Market News Today: Yellen Urges Policy Shift in China Talks

Yellen Advocates Policy Shift in U.S.-China Talks, Stresses Open Communication

U.S. Treasury Secretary Janet Yellen, on her China visit, emphasized the need for Beijing to adjust its economic and industrial policies. Engaging in direct talks with top Chinese officials, Yellen highlighted the importance of stable U.S.-China relations while addressing differences through open communication. Discussions included balanced economic growth, financial stability, and anti-money laundering cooperation. Although the U.S. stressed anti-money laundering collaboration, China focused on non-politicized trade and its contribution to global carbon neutrality.

U.S. Earnings Week: High Stakes for Market Amid Rising Valuation

As U.S. companies enter earnings season, the stock market faces a critical test with the S&P 500’s valuation at a two-year peak. Investors, eyeing a modest 5% earnings growth projection, the lowest since Q2 2023, anticipate companies like Delta, BlackRock, and JPMorgan to set the tone. Amidst expectations of squeezed margins due to high interest rates and commodity costs, and fluctuating corporate pricing power, significant earnings beats are necessary to justify soaring stock prices and maintain market momentum.

U.S. Economic Focus: CPI and PPI Data in the Spotlight This Week

This week, key U.S. economic reports, especially the March Consumer Price Index (CPI) and Producer Price Index (PPI), will be closely scrutinized for inflation trends. The expected annual CPI increase is 3.5%, a rise from February’s 3.2%. Core inflation, excluding food and energy, is anticipated to slow to 3.7% year-over-year. These reports will indicate whether early 2024 inflation was temporary or if a more prolonged return to the Fed’s target is underway.

U.S. Stock Futures Dip as Market Cools After Recent Rally

U.S. stock futures experienced a slight decline following last week’s market downturn, marking a pause in 2024’s rally. The Dow Jones fell by 0.04%, while S&P 500 futures dropped by 0.08%, contrasting with a marginal rise in Nasdaq 100 futures. Last week’s declines were the most significant since March 2023 for the Dow and early January for the S&P 500. Despite this, a robust jobs report injected optimism about the economy’s strength amidst ongoing concerns about inflation and interest rate hikes.

Oil Gaps Lower, Gold Hits Record High

Oil prices dropped over $1 a barrel with Brent crude slipping under $90, as tensions in the Middle East showed signs of easing following Israel’s troop withdrawal from southern Gaza and initiation of ceasefire talks. Meanwhile, gold prices surged, hitting record highs, driven by speculative buying and ongoing regional tensions. The decrease in oil prices reflects the de-escalation in the Middle East, while the gold market’s momentum is buoyed by geopolitical risks and strong central bank buying.