Yesterday, the US stock indexes kept losing ground. Quarterly results were below expectations, and there is growing concern that the Federal Reserve will stay hawkish for some time because the job market isn’t showing any signs of slowing down. The Dow Jones Index (US30) and the S&P 500 Index (US500) both saw declines when the stock market came to an end yesterday. On Thursday, the NASDAQ Technology Index (US100) fell by 0.96%.
In the US, some 190,000 people last week submitted jobless claims, far fewer than the 214,000 claims predicted by experts. The US Federal Reserve has the capacity to hike rates further due to the robust job market.
Lael Brainard, a Fed spokeswoman, stated on Thursday that the Fed intends to continue tightening monetary policy and keep rates quite restrictive for some time to ensure inflation returns to the Central Bank’s 2% target.
Although the number of new members beat forecasts, Netflix’s fourth-quarter earnings fell short of net income projections. Much more than the 4.6 million predicted, the business attracted 7.66 million users. Following the report’s release during the evening session, the company’s shares increased by 7%.
Tesla (TSLA) fell 1% yesterday as investors worried that the electric carmaker’s quarterly earnings would fall short of forecasts due to declining demand and manufacturing delays in China.
The share price of Norwegian Cruise Line (NCLH) is down more than 4%. The cruise line issued a warning that it anticipates recording net losses for both the current quarter and the entire year.
The majority of European stock markets closed yesterday. The DAX (DE30) in Germany dropped by 1.72%, the CAC (FR40) in France dropped by 1.86%, the IBEX (ES35) in Spain lost -1.60%, and the FTSE (UK100) in Britain finished down by 1.07%.
The job market in Europe has never been as active as it is right now, according to ECB chief Christine Lagarde, and the outlook for the economy is considerably better. Analysts believe that the ECB will increase rates by 50 basis points in February and March and by another 25 basis points in May, followed by a brief break. This is in response to the most recent statistics on inflation in the Eurozone.
The level of consumer confidence in the UK is at an almost 50-year low. According to GfK research, the stress on household finances has increased as a result of concerns about the economy and a dramatic increase in the cost of living. The discretionary income of households has been dwindling as a result of recent sharp increases in energy and food costs. Treasury Secretary Jeremy Hunt and Prime Minister Rishi Sunak cancelled a two-year household energy programme that would have kept yearly expenses under £2,500.
Ukraine’s situation is becoming more volatile. Russian intelligence reports that it is getting ready to launch a massive military onslaught against Ukraine in the upcoming weeks. The Western allies have increased their involvement in sending armaments, particularly tanks, for this purpose. Today, at a crucial NATO conference in Ramstein, it will be decided how much money and what types of weaponry to send Ukraine to protect her borders. Despite suffering significant losses in positional combat over the previous two months, the front line has mostly remained stationary and neither side has made any advances.
On Thursday, oil prices increased by nearly 1%, even as stocks increased. In its weekly report, the Energy Information Administration, or EIA, said that US oil stocks had increased by 8,408 million barrels for the week. Optimism over China’s openness is the fundamental cause of the increase. China’s oil consumption has increased by almost 1 million BPD from the previous month. According to the International Energy Agency, if China removes its barriers and limitations, global oil consumption might hit a record high in 2023.
Yesterday’s natural gas closing price was at a 2021 low. As a result of Europe’s pleasant winter, gas usage fell significantly, which, given the present supply, puts downward pressure on prices. However, by the last week of January, the Global Forecast System (GFS) and the European ECMWF model predicted colder short-term temperature projections. This can result in a brief increase in pricing.
Yesterday’s trading on Asian markets was completely static. On Thursday, the Nikkei 225 index of Japan fell by 1.44%, the FTSE China A50 index of China rose by 0.15%, the Hang Seng index of Hong Kong dropped by 0.12%, the NIFTY 50 index of India went down by 0.32%, and the S&P/ASX 200 index of Australia rose by 0.57%.
The national core CPI for Japan increased from 3.7% to 4.0% year over year, reaching a 41-year high. Rising inflation in Japan increases the chance that the central bank will change its stance to tighten the cycle in the spring.
S&P 500 (F) (US500) 3,898.85 −30.01 (−0.76%)
Dow Jones (US30) 33,044.56 −252.40 (−0.76%)
DAX (DE40) 14,920.36 −261.44 (−1.72%)
FTSE 100 (UK100) 7,747.29 −83.41 (−1.07%)
USD Index 102.07 −0.29 (−0.29%)