Semiconductor ETF Hits Rough Patch

The VanEck Semiconductor ETF (SMH) is on track for its worst performance since January, dropping nearly 3% this week. Leading the downturn are companies like Marvell, AMD, and Taiwan Semiconductor, each falling over 6%. This marks a sharp contrast to the fund’s recent trend, with Nvidia being the lone member to avoid losses.

Inflation Data Influences Fed Outlook

Investor vigilance has heightened following recent economic data, including February’s producer price index surpassing expectations. This surge in wholesaler inflation has pushed the benchmark 10-year Treasury yield significantly higher. These developments raise doubts about the Federal Reserve’s potential easing of monetary policy in light of robust economic indicators.

Fed Meeting and Market Speculation

The Federal Reserve’s upcoming policy meeting on March 19 has sparked speculation regarding future interest rate trajectories. While fed funds futures suggest a high likelihood of unchanged rates, the focus is also on the Fed’s perspective on long-term interest rates and market stability. The ongoing discussion about whether inflation has moderated sufficiently could influence these decisions.

Market Volatility and Consumer Sentiment

As the week concludes, heightened trading volumes and price volatility are expected due to the simultaneous expiration of multiple futures and options, known as “triple witching.” Meanwhile, the latest consumer sentiment survey from the University of Michigan marginally missed expectations, reflecting a stabilized yet cautious consumer outlook.

Market Forecast: Bearish Outlook

Considering the heightened concerns around Federal Reserve policy and persistent inflationary pressures, the market outlook leans bearish in the short term. The upcoming Fed meeting and ongoing economic data will be critical in shaping investor sentiment and market direction.

Technical Analysis

At current levels, Michigan Consumer Sentiment is almost 25% above the levels seen in November 2023.

The University of Michigan commented: “After strong gains between November 2023 and January 2024, consumer views have stabilized into a holding pattern; consumers perceived few signals that the economy is currently improving or deteriorating.”

U.S. Dollar Index settled near the 103.40 level after the release of Michigan Consumer Sentiment report. Treasury yields are moving higher as bond traders react to the recent CPI and PPI reports, which exceeded analyst expectations. U.S. dollar has also started to move higher in recent trading sessions, but it remains to be seen whether Consumer Sentiment data would provide additional support to the American currency as it shows that consumers’ views on the economy were mostly unchanged.

Gold is mostly flat, trading near the $2160 level. Demand for precious metals stays strong, so gold traders have mostly ignored the recent developments in the bond markets.

SP500 made an attempt to settle below the 5120 level after the release of Consumer Sentiment data. The index remains under pressure as traders take some profits off the table near historic highs.

For a look at all of today’s economic events, check out our economic calendar.

Most of the coins are in the green zone, according to CoinStats.

SHIB/USD

The rate of SHIB has increased by 1.2% over the last 24 hours.

Despite today’s rise, the price of SHIB is looking bearish on the hourly chart. It is coming back to the local support level of $0.00003129. If the situation does not change by the end of the day, one can expect a breakout, followed by a move to the $0.000030 zone.

A better picture can be seen on a longer time frame. At the moment, the price of SHIB has not reached important levels, which means that neither bulls nor bears are dominating at the moment. 

In this case, sideways trading around $0.000031 is the more likely scenario for the next few days.

From the midterm point of view, the rate of SHIB remains bullish until it is above the $0.00002966 level. However, if it breaks out, traders may witness a correction to the $0.000025 area.

SHIB is trading at $0.00003194 at press time.

The major European indices are closing with mixed results:

• German DAX, -0.03%
• France CAC, +0.04%
• UK FTSE 100, -0.20%
• Spain’s Ibex, +1.02%
• Italy’s FTSE MIB +0.57%

For the trading week, major indices moved higher led by Spain’s Ibex.:

• German DAX, +0.69%. The index did reach a new all-time high at 18039.05 before rotating lower
• France CAC, +1.7%. Like the German DAX, the index traded to a new all-time high at 8218.07
• UK FTSE 100. +0.88%
• Spain’s Ibex, +2.84%
• Italy’s FTSE MIB, +1.65%

As London/European traders head for the exits, US stocks are trading at session lows and all three major indices are now in negative territory:

• Dow industrial average -280 points or -0.72% at 38627.36
• S&P index -45 points or -0.88% at 5105
• NASDAQ index -200 points or -1.22% at 15927.

In the US debt market, yields are mostly higher especially in the shorter end:

• 2-year yield 4.71%, +3.0 basis points
• 5-year yield 4.323%, +3.0 basis points
• 10 year yield 4.308%, +1.0 basis points
• 30-year yield 4.435%, -0.7 basis points.

Doo Financial HK Limited, a subsidiary focused on providing CFDs for retail traders within the Doo Group, has successfully obtained a Type 1 (Dealing in Securities) License from the Hong Kong Securities and Futures Commission (SFC). This key authorisation empowers the firm to offer various securities trading services to regional clients.

The acquisition of the Type 1 license came after a thorough review of Doo Financial’s operational framework, financial health, corporate governance practices, and the qualifications of its team, highlighting the firm’s dedication to maintaining stringent compliance with regulatory standards.

Armed with this new license, Doo Financial HK Limited is now equipped to carry out a variety of securities-related transactions, including executing trades, distributing unit trusts and mutual funds, participating as a joint book-runner, and engaging in placement and underwriting activities.

“Doo Group views the Hong Kong market as a critical arena for its strategic growth, offering numerous opportunities,” remarked the company. This license marks a significant step in the company’s plans to diversify its financial service offerings and enhance client investment opportunities.

This development builds on Doo Financial HK Limited’s previous achievements, including securing Type 4 (Advising on Securities) and Type 9 (Asset Management) licenses from the SFC, which enabled the firm to provide investment advice and asset management services. Adding the Type 1 license further enriches the firm’s service portfolio.

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The announcement of the SFC license aligns with Doo Group’s recent expansion efforts, notably the inauguration of a new office in Dubai. This establishment aims to bolster the firm’s capabilities in digital technology, software development, and client support, catering to the increasing demands of its regional clientele.

Doo Group boasts a comprehensive global footprint, with operations in the United States, the United Kingdom, Cyprus, Egypt, South Africa, Seychelles, Mauritius, Hong Kong, Thailand, Malaysia, Singapore, Vanuatu, and Australia.

The firm’s trading platform has seen significant growth, with a trading volume of over $452.3 billion in the first half of 2023, marking a 39.4% year-over-year increase. Additionally, the number of active clients on Doo Group’s trading platforms has surged to more than 130,000 active clients.