Stocks opened slightly lower today, following yesterday’s tech rally, but still remained elevated. This week’s upside helped to make up for the losses made at the start of this year, which has put into question whether the equity bull run is over. The timing of central bank cuts this year is still a matter of debate, with some suggesting cuts could come as early as March while others believe they may wait until September. However, we believe that the US economy can handle an elevated interest rate environment, and we don't expect to see any changes until at least Q2 2024. US small business optimism level helped to underscore that narrative, as it reached the 5-month high of 91.9 on the back of easing pessimism around sales, earnings and economic expectations. The dollar jumped higher to 102.50 while the 10-year yield remained unchanged at 4.0%.
Another day of technically-driven trading was seen across the LME exchange. Aluminium struggled to maintain prices below the $2,250/t level, coming back to $2,251/t. In a similar way, copper’s downside continued today, following yesterday’s uncertainty below $8,400/t; the metal is now trading below this level at $8,370/t. Still, the market seems cautious about pushing this level significantly lower, testing the support at $8,360/t by the end of the day. Lead and zinc remained rangebound, settling at $2,051.50/t and $2,503.50/t, respectively.
Oil futures continued to fluctuate today as the market gauged the direction of prices, following the biggest drop in more than a month. WTI and Brent are trading at $72/bl and $77/bl, respectively. The greenback’s strength weighed on precious metals today, pushing silver to $23.00/oz; gold was softer but lacked the conviction to break the support of $2,030/oz.
All price data is from 09.01.2024 as of 17:30