What’s Moving Markets
Alibaba formally unveils its own answer to ChatGPT and Bitcoin surges above $30K for the first time since last summer, while U.S. inflation data looms large, the IMF gets set to reveal its latest economic forecasts, and oil prices gain on expectations for another decline in American inventories.
1. Futures rise with inflation in focus
U.S. futures edged higher on Tuesday, as investors seemed to be waiting for signals from the widely anticipated release of March inflation data later this week.
At 03:42 ET (07:42 GMT), the Dow futures contract had risen by 22 points or 0.07%, S&P 500 futures inched up by 5 points or 0.11%, and Nasdaq 100 futures gained 16 points or 0.12%.
Investors are preparing for a series of key economic data points, including the latest consumer price and producer index for last month. The figures, which are due out on Wednesday and Thursday respectively, are expected to provide some clues about the potential for an easing in the Federal Reserve’s recent monetary policy tightening campaign.
Meanwhile, a few Fed regional presidents are slated to speak today. Philadelphia Fed president Patrick Harker, Minneapolis Fed president Neel Kashkari, and Chicago Fed president Austan Goolsbee are all set to make appearances.
2. Bitcoin tops $30K
Bitcoin rallied above the $30,000 level for the first time since June 2022 following a spate of turmoil in the banking sector that led many investors to shy away from traditional investments.
The top digital token has been on a tear over the past month, with some traders viewing it as a safe haven play due to concerns over the stability of the financial industry.
Hopes that the Fed will also back away from its cycle of aggressive interest rate hikes have also boded well for Bitcoin and other cryptocurrencies. The sharp jump in borrowing costs took out more than two-thirds of the total crypto market capitalization last year.
Today’s gains, which bring the year-to-date increase in Bitcoin to about 80%, have pushed up the total market capitalization of cryptocurrencies to $1.4 trillion.
3. Alibaba’s answer to ChatGPT
China’s Alibaba (HK:9988) has entered the race to roll out a new artificial-intelligence-powered chatbot similar to ChatGPT, as chairman and CEO Daniel Zhang moves to take advantage of what he described as a “watershed moment” in global technology.
In a formal announcement at an event on Tuesday, the sprawling e-commerce conglomerate’s cloud unit did not unveil a timeline for the development of the product, which will be called Tongyi Qianwen. But businesses across Alibaba, it said, will be able to utilize the chatbot in the “near future.”
Tongyi Qianwen will have the ability to process information in both Chinese and English and will be used on Alibaba’s DingTalk workplace communication software and Tmall Genie smart speakers.
Alibaba is not the first player from China’s burgeoning tech industry to try its hand at creating a rival to ChatGPT. Peers NetEase (HK:9999) and Baidu (HK:9888) have also said they plan to harness generative AI, which can learn from data to closely duplicate human work.
4. Fresh IMF growth projections
The International Monetary Fund is set to publish its latest world economic outlook later today, followed by a presentation – and policy recommendations – from chief economist Pierre-Olivier Gourinchas.
IMF managing director Kristalina Georgieva has already flagged that output will be sluggish over the next five years, with worldwide economic growth projected to be at around 3% annually – the weakest medium-term estimate since 1990 and well below the average of about 3.8% seen over the past two decades.
In a speech last week, Georgieva cited concerns over geopolitical tensions and the splintering of major economies into rival trading blocs.
The path back to robust growth, she warned, was “rough and foggy.”
5. Oil gains ahead of U.S. crude inventory data
Oil prices moved up on Tuesday, with traders eyeing expectations that inventory levels in the U.S. – the world’s largest crude consumer – will slip again.
By 03:44 ET, U.S. crude futures traded 0.66% higher at $80.27 a barrel, while the Brent contract climbed 0.55% to $84.64.
The American Petroleum Institute, an industry body, is due to release its weekly data on U.S. crude stockpiles later on in the session. The figures are projected to show that there was another fall from last week’s decline of more than 4 million barrels.
Crude prices have also been boosted this month by a surprise decision from OPEC and its allies to slash production by around 1.16 million barrels a day starting in May.