SignalPlus Macro Analysis (20240328): US Core Inflation Slightly Decreases

At the end of the month, the market remains calm. In Europe, the dovish stance continues, with weak CPI data from Spain. European Central Bank officials proudly claim that despite rising wages, the central bank can "quickly" start cutting interest rates. Meanwhile, the Swedish central bank has also expressed a dovish position, further intensifying rate cut expectations. The market anticipates that the European Central Bank will cut rates by nearly 95 basis points (4 times) before the end of the year, while the expected rate cut for the Federal Reserve is about 76 basis points.

In the United States, Governor Waller spoke after hours, continuing his hawkish tone from February. He made statements such as "The economic situation does not give us a reason for a significant rate cut" and "Based on recent data, reducing the number of rate cuts or delaying them is appropriate." However, as traders begin to prepare for the long weekend, U.S. Treasury yields were hardly affected, and quarter-end rebalancing may dominate tomorrow's price movements.

Interestingly, the U.S. will release the PCE price index on Friday when the market is closed. Wall Street predicts that core PCE month-on-month will slow to below 0.3%, which would be a good shift after a slight rebound in core inflation at the beginning of the year. However, investors are enjoying the holiday and looking forward to strong returns in the first quarter, so the market is unlikely to pay much attention to this data.

Yesterday, 91% of the SPX index components rose, with all major sectors showing gains. As Nvidia shows some signs of weakness, the AI craze has begun to spread to hardware stocks, with the Philadelphia Semiconductor Index outperforming the SPX at an unprecedented speed since the internet bubble. Additionally, looking back over the past year, the U.S. stock market has led global markets with a Sharpe ratio of nearly 3x, which is an incredible achievement considering the massive market capitalization of its components, highlighting the significant wealth effect generated during this bull market.

In the cryptocurrency space, there were some price fluctuations at the New York open, with BTC prices soaring to nearly $72,000 before reversing to a low of $68,500. Meanwhile, Coinbase's stock also experienced volatility at the open (fluctuating from $267 to $278 to $256 within minutes). The fluctuations may be due to a U.S. district judge ruling that the SEC's lawsuit against Coinbase can proceed, with Coinbase being accused of engaging in unregistered securities sales. Its stock fell 2.5% yesterday, putting pressure on BTC prices, although ETF net inflows remain positive, with $418 million added yesterday.

Finally, in an interview with Fox Business, Larry Fink's bluster continues. He stated that even if the SEC considers ETH to be a security, there is still a chance to approve an ETH ETF. Wouldn't it be great if Blackrock, the SEC, and the CFTC could sit down together and resolve the issues?