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APRIL 5, 2024

MORE JOBS THAN EXPECTED

The Labor Department’s Bureau of Labor Statistics has reported that in March, job creation exceeded expectations, with nonfarm payrolls increasing by 303,000, well above the projected 200,000. This significant growth led to a decline in the unemployment rate to 3.8%. Meanwhile, wage growth remained consistent, with a 0.3% monthly increase and a 4.1% rise from a year earlier, aligning with Wall Street estimates. Furthermore, major job gains were observed in sectors such as healthcare (72,000), government (71,000), leisure/hospitality (49,000), and construction (39,000). Retail trade added 18,000 jobs while the “other services” category contributed 16,000 jobs. Moreover, let’s remember that the Federal Reserve is closely monitoring the strong labor market as it deliberates on monetary policy decisions, and although concerns over a prolonged Fed hold recently led to stock market declines, the stock market futures stabilized post-report.

SIGNIFICANT TRADING ACTIVITY

It has been revealed that during March, cryptocurrency trading through futures and options reached a record high of $6.18 trillion, marking a substantial increase. However, the dominance of these derivative products in the market dropped to 67.8%, the lowest level seen since December 2022. This was because the spotlight shifted to spot trading, which involves immediate exchange of cryptocurrencies, with volume hitting $2.94 trillion – the highest since May 2021. This shift towards spot trading was fueled by Bitcoin hitting record highs in March, and a resurgence of interest from retail investors. Furthermore, many have stated that spot trading is considered more favorable due to the speculation and volatility often associated with derivatives, and due to rise in interest, the total trading volume combining spot and derivatives trading peaked at an all-time high of $9.12 trillion. Moreover, although Bitcoin is currently trading below the $70,000 mark, it is worth noting that it surged by 16.6% in March, while the broader crypto market, as reflected in the CoinDesk 20 Index, grew by over 50% in the first quarter of the year.

HIGHER INFLOWS

According to the latest data from Bank of America Global Research, investors channeled a substantial $18.6 billion into technology stocks during the first quarter of this year, marking the third largest quarterly inflow. Alongside this, investments also poured into cash and bonds, with cash money market funds experiencing a notable surge this week, likely attributed to the quarter-end shuffling. Within the stock market, approximately $14.2 billion was directed towards equities, with $1.1 billion specifically targeting the technology sector, while bonds saw a whopping $13.4 billion influx, notably including $9.7 billion for corporate debt. Moreover, although the current sentiment regarding when the Federal Reserve will cut rates is of uncertainty regarding, analyst have stated that  it is very possible for cash assets to decline if the Fed does implement them.

DELL’S AI BOOM

Dell Technologies stock has surged to record highs on the market’s excitement over artificial intelligence hardware. Notably, the stock has jumped over 20% in this week, and it has seen a 72% increase this year. Dell’s strong performance is attributed to the demand for AI servers using Nvidia H100 chips, and the company reported impressive financial results driven by AI server sales, with a backlog of orders reaching $2.9 billion. Dell is also gearing up for the release of AI PCs and expects significant growth in AI-capable PC sales by 2026. Additionally, the rise of AI data centers is boosting demand for storage products, with positive impacts on Dell and other infrastructure players like Micron Technology, which reported a 100% increase in enterprise SSD sales.

SEEKING APPROVAL

Cboe Global Markets has requested the Securities and Exchange Commission (SEC) the approval of a new rule change that would allow the addition of an exchange-traded fund (ETF) share class to existing mutual funds. If approved, asset managers would be able to offer investors exposure to mutual fund portfolios through an ETF, providing them with more investment options. This move is seen as a way to streamline the process of creating ETF products that are based on existing mutual funds, as opposed to launching entirely new funds. The industry sees this development as a step towards potentially increasing the number of ETFs and assets under management, and although the SEC has 240 days to make a decision on Cboe’s application, there is no guarantee of approval. However, industry experts suggest that Cboe’s proactive approach may improve the odds of gaining approval.

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