A sign for a Bitcoin automated teller machine (ATM) at a gas station in Washington, DC, US, on Thursday, Jan. 19, 2023.
Al Drago | Bloomberg | Getty Images
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Markets were mostly unchanged Monday, though bitcoin breached $30,000. Investors are waiting for bank earnings and price reports.
What you need to know today
- U.S. stocks were unchanged Monday after the long weekend, indicating investors were still weighing — and waiting for — economic data. Asia-Pacific markets mostly rose Tuesday. South Korea’s Kospi climbed 1.4% as the country’s central bank left interest rates unchanged at 3.5%. On the other hand, China’s Shanghai Composite slid 0.4% as prices in the country rose 0.7% year on year for March, which was lower than expected.
- Bitcoin broke the $30,000 barrier for the first time since June last year. The biggest cryptocurrency by market cap is up 86% year to date as investors flocked to it amid the banking turmoil.
- Warren Buffet said in an interview with Nikkei he was thinking about investing more in five Japanese trading houses, which are conglomerates that import various products into Japan. Shares of those Japanese trading house rose by at least 2%.
- Alibaba revealed Tuesday morning an artificial intelligence chatbot named Tongyi Qianwen that will eventually be integrated with all its products. The news didn’t have that much of a lasting impact on the company’s Hong Kong-listed shares, which were last up 0.77% — but rival Baidu sank 6.79%.
- PRO Samsung might see a 96% plummet in quarterly profit, and it plans to cut memory chip production. So why did Wall Street react positively to the news?
The bottom line
Markets in the U.S. reopened Monday but seemed to retain a post-holiday sluggishness as investors digested multiple signs of a slowing — but still strong — economy.
First, even though consumers felt credit was harder to come by in March, the banking turmoil is subsiding. Charles Schwab said average daily outflows were down from February, and the bank had added $53 billion of core net new client assets in March. That trend is consistent with the broader banking industry, according to Federal Reserve data. For the period ending March 29, deposits increased by $42.3 billion on a non-seasonally adjusted basis.
Likewise, although the tech sector was hit by bad news, the storm clouds had a silver lining. Computer shipments for the first quarter plummeted — but IDC thinks cratering demand lets companies finish “rejigging their plans” and improve their supply chains. Indeed, Dell popped 2.98% and HP rose 1.54% on the news — though Apple fell 1.6%, probably because it saw the steepest fall in shipments.
The same dynamic of “bad news is good news” played out in the memory chip sector. Samsung’s plan to cut chip production helped push rivals Micron Technology and Western Digital higher by 8.04% and 8.22%, respectively. There were too many chips flooding the market, analysts believe, and tighter supply is a good thing.
Outside those industries, however, the major stock indexes were mostly unchanged. The S&P 500 ticked up 0.1%, the Dow Jones Industrial Average added 0.3% and the Nasdaq Composite declined by 0.03%.
Investors await a slew of economic indicators this week. On the earnings front, JPMorgan Chase, Wells Fargo and Citigroup report quarterly results. Traders will certainly pore through those reports, but they’ll also want to see what the U.S. consumer price index and producer price index say about the economy. If they reinforce last week’s jobs report and indicate that the economy isn’t overheating, the Federal Reserve may actually manage to steer markets to a fabled “soft landing.” Investors are keeping their fingers crossed.
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