Yesterday, the US stock markets increased. The Dow Jones Index (US30) and the S&P 500 Index (US500) both saw gains at the close of trading on Tuesday. The US100 NASDAQ Technology Index increased by 1.67%. The results of several enterprises have been evaluated by investors, and they have often exceeded expectations. However, US economic indices are still falling. The research shows that consumers have grown less hopeful about employment prospects and predict a deterioration of business conditions in the near future. Consumer confidence decreased in January from 109 to 107.1.
After beating Wall Street expectations in the fourth quarter and providing a better-than-expected year forecast, General Motors’ (GM) shares increased by more than 7%. Shares of heavy equipment manufacturer Caterpillar (CAT) dropped more than 3% after its fourth-quarter profits fell short of Wall Street forecasts. In order to prepare for a “difficult macroeconomic climate,” payments processor PayPal (PYPL) has revealed intentions to fire 2,000 people, or around 7% of its staff.
The largest IT companies’ next earnings are awaited by investors. As soon as today, Meta Platforms (META) will report. Alphabet (GOOGL), Apple (AAPL), and Amazon.com (AMZN) will also release financial results on Thursday.
A crucial monetary policy meeting of the US Federal Reserve will take place today. Prices have already increased as a result of the Fed’s anticipated rate rise of 0.25%. Therefore, 30 minutes following the rate release, investors’ attention will mostly be on Fed Chairman Jerome Powell’s remarks. Investors will be watching for signs of the Fed’s next move, such as whether it will keep raising rates or whether this increase would signal the end of the tightening cycle and the start of a protracted pause.
Yesterday’s trading on European equity markets was flat. The German DAX (DE30) rose 0.01% on Tuesday, while the French CAC 40 (FR40), the Spanish IBEX 35 (ES35), and the British FTSE 100 (UK100) all concluded Tuesday’s trading down slightly.
The eurozone economy once again displayed resilience in the face of the energy crisis and the inflationary crises that followed. The latest quarter saw a 0.1% increase in the eurozone’s GDP. However, the majority of economies are now growing at a very slow pace. As the two largest industrialised nations, Germany and Italy have had modest reductions as a result of being the worst impacted by the energy crisis, although France and Spain have managed to experience modest growth rates. The growth momentum is declining despite the little rise, and the following quarter is probably going to show a decrease.
According to the British Retail Consortium, shop pricing inflation increased to 8%, the highest level since 2005. Even while the overall UK inflation rate is starting to drop, consumer prices have been continuously rising. Consumers are spending less on secondary items as a result of higher food prices.
The Iranian organisations that Washington claims are engaged in the delivery of drones to Russia are now subject to a wider range of penalties from the United States.
The price of natural gas has dropped further and is now at a 21-month low. After an exceptionally mild start to the winter of 2022–2023, which decreased demand for heating fuel, gas prices began to decline. However, the region is expected to see much cooler temperatures in the near future, which will boost usage. In turn, rising demand (consumption) will exert upward pressure on prices.
The EIA, or Energy Information Administration, announced late yesterday that there was higher demand for crude oil and processed products, which helped to strengthen oil prices. Additionally, production quotas for the following two months will be approved at an OPEC+ meeting today. Nothing unexpected is anticipated, and manufacturing is anticipated to continue as planned. The revelation of data on strategic reserves will, however, cause the price of oil to fluctuate more.
The majority of Asian markets were down yesterday. China’s FTSE China A50 (CHA50) lost 1.27%, Hong Kong’s Hang Seng (HK50) finished the day down by 1.03%, India’s NIFTY 50 (IND50) increased by 0.07%, and Australia’s S&P/ASX 200 (AU200) finished the day down by 0.07%. Japan’s Nikkei 225 (JP225) is down by 0.39%.
The third consecutive month has seen a decline in factory activity in Japan. Japanese businesses are being pressured to raise wages amid deteriorating global economic circumstances in order to combat inflation and aid the third-largest economy’s recovery.
The employment situation in New Zealand is beginning to slow down. With quarterly job growth falling short of expectations, the unemployment rate increased from 3.3% to 3.4%. In light of this, the central bank may delay the rate of interest rate increases.
S&P 500 (F) (US500) 4,076.60 +58.83 (+1.46%)
Dow Jones (US30) 34,086.04 +368.95 (+1.09%)
DAX (DE40) 15,128.27 +2.19 (+0.014%)
FTSE 100 (UK100) 7,771.70 −13.17 (−0.17%)
USD Index 102.06 −0.22 (−0.21%)