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Isaac Robinson

Share Market Update February 2024

Written by Isaac Robinson

In the US, The SP500 has continued its upward trend that began in November 2023, rising 2.9% in February. AI has continued to be the centre of attention, as Nvidia reported strong revenue and earnings that beat market estimates. This led to the largest single day market cap gain in history, with Nvidia’s market value rising $277 billion. The SP500 then rose to all-time highs as investors piled into growth and tech stocks. The markets were also strengthened by several positive data releases. Initial and ongoing jobless claims were lower than expected, and the S&P PMI early estimates indicated that business activity in the US manufacturing sector was at a 17-month high.

In Australia, the ASX200 also reached all-time highs in February after data showed that inflation had fallen to 4.1%. This led to investor optimism on the future of interest rates, which drove the market higher. However, some analysts were concerned by the fact that the new market high was not driven by improved earnings expectations (which are expected to fall in 2024), but rather by the prospect of lower rates. Overall, the market is up 0.98% in February.

The market in Europe appeared to follow the US as the Quarterly results from Nvidia led to a global rally and increased interest in tech stocks. Overall, the market rose 2.2% and reached a new all-time high. However, the news was not positive throughout all of Europe, as recent data confirmed that Germany’s economy contracted 0.3% in the fourth quarter of 2023 due to weak global demand and high inflation.

In China, the downward trend that began in April last year continued in early February, with the market falling to a 5-year low. While the Chinese Government has previously made some attempts to support their falling market, the 5-year low appears to have caused them to take it more seriously, with Bloomberg reporting that Xi Jinping will be discussing the struggling market with the financial regulators. The People’s Bank of China has also lowered the 5-year loan prime rate (a key gauge for mortgages) by 0.25% in an attempt to increase demand for property. In addition, regulators announced curbs on short selling, and State investors announced they were increasing their buying of Chinese stocks. The market reacted positively to this news, rising 3.3% in February.

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