NOTABLE MOVES 

As of Tue, Mar 12, Singapore Time zone UTC+8

USDJPY, +0.23%, $111.33
EURUSD, +0.25%, $1.1259
GBPUSD, +2.00%, $1.3246
USDCAD, -0.18%, $1.3399
AUDUSD, +0.50%, $0.7071
NZDUSD, +0.45%, $0.6834

S&P500, +1.47%, 2,783.30
Nasdaq, +2.11, 7,164.02
Nikkei Futures, +0.47%, 21,125.09

CURRENCY MARKET WRAP 

  • Fed Chair Powell set the tone after he reiterated the Fed’s patient stance in an interview with 60 Minutes on Sunday. Granted, this wasn’t “new” information, but his comments seemingly helped soothe a market fearful about slowing growth.
  • U.S. Treasuries closed on a lower note, pushing yields higher across the curve. The 2-yr yield increased three basis points to 2.47%, and the 10-yr yield increased two basis points to 2.64%. The U.S. Dollar Index declined 0.1% to 97.18. WTI crude rose 1.2% to $56.80/bbl amid plans from Saudi Arabia to cut oil exports in April and its expectations that OPEC+ will not change its output policy at the next meeting.
  • Sterling surged as the UK government said it had secured changes to its divorce deal from the European Union and planned to hold a vote in parliament. Those changes would not affect the terms of the withdrawal, but offer legal assurances to back it up. European Commission President Jean-Claude Juncker tweeted that the changes provide “meaningful clarifications and legal guarantees.” “The choice is clear,” he said. “It is this deal, or #Brexit may not happen at all. Let’s bring the UK’s withdrawal to an orderly end. We owe it to history.” The UK Parliament is scheduled to debate and vote on May’s withdrawal agreement later today.
STOCK MARKET WRAP 
  • The S&P 500 gained 1.47% on Monday in a buy-the-dip trade following the market’s decline from last week. Underpinning the broad-based advance was some reassurance from Fed Chair Jerome Powell, the outperformance of mega-cap and semiconductor stocks, and the market’s resilience in the face of an early 13.5% decline in shares of Boeing (BA 400.01, -22.53, -5.3%).
  • An Ethiopian Airlines crash over the weekend that involved one of Boeing’s new 737 MAX-8 planes set a different tone for the Dow and its most heavily-weighted component. The initial news of the crash didn’t hinder buying interest in the broader market, though; moreover, Boeing staged a huge intraday rebound as investors flocked to pick up the stock at sharply lower prices. That rebound, which left the stock down 5.3% for the day, helped the broader market extend its reach into positive territory. On a related note, the FAA said shortly before the closing bell that it will issue a Continued Airworthiness Notification to the International Community for Boeing 737 MAX operators.
  • Separately, today’s rebound drove both the S&P 500 and Nasdaq Composite back above their 200-day moving averages, which was regarded as a positive technical move.
  • The semiconductor space was an area of notable strength after NVIDIA (NVDA 161.14, +10.50, +7.0%) announced a deal to acquire Mellanox Technologies (MLNX 117.89, +8.51, +7.8%) for $6.9 billion, or $125.00 per share, in cash. The Philadelphia Semiconductor Index jumped 2.4%, and many of its semiconductor components helped drive the outperformance of the information technology sector and the Nasdaq. The FAANG trade was back in play, too, with shares of Apple (AAPL 178.90, +5.99) increasing 3.5% after the stock was upgraded to ‘Buy’ from ‘Neutral’ at Bank of America/Merrill Lynch. Facebook (FB 172.07, +2.47) also received an upgrade to ‘Buy’ from ‘Neutral’ at Nomura but it underperformed the widely-held group with a gain of 1.5%.