The hawkish message from Federal Reserve officials continued to dominate the market on Thursday. The major takeaway from policymakers is that further rate increases are imminent and that the rate should stay high for a considerable amount of time. The 2-10 Treasury yield curve has inverted by 85 basis points, the steepest inversion since the early 1980s, creating new concerns about economic woes despite the fact that the statements made here are not new. The Dow Jones Index (US30) and the S&P 500 Index (US500) both saw declines as the stock market came to an end on Thursday. Yesterday’s loss in the NASDAQ Technology Index (US100) was 1.02%.

In a reorganization plan unveiled by Walt Disney, 7,000 employees would be eliminated, saving the company up to $5.5 billion. In a report issued on Thursday, PayPal Holdings Inc. (PYPL) reported fourth-quarter profits that were above analysts’ expectations. Following the close of the market, shares of PayPal Holdings Inc. increased by 7.04%. Analysts were let down by LYFT’s (LYFT) fourth-quarter results, which were disclosed in a report on Thursday. On the news, the company’s shares dropped more than 22%.

Yesterday, European stock markets were largely in the green. On Thursday, the DAX (DE30) in Germany rose by 0.33%, the CAC 40 (FR40) in France rose by 0.96%, the IBEX 35 Index (ES35) in Spain increased by 0.18%, and the FTSE 100 (UK100) rose by 0.33%.

British families will continue to suffer this year, according to the National Institute of Economic and Social Research’s (NIESR) most recent assessment on the economy. NIESR anticipates a 0.3% decline in UK GDP for the fourth quarter. Governor of the Bank of England Andrew Bailey advised employees and businesses to take this year’s anticipated strong decline in inflation into account when negotiating salary agreements. Bailey said before a parliamentary committee on Thursday that the Monetary Policy Committee’s worry about escalating inflation and the need for greater indications of labor market softening are reflected in the ongoing tightening. Due to strong drops in wholesale energy costs, import prices, and reducing demand as a result of falling personal income, the bank anticipates inflation to start rapidly declining from the middle of 2023 and will be roughly 4% by the end of the year.

According to information released on Wednesday by the US Energy and Information Administration (EIA), weekly crude oil inventory levels are at their highest point since June 2021. A peak in production hasn’t been observed since April 2020. Yesterday, oil prices rose even as stocks increased. The increasing demand from China as a result of Fitch Ratings raising its prediction of China’s economic growth for 2023 from 4.1% to 5% is what is causing the confidence about growth. Fitch attributed the increase to data from the January services PMI index and the fourth quarter of 2022’s real GDP.

Yesterday, Asian stock markets were mainly up. Yesterday, the Nikkei 225 in Japan (JP225) fell by 0.08%, the FTSE China A50 in China (CHA50) gained 1.24%, the Hang Seng in Hong Kong (HK50) rose by 1.60%, the NIFTY 50 in India (IND50) rose by 0.12%, and the S&P/ASX 200 in Australia (AU200) fell by 0.53%.

It’s likely that Haruhiko Kuroda’s replacement will be chosen the following week. If Yamaguchi, the former deputy governor of the Bank of Japan, were to become the prime minister of Japan, resistance would develop inside the party, according to a number of Liberal Democratic Party leaders developing inside the party, according to a number of Liberal Democratic Party leaders. In recent polls of economists, Yamaguchi’s name came in third place as a potential contender to lead the Bank of Japan. Yamaguchi is thought to be a more hardline candidate than the other candidates for the top job. Market participants anticipate that if he is nominated, it would result in severe market volatility and show that the administration is committed to a clear shift in policy towards normalization.

Friday saw an increased revision to the Australian Central Bank’s (RBA) predictions for core inflation and wage growth along with a warning about potential future interest rate increases that might increase the likelihood of a recession. The council will continue to closely monitor labor market information since it is crucial to avoid a price-wage spiral. An increase from the earlier prediction of 3.9% to 4.2% for annual wage growth is anticipated later this year. By mid-2025, however, that rate is predicted to drop to 3.8%. By mid-2025, the unemployment rate will have increased from 3.5% to 4.4% gradually. The RBA increased its prior estimate of 1.4% GDP growth to 1.6% for this year.

S&P 500 (F) (US500) 4,081.50 −36.36 (−0.88%)

Dow Jones (US30) 33,699.88 −249.13 (−0.73%)

DAX (DE40) 15,523.42 +111.37 (+0.72%)

FTSE 100 (UK100) 7,911.15 +25.98 (+0.33%)

USD Index 103.22 -0.19 (-0.18%)