China aims for 5% growth this year and intends to create around 12 million urban jobs, with a 3% inflation target. These goals, particularly the inflation target, are ambitious given the challenges of battling deflation, an aging population, and a property crisis. The market reaction to these targets is mixed, with the CSI 300 seeing gains while the Hang Seng suffers losses due to declines in mainland stocks. Caixin PMI data showed a slowdown in Chinese services expansion in February, and Tesla’s shares fell 7% after reporting low shipments from its Shanghai factory.

Meanwhile, Nvidia’s stock continues to rise, overtaking Saudi Aramco as the world’s third-largest company. Some compare Nvidia’s rise to the Tesla phenomenon of 2020, although challenges lie ahead for both companies. Apple faced a significant drop after the EU imposed a $2 billion penalty for alleged unfair practices in the music-streaming industry. Apple’s late entry into AI and struggles in China add to its challenges.

The S&P500 reached a new record but closed slightly down as investors await Federal Reserve Chair Jerome Powell’s testimony. Powell is expected to urge patience regarding rate cuts and emphasize cautiousness about inflation. The US dollar index remains between its 100 and 200-day moving averages ahead of Powell’s speech and US jobs data releases.

In the foreign exchange market, the EURUSD faces resistance at its 50-day moving average, while the USDJPY consolidates above 150. Gold prices have rallied on safe-haven demand ahead of Powell’s speech, although geopolitical tensions also play a role. However, the impact of low yields on gold prices may limit upside potential if Fed rate cut expectations are the primary driver.

Finally, US crude oil struggled to sustain gains above $80pb despite Chinese stimulus hopes. OPEC’s efforts may face challenges in maintaining prices above this level as non-OPEC countries increase production to offset supply cuts.

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