The Day at a Glance | February 20 2024

The Top

*China cuts mortgage reference rates to revive the real estate market.

*The United States pushes for UN support for a temporary ceasefire in Gaza and opposes the attack on Rafah.

*Democrats raised $42 million in January fundraising for Joe Biden’s re-election campaign as they prepare for a likely contest against Republican Donald Trump.

*Bank of England Governor Andrew Bailey said that bets on interest rate cuts are not unreasonable even as the UK economy is recovering.

*Oil nears three-week highs due to tensions in the Middle East and Chinese demand

*The three main U.S. indices broke their five-week winning streaks. For the remainder of the week, which will be shorter due to a holiday, markets will pay close attention to earnings reports from Palo Alto Networks, Nvidia, Moderna, Warner Bros. Discovery, Berkshire Hathaway, and others.

Economic environment

China cuts mortgage reference rates to revive the real estate market. On Tuesday, China announced the largest reduction in its history in the mortgage reference rate, as authorities seek to boost the sluggish real estate market and the overall economy. The 25 basis points cut to the five-year loan prime rate was the largest since the reference rate was introduced in 2019 and much larger than analysts expected. This move also suggests that Beijing is no longer as concerned about the negative effects of lower interest rates on the currency or banks as it was last year. In this regard, most analysts and investors are expecting further measures to boost consumption and establish a floor for property prices.

Markets and companies

Global markets with mixed sentiment. Futures of the major U.S. indices are down as they followed another sign of persistent inflation, as the U.S. Department of Labor reported that wholesale prices rose more than analysts expected. Dow Jones -0.17%, S&P 500 -0.10%, while Nasdaq -0.13%. Meanwhile, the 10-year Treasury bond yield at 4.27%. European markets remained stable, mining and technology sectors fell by 1.1%, while chemical stocks increased by 2.2%. Asia-Pacific markets closed mixed as they assessed key interest rate decisions by the China central bank. Nikkei 225 closed with a 0.28% drop, standing at 38,363.61. On the other hand, China is up +0.42%. In Mexico, IPC futures continue to rise, reaching 57,739 points (+0.43%). Oil prices barely changed, staying near three-week highs due to growing tensions in the Middle East and demand recovery in China. The price is at $79.05 per barrel. Natural gas prices are down. Gold prices remained stable despite a stronger dollar and high Treasury yields. Gold is trading at $2,029 per ounce. Silver is trading at $23.16 per ounce, and copper at $384.15 per pound. Lastly, cryptocurrencies are up. Bitcoin is trading at $52,290. After yesterday’s trading session, the exchange rate ranged from a minimum of 17.00 to a maximum of 17.06, currently trading at 17.00.

Corporate news

*Walmart announced on Tuesday that it agreed to acquire television manufacturer Vizio for $2.3 billion.

*Home Depot reported better-than-expected earnings and revenues for the fourth quarter, despite consumers carrying out smaller home projects.

*Intel rose 3.3% after news that the Biden administration is in talks to grant them over $10 billion in subsidies from the Chip Act in the coming weeks.