US Markets Open: Fed Clues, Capital One Deal, GlobalFoundries Pact in Focus

Global markets followed a negative course ahead of the balance sheets of major companies expected to be announced in the US

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Financial results of major companies such as Nvidia, Wallmart, Home Depot and Rio Tinto will be followed throughout the week in the US markets, which will open for trading today.

Analysts reminded that pricing became difficult with the inflation data announced in the US last week exceeding expectations, and drew attention to the volatility in technology stocks related to artificial intelligence.

Stating that clues will be sought in the minutes of the last meeting of the Fed Federal Open Market Committee (FOMC), which will be published tomorrow, about the path the bank will follow in the coming period, analysts said that the verbal guidance of Fed officials is at the focus of investors.

In the money markets, before the minutes, the Fed is certain to leave the policy rate unchanged in March, while 65 percent probability that the bank will leave the policy rate unchanged in May is priced. The Fed is expected to start cutting interest rates in June with a 75 percent probability.

On the other hand, US bank Capital One announced that it will acquire financial services company Discover in an all-stock deal worth $35.3 billion, while the US government announced that it will provide GlobalFoundries with $1.5 billion in financing for chip manufacturing to increase the country’s supply chain resilience.

The US 10-year bond yield is at 4.3 percent, while the dollar index is hovering at 104.4, up 0.1 percent.

The ounce price of gold, which carried the upward trend to the fourth consecutive trading day, is currently trading at $ 2,19, 0.1 percent above its previous close.

While the tension in the Middle East is being closely monitored, the barrel price of Brent oil is trading at $ 82.8 a barrel, up 0.1 percent in these minutes, extending its upward trend to the fourth consecutive trading day.

While there was no trading on the New York Stock Exchange yesterday, index futures contracts started the new day with a negative trend.

While European stock markets followed a mixed course yesterday, eyes turned to the balance of payments data of the Eurozone today.

Analysts noted that the US equity markets were closed yesterday due to the holiday and therefore trading volumes were low in European stock markets.

On the other hand, yesterday, the German Central Bank (Bundesbank) stated that foreign demand is weakening, consumers are cautious in their spending and rising financing costs may continue to limit investments, and that the German economy may enter a technical recession by contracting in the first quarter of this year after the last quarter of last year.

On the Russian side, Russian President Vladimir Putin announced that he approved the sale of HSBC bank’s subsidiary in Russia to Expobank, while the net profit of Russia’s largest oil company Rosneft increased by 47 percent in 2023 compared to the previous year, rising to 1.3 trillion rubles (approximately $ 14 billion).

Yesterday, the FTSE 100 index in the UK increased by 0.22 percent, while the CAC 40 index in France followed a horizontal course. The DAX 40 index in Germany lost 0.15 percent and the MIB 30 index in Italy lost 0.22 percent. Index futures contracts in Europe started the new day with a mixed course.


While Asian equity markets were negative, the People’s Bank of China (BPoC) lowered the 5-year loan rate (LPR), which is considered as a reference for real estate loans.

In order to stimulate the real estate market in the country, the BPoC lowered the benchmark interest rate for mortgage loans, the 5-year loan prime rate, by more than expected in the monthly fixing.

BPoC cut its five-year loan interest rate by 25 basis points, from 4.20 percent to 3.95 percent, while the bank left its one-year loan interest rate unchanged at 3.45 percent. Markets expected the rate cut to be 10 basis points.

Analysts stated that volatility increased in equity markets after the interest rate decision, and that the increase in the trading volume of various exchange-traded funds in the country gave a clue that state-backed funds continued to support the market.

Near the close, the Nikkei 225 index in Japan decreased by 0.3 percent, the Hang Seng index in Hong Kong by 0.4 percent, the Kospi index in South Korea by 1.3 percent and the Shanghai composite index in China by 0.2 percent.


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