February 26, 2024

The Market Review: 26 Februrary 2024

By Anthony Walters

  • EU Inflation Falls: Rates Drop, Hope Rises for Cuts
  • New Barrier at Scarborough Shoal Raises Tensions in China
  • Interest Rate Cuts Possible Without Waiting for 2% Inflation Target
  • Euro-Area Wage Data Encouraging

Market Recap.

The S&P 500 ETF paved the way for the week, gaining 0.92% whilst the the Dow Jones Industrial Average ETF followed closely, with a 0.86% return. Tech fared reasonably, adding 0.62%, whilst the FTSE 100 ETF fell by -0.16% for the week.

The S&P 500 ETF made new highs, buoyed by strong earnings from mega cap tech and AI stock, nVidia.


The EU continues to enjoy a decline in the rate of inflation with annual inflation falling to 3.1% in January 2024, down from 3.4% in December. A year earlier, the rate was over three times higher at 10.0%. Energy declined by 0.62% whilst Services (1.73%), Food, Alcohol & Tobacco (1.13%) and non-energy industrial goods (0.53%) all rose in price. Despite the caution by the European Central bank, the continued fall in inflation can only be seen as good news for consumers and markets alike, giving hope to the prospect of interest rate cuts this year.


Satellite images of the hotly disputed Scarborough Shoal in the South China Sea show a new floating barrier across its entrance, near where Philippine ships and China coast guard vessels have had frequent run-ins.

One of the images taken by Maxar Technologies on Feb. 22 and viewed by Reuters showed the barrier blocking the mouth of the shoal, where the Chinese coast guard last week claimed to have driven off a Philippine vessel “illegally intruding” into Beijing’s waters.


Bank of England governor Andrew Bailey said the central bank does not need to wait for inflation to come back to its 2% target before cutting interest rates.

Bailey said market pricing for rate cuts this year is not “unreasonable”, but noted the central bank does not endorse the market curve. “We are not making a prediction of when or by how much,” he added. He told MPs the Monetary Policy Committee is looking for “sustained progress” on three key indicators to reach a judgement about how long the period of restrictive monetary policy needs to be maintained.

Central Banks.

The latest euro-area labour compensation numbers are reassuring, though the European Central Bank will require additional data to be convinced inflation won’t flare up again, according to President Christine Lagarde. “The fourth-quarter wage numbers are obviously encouraging numbers,” she told reporters in Ghent, Belgium, on Friday. “The Governing Council needs to be more confident that the disinflation process that we are observing will be sustainable and will take us to the 2% medium term target.”


The ever volatile commodity that is Natural Gas reversed course from the prior week, gaining over 11% as traders are grapple with a surplus of supply, high storage levels, and weak heating demand due to a mild winter.

Elsewhere, Steel fell by almost 4.00% amid compounding concerns of low demand for the metal by top consumer China. Average daily new home sales in China plummeted by 34% from a year earlier in January, driving prices to fall the most in 10 months to underscore the weak momentum for construction and manufacturing demand.


Nokia have announced a series of new climate targets, including a new commitment to achieve net zero greenhouse gas (GHG) emissions, both in its own operations and across the value chain, by 2040.

The announcement marks a significant acceleration by Nokia of its long-term climate goal, bringing its net zero target forward by ten years from its prior 2050 goal. In addition to its new 2040 goal, Nokia also announced new commitments to accelerate the decarbonisation of its own operations, with a new pledge to completely decarbonise its car fleet and facilities, forming part of its interim goal to reduce its GHG emissions by 50% across Scopes 1, 2, and 3, by 2030.

Week Ahead. 

The most significant releases this week happen from Wednesday as the US reports its GDP figures. QoQ GDP for Q4 2023 is forecast to be 3.30%, down from 4.90% prior.

And on Friday, the EU reports its inflation figures, with the market expecting CPI to fall to 2.50% from 2.80% prior as restrictive monetary policy continues to take effect. On the same day, the US reports its Manufacturing PMI, which is expected to grow from 49.1 to 49.5 in a boost to the sector.


Anthony Walters – Head of ESG at Clever Adviser Technology Ltd (Clever)
Market recap – Data sourced from FE FundInfo & Koyfin. ETFs quoted: iShares Core FTSE 100 UCITS ETF, iShares Core S&P 500 UCITS ETF, iShares Nasdaq 100 UCITS ETF (quoted in Pounds Sterling).
News – Data from Annual inflation down to 2.8% in the euro area, Eurostat, 26/02/24
Inflation – Andrew Bailey: No need for inflation to come back to 2% target before cutting rates, by Valeria Martinez, Investment Week, 20/02/2024
Central Banks – ECB’s Lagarde Says Wage Numbers Encouraging, More Data Needed, by Sanne Wass, Kamil Kowalcze, Jorge Valero and William Horobin, Yahoo Finance/Bloomberg, 23/02/2024
ESG – Nokia Commits to Net Zero Value Chain Emissions by 2040, by Mark Segal, ESG Today, 26/02/24
Geopolitics – Satellite images reveal floating barrier at mouth of disputed atoll in South China Sea By Greg Torode and Karen Lema, Reuters 26/02/24
Commodities – Data sourced from Koyfin and Investing.com
Week ahead – Data sourced from Investing.com


Risk Warning: These are Anthony’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.

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Anthony Walters

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