As of Thursday's stock market close, the Dow Jones Index (US30) was up by 0.97%. The S&P 500 Index (US500) added 1.25% yesterday. The NASDAQ Technology Index (US100) closed positive by 1.30%. Stocks closed higher on Thursday, recovering most of Wednesday's sharp losses when Fed Chair Powell said he did not see a Fed rate cut in March. Thursday's Fed-friendly economic reports lowered the 10-year T bond yield to a 5-week low and supported stocks. Stocks extended gains amid improving prospects for a soft landing after January's ISM manufacturing index unexpectedly rose to a 15-month-high.
Shares of large technology companies are the most influential on Wall Street because they are the largest and have high expectations after soaring much more than the rest of the market last year. Meta (META) shares jumped by 15% in extended trading after the company reported strong quarterly results, announced its first-ever quarterly dividend, and authorized a $50 billion share repurchase program. Amazon (AMZN) also rose by 7% on better-than-expected earnings and revenue, while Apple (AAPL) fell by 3% after reporting lower sales in China.
US weekly initial jobless claims unexpectedly rose by 9,000 to a 2-month high of 224,000, indicating a weaker labor market than expectations of a decline to 212,000.
Equity markets in Europe were mostly down yesterday. Germany's DAX (DE40) fell by 0.26%, France's CAC 40 (FR40) fell by 0.89%, Spain's IBEX 35 (ES35) fell by 0.63% on Thursday, and the UK's FTSE 100 (UK100) closed negative by 0.11%.
Adidas (ADS) was down by nearly 2% as its forecast to double its operating profit by 2024 failed to materialize. However, Deutsche Bank (DB) provided some positive news, reporting a fourth-quarter net income of €1.3 billion, which beat expectations. The bank now plans to increase share buybacks and dividends by 50%, returning €1.6 billion to shareholders. As for economic data, Eurozone inflation fell in line with expectations to 2.8%, but the core rate beat expectations to 3.3%.
Gold held above $2,050 an ounce on Friday and gained nearly 2% this week as the dollar and Treasury bond yields declined amid firm expectations of lower US interest rates this year. Those expectations persisted even after Federal Reserve Chairman Jerome Powell said a rate cut in March "is not a base case" and reiterated a commitment to keep rates at current levels until it is clear that inflation is moving toward the 2% target. There is now a 38% probability of a Fed rate cut in March, down significantly from over 70% a month ago.
WTI crude futures fell sharply from $77 to $74 a barrel on Thursday as signs of easing tensions in the Middle East eased fears of supply disruptions. Reports emerged that a cease-fire agreement between Israel and Hamas was in the works, with Hamas saying it was considering the deal. Traders had hoped the Gaza truce would stop Houthi attacks on Red Sea ships that have disrupted global trade and oil flows from the region. However, a Qatari official said there is no agreement in place at the moment. Meanwhile, OPEC+ maintained its current production policy, maintaining a 2.2 million barrels per day production cut in the first quarter.
Asian markets traded higher yesterday. Japan's Nikkei 225 (JP225) was up by 0.76%, China's FTSE China A50 (CHA50) was down by 0.43%, Hong Kong's Hang Seng (HK50) added 0.38% on the day, and Australia's ASX 200 (AU200) was positive by 0.36%.
Australia's final demand producer price index rose by 0.9% quarter-on-quarter in Q4 2023, slowing after a year-to-date high of 1.8% in Q3. This was the 14th consecutive period of growth due to high crude oil and energy prices.
S&P 500 (US500) 4,906.19 +60.54 (+1.25%)
Dow Jones (US30) 38,519.84 +369.54 (+0.97%)
DAX (DE40) 16,859.04 −44.72 (−0.26%)
FTSE 100 (UK100) 7,622.16 −8.41 (−0.11%)
USD Index 103.05 +0.01 (0%)
- – Australia Producer Price Index (m/m) at 02:30 (GMT+2);
- – US Nonfarm Payrolls (m/m) at 15:30 (GMT+2);
- – US Unemployment Rate (m/m) at 15:30 (GMT+2);
- – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2).
by , 2024.02.02
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