This week has seen a relatively calm demeanour following the recent flurry of central bank interest rate decisions. US markets cooled as investors opted to secure profits after last week’s historic highs. Meanwhile, UK and European stocks maintained a subdued stance amidst a shortened holiday week, reflecting on recent gains spurred by dovish signals from major central banks.
In economic news, new orders for US manufactured durable goods rose by 1.4% month-over-month in February 2024, greater than expectations and after a downwardly revised 6.9% fall in January. The outlook for manufacturing, which accounts for 10.3% of the economy, is steadily improving as anticipation builds for potential rate cuts by the US central bank later this year.
A Conference Board survey showed US consumer confidence index held steady at 104.7 this month, more or less unchanged from February. While perceptions about the current economic climate improved, rising concerns about persistent inflation and the 2024 presidential election tempered overall sentiment.
Shifting our focus to China, industrial firms recorded a notable 10.2% year-on-year increase in profits over the first two months of 2024, marking a significant turnaround from the 2.3% decline observed throughout 2023. These figures underscore the growing momentum of China’s economic recovery despite ongoing sluggishness in the property sector. This upswing follows promising indicators earlier this month, signalling stabilisation in Asia’s largest economy.
Looking ahead, we are expecting the release of the final Q4 GDP figures for the US and UK, as well as the all-important PCE price index and the Fed’s preferred measure of inflation on Friday, although markets will be closed for Good Friday.
Kate Mimnagh, Portfolio Economist
