Trade fair today: live updates

European shares opened slightly higher on Wednesday, with the benchmark Stoxx 600 index up 0.2% at 8.50am London time.

Britain’s FTSE 100 rose 0.4% after hitting another record on Tuesday, while France’s CAC 40 was 0.1% lower and Germany’s DAX rose 0.2%.

The Japanese yen could move past the 155 level against the US dollar after the Bank of Japan’s monetary policy meeting on Friday, a Bank of America note showed.

BofA analyst Shusuke Yamada wrote that the BOJ has already communicated that yen weakness could influence policy through its impact on inflation, but he thinks a repeat of this communication would not be enough to support the yen.

Yamada said that to support the yen, the BOJ “must recognize that policy has been too accommodative, that the next rate hike is as close as it was in June, and that the final rate would be higher than priced by the market.”

However, he said this is unlikely to be the case as this will push the yen past the 155 level and likely trigger an intervention. 160 fast and test (his) resolve at that level.”

– Lim Hui Jie

Crypto investment firm Grayscale took the next step Tuesday in its pursuit of an ether-traded fund.

The company has filed a Form S-3 with the U.S. Securities and Exchange Commission for the Grayscale Ethereum Trust (ETHE), part of the process to convert that fund into an ETF.

Grayscale has also applied to establish a Grayscale Ethereum Mini Trust, which would presumably have a lower management fee than the ETHE.

While the SEC gave the green light to bitcoin ETFs earlier this year, the regulator has not yet approved an Ethereum ETF. Industry experts expect an update sometime next month, although many are skeptical of an approval.

Grayscale was a key part of the push to get a bitcoin ETF approved, including suing the SEC. The Grayscale Bitcoin Trust (GBTC) is the largest bitcoin ETF, although it has seen outflows since converting in January.

— Jesse Pond

“(G)rowth is strong; inflation according to the Fed’s preferred measure has not slowed as much as expected; and officials are likely spooked by concerns about the persistence of inflation,” Neil Shearing, chief economist at Capital Economics, wrote on Monday. . “It makes sense that the Fed will delay rate cuts until later this year: if there is no economic shock, there is no rush to cut.”

The thinking at London-based Capital Economics is that it makes more sense for the European Central Bank and the Bank of England to ease monetary policy before the US makes growth in these economies weaker, inflation is closer to target and after the Fed “There is a risk that policy will become too tight as more households and businesses refinance their fixed-rate debt.”

Neither central bank needs to wait for the Fed to act first, Shearing said. Both have developed independently of the Fed in previous economic cycles.

The markets are too pessimistic about interest rate policy in the second half of 2024 and 2025, according to Capital Economics. ‘Inflation developments have muddied the waters, but we still expect the Fed, ECB and Bank of England to cut rates by more than markets are currently pricing over the next 18 months. And we think the ECB and the BoE will take action. in June – even though the Fed is now waiting until September to make its first move.”

—Scott Schnipper

Don’t look now, but the S&P 500 Financials are outperforming the broad market, as measured by the S&P 500, by 9.3% to 6.3% so far in 2024. They even beat the S&P 500 Tech Index’s 6.1% gain this year.

“Banks remain strong globally,” read Tuesday morning’s note to clients from Strategas Securities’ technical and macro research team led by Chris Verrone. “One of the most impressive responses to the emerging oversold state of the market has come from the financial sector, with the sector once again pushing to new relative performance heights,” Strategas said. “Some 25 Russell 1000 Financial voters found their way into (Monday’s) three-month relative top list, with Capital Markets, Banks and Consumer Finance leading the way.”

The 25 financial stocks that ranked relatively high ranged from Bank of America, with a market value of nearly $300 billion, all the way to SLM Corp., with about $5 billion.

The relative strength of financial stocks is not limited to the US either. “Globally, European and Japanese banks have also maintained their leadership advantage as the broader market has consolidated/corrected,” Strategas said. For example, ADRs at British bank Barclays are up 22.5% in 2024, even outpacing the 16.6% rally in S&P 500 Communication Services shares.

Here are some of the names posting significant moves in after-hours trading:

• Tesla – The electric vehicle maker rose 8.2% despite missing expectations on both lines. Tesla shared its new initiative around offering an affordable model.
• Mattel – The toy maker rose 2.4% after reporting smaller per-share losses than Wall Street expected.
• Visa – The financial name rose 2.6% after its better-than-expected earnings report.

View the full list here.

– Alex Herring

S&P 500 futures began trading shortly after 6:00 PM ET.

Futures tied to the benchmark index rose 0.2%, while Nasdaq 100 futures rose 0.4%.

Dow futures added just 7 points and traded marginally above the flatline.

– Alex Herring