the first two months of 2024. According to NBS, China’s employment situation is generally stable during this period.
   
3. The market predicts a 99% chance that the Fed will keep interest rates unchanged at tomorrow’s meeting
   The market is currently forecasting a 99% probability that the Fed will keep interest rates unchanged this week at 5.25% -5.50%. However, expectations for an interest rate cut in June have decreased in recent days, to about 55%. Market developments suggest there is a risk that at this week’s meeting, Fed officials will revise their forecasts to signal they will cut interest rates less in 2024. As recent inflation and economic growth data have been higher than estimates.
   
4. Crude oil supply from Iraq and Saudi Arabia decreased
   Saudi Arabia, OPEC’s largest producer, recorded a decrease in crude oil exports for the second consecutive month, falling from 6,308 million barrels/day in December 2023 to 6,297 million barrels/day in January 2024. In addition, Iraq, the second largest oil producer of the Organization of the Petroleum Exporting Countries (OPEC), said it would reduce crude oil exports to 3.3 million barrels/day in the coming months to compensate for the exceeding OPEC+ quotas from January 2024, a commitment to cut 130,000 barrels/day compared to last month.

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Markets Performance

World gold moves sideways waiting for the Fed meeting, Oil reaches its highest level in 4 months. Wall Street prospered, the S&P 500 broke its streak for 3 consecutive losing sessions

US Indices:Dow Jones increased 75.66 points (equivalent to 0.2%) to 38,790.43 points.S&P 500 added 32.33 points (equivalent to 0.63%) to 5,149.42 pointsNasdaq Composite advanced 0.82% to 16,103.45 points. Commodities (Gold & Oil):Gold increased 0.2% to 2,159.69 USD/oz.Brent oil increased by 1.45 USD (equivalent to 1.7%) to 86.79 USD/barrel.WTI oil added 1.54 USD (equivalent to 1.9%) to 82.58 USD/barrel.