S&P 500 Reaches New Record High

Equities

The S&P 500 achieved a fresh closing high, demonstrating investor optimism ahead of significant corporate earnings releases and economic data. Major tech companies like Apple, Microsoft, and Alphabet are in the spotlight with their upcoming earnings reports, potentially influencing market sentiment further. The tech-heavy Nasdaq also enjoyed considerable gains, indicating a strong performance by tech stocks.

Tesla's shares surged following announcements about its capital expenditure plans. On the other hand, Robot shares fell after abandoning merger plans with Amazon due to EU antitrust concerns.

In the UK, the FTSE 100 index showed a more subdued performance, remaining relatively flat. This caution in the UK market is attributed to anticipation of central bank rate decisions and corporate earnings. Key contributors to the FTSE 100's performance were precious metal miners and oil majors like BP.

Ryanair saw its shares jump 4.0% despite a challenging session. The budget airline reduced its profit forecast for the year ending March after facing issues with some online travel agents, leading to a necessity to lower fares to fill seats. While the fourth quarter is expected to be Ryanair's weakest, there could be a boost at the end of March due to Easter.

On the other hand, Schroders experienced a 3.7% drop in its shares. This decline came after Exane BNP Paribas downgraded the asset manager's stock to "underperform." The downgrade was attributed to pressures in Schroders' core business, with ongoing challenges like weak flows and high cost pressures.

Forex

The US dollar held steady against its major counterparts as investors awaited the Federal Reserve's monetary policy decision. The market's anticipation is centred around clues on potential interest rate cuts, with recent data suggesting solid economic growth in the US. This week's job opening figures and other domestic jobs data are expected to provide further insight into the strength of the US economy.

The British pound and the euro were little changed, with investors closely monitoring the Bank of England's upcoming policy decision.

European Central Bank (ECB) policymakers are divided over the timing of interest rate cuts. Peter Kazimir suggests a cautious approach, open to a rate cut in April or June. In contrast, Mario Centeno advocates for acting sooner for gradual adaptation, emphasising not waiting for Q1 wage data. Klaas Knot and Kazimir favour a more patient approach, waiting for clearer inflation signals, especially in wage growth. Luis de Guindos, the ECB's Vice President, adopts a neutral stance, acknowledging that positive inflation trends will influence future policy. This division among ECB members highlights the complexity of balancing economic data with monetary policy decisions.

Elsewhere

Oil prices rose due to geopolitical tensions, particularly in the Middle East, affecting global supply concerns. Gold prices, often seen as a safe-haven asset, also saw an increase amidst the escalating conflicts and market uncertainties.