Macroeconomic/ geopolitical developments
- The focus last week switched from the big macro data and events of the prior two weeks (Fed Minutes, US Employment and US CPI), with the focus shifting to the US earnings season.
- Earnings season for Q1 continued with the financial sector, which saw mixed results, as Morgan Stanley posted an upbeat outlook, whilst Goldman Sachs was more negative.
- Netflix earnings missed earnings estimates, but on new subscribers, often seen as a bellwether for the US and global consumer, which pushed the stock higher Friday.
- Although still to report earnings, Alphabet the parent company of Google, announced a cut in its workforce by 6%, which boosted Alphabet shares up on Friday too.
- Retail Sales data was the main macro focus from the US on Wednesday, which missed analyst projections, posting a fall for 1.1% for December. US PPI fell 0.5% in December, the biggest drop since early in the pandemic.
- The Bank of Japan made no policy changes at its meeting last week, although markets had anticipated another shift to slightly more hawkish after December’s Yield Curve Control tweak.
Global financial market developments
- The major US, European and Asian stock averages were mixed last week, with only modest losses at worst after the solid start 2023.
- Growth stocks were the leaders higher with lower global yield (see below), which saw the Nasdaq post a third successive week of gains.
- US and European Bond yields fell further.
- The US Dollar Index marked time, just nudging lower after the recent plunge as the US currency remains weak across the Forex board, near multi-month lows in many places.
- Gold pushed higher again to build on the 2023 surge, to hit another new multi-month high.
- Oil prices posted a second week of strong gains, to eliminate the plunge seen in early 2023, further easing bigger negative pressures.
- Copper prodded higher to build on the early 2023 surge out of a broader range phase to another new multi-month high.
Key this week
- Central Bank Watch: The Bank of Japan Meeting Minutes are released Monday, on Wednesday we get the Bank of Canada (BoC) interest rate decision
- Macroeconomic data: Focus this week will be on the Flash PMI global data from S&P Global and US GDP, PCE, Durable and Capital Goods Orders released Thursday and Friday.
- Earnings data: Q1 earnings season continues with a busy week in the US, with the focus on Microsoft, Johnson & Johnson, Verizon, Texas Instruments, Tesla, ASML, IBM, Boeing, and Intel.
|Key Macroeconomic Events
|BoJ Meeting Minutes; EU Consumer Confidence
|Flash PMI global drive from S&P Global
|Australian CPI; German IFO; BoC interest rate decision
|US GDP, PCE, Durable and Capital Goods Orders