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Moving markets: Five things shaping the FTSE 100 today

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Moving markets today: Japan’s Nikkei hit record high, Nvidia surges, oil prices rise; U.S. Fed cautious on rate cuts; all eyes on PMIs 

On Wednesday, the closing bell saw a mixed performance in U.S. stocks. Post-market trading witnessed a remarkable surge of over 9% in Nvidia’s shares, surpassing previous record highs. In Japan, the stock market achieved a milestone by surpassing its all-time closing high, a level last seen during the country’s late-1980s asset bubble. Oil prices climbed by 1%, buoyed by signals indicating a tightening of supplies. The Federal Reserve expressed apprehension about the potential consequences of prematurely implementing rate cuts, January meeting minutes showed. Looking ahead to Thursday, investors will closely monitor PMI data from the UK, eurozone, and U.S., seeking indications of a potential rebound in global manufacturing. Here are five key takeaways for your day. 

Nvidia’s shares jump more than 9% to reach new record high 

After reporting earnings that surpassed expectations and offering optimistic sales forecasts for the current quarter, Nvidia experienced a remarkable surge of over 9% in after-hours trading. This pushed Nvidia’s stock price to $740, surpassing the previous record high set just a week ago. Despite a recent decline of more than 7% earlier in the week, Nvidia’s stock has still increased by over 35% in 2024. Notably, Nvidia briefly held the position of the world’s fourth-largest public company by market capitalization last week, surpassing Alphabet, before sliding back to the sixth position. 

Fed expresses concern over premature rate cuts in January meeting minutes 

During the Federal Reserve’s latest meeting on January 30-31, most policymakers voiced concerns about the risks associated with reducing interest rates too soon, the minutes showed. There was a widespread uncertainty among officials about the optimal duration for keeping borrowing costs unchanged. The minutes from the meeting suggested a reinforcement of the recent message conveyed by Fed policymakers: they are not eager to implement rate cuts hastily, despite the expectation that such cuts may commence later this year. 

Japan’s manufacturing sector sees continued decline in February 

Japan’s manufacturing sector experienced further declines in February, while growth in the service sector also slowed down, a private survey showed. These findings suggest that the country’s business conditions are worsening as it tries to recover from recession. The preliminary au Jibun Bank Japan manufacturing Purchasing Managers’ Index (PMI) fell to 47.2 in February, down from 48.0 in January, Reuters reported. This index has now remained below the critical 50.0 threshold, indicating contraction rather than expansion, for nine consecutive months. 

What’s coming up 

After the FOMC minutes, investors will be paying close attention to manufacturing data from the US, eurozone, and the UK. The US Purchasing Managers’ Index (PMI) data holds particular significance as it indicates ongoing concerns about inflation. Additionally, key US economic indicators such as initial jobless claims and existing home sales figures will be released. Positive data in these areas could give the Federal Reserve more reason to delay an interest rate cut. Furthermore, the Energy Information Administration’s (EIA) crude oil inventory figures will be closely watched as they can influence oil prices, which have been affected by supply dynamics and subdued demand. 

In addition to economic data, earnings reports from companies like Lloyds Banking Group, Rolls-Royce, and Nestle are anticipated. Nestle’s performance is of particular interest due to its sideways trend since October 2023. It will be important to see how Nestle addresses challenges related to the supply chain crisis and its ability to manage increased costs. 

Japan’s Nikkei hits record high, rest of region remains muted 

In the financial world, the S&P 500 index saw a slight uptick of 0.13%, closing at 4,981.80 points. However, the Nasdaq experienced a dip of 0.32%, settling at 15,580.87 points, while the Dow Jones Industrial Average managed a modest increase of 0.13% to reach 38,612.24 points. After trading ended, Nvidia enjoyed a over 9% surge in its shares thanks to a strong outlook for its first-quarter revenue, driven by robust demand for its artificial intelligence (AI) chips. Conversely, Palo Alto Networks, a cybersecurity firm, suffered a significant setback, with its shares plummeting by 28.44% due to a disappointing forecast for third-quarter billings. 

Over in Japan, the stock market achieved a historic closing level after more than three decades. In the broader Asia-Pacific region, stocks outside Japan experienced a marginal 0.07% increase, with Taiwan’s stock market gaining 0.71%, offsetting losses in Hong Kong where the Hang Seng index slipped by 0.41%, potentially ending a seven-day winning streak. Within the tech sector, there was an overall decline of 0.84%. Mainland China’s blue-chip stocks experienced fluctuations throughout the session, swinging between minor gains and losses. 

Shifting to the bond market, the 10-year U.S. Treasury yield slightly eased during Asian trading to 4.3068%, hovering near levels observed a week earlier. Meanwhile, the U.S. dollar retraced from its recent three-month high, remaining flat at 103.99 in early Thursday trading after peaking at 104.97. In the commodities market, oil prices saw a modest increase, with U.S. West Texas Intermediate crude futures rising by 17 cents to $78.08 a barrel, while Brent crude for April delivery ticked up by 14 cents to $83.17 a barrel. 

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