4.19.24: VIX Surges on Middle East Fears and No Rate Cuts

For Public Readers: Weekly Key U.S. and China brief market notes by Larry Cheung's Analyst Staff Team for our Public Email List

Apr 19, 2024

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In our emails, we will provide the following coverage points:

Brief Overview of U.S. & China Markets
Macro Chart in Focus
U.S. & China Upcoming Economic Calendar
Chart That Caught Our Eye

U.S and China Markets Brief Snapshot 🇺🇸 🇨🇳

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S&P 500 Index: 5,003.97

KWEB (Chinese Internet) ETF: $25.41

Analyst Team Note:
In 2023, interest and investment income among nonfinancial companies in the S&P 500 more than doubled from a year earlier to $69.5 billion.
Interest expense meanwhile increased by 23% to $234.5 billion according to S&P Global Market Intelligence.
At the end of last year, five of the largest U.S. tech companies—Apple, Meta , Amazon.com, Microsoft and Alphabet held 23% of corporate cash investment portfolios of nonfinancial companies in the S&P 500.

Macro Chart In Focus

Analyst Team Note:
The VIX surged above 20 for the first time since October due to escalating Middle Eastern tensions and diminishing hopes for Federal Reserve rate cuts.
Increased conflict between Israel and Iran along with diminishing confidence that the Federal Reserve will pivot to interest-rate cuts in the coming months and stocks set for their third straight weekly loss have driven up fear.
The VIX is on track to close above its 200-day moving average for the longest stretch since October 2022, potentially signalling a shift from previous market calm.

Upcoming Economic Calendar

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U.S Economic Calendar (Upcoming Data Points)

China Economic Calendar (Upcoming Data Points)

Analyst Team Note:
In March, China's youth unemployment rate remained stable at 15.3% among those aged 16 to 24, equalling the rate seen in February.
After temporarily halting its publication last summer when youth unemployment reached record highs, the government resumed reporting this data with a revised methodology that now excludes students.
The overall urban unemployment rate slightly improved to 5.2% in March from 5.3%.

Chart That Caught Our Eye

Analyst Team Note:
The IMF is predicting a boost in Saudi Arabia's economy, projecting a gradual increase in oil production by OPEC and its partners starting from July, with a full reversal of production cuts expected by early 2025.
This adjustment is set to move Saudi Arabia’s growth forecast for next year from 5.5% to 6%, positioning it as one of the fastest-growing economies globally.