Oil continues to fall in price. The Australian dollar reached the maximum for 5 weeks

By the end of Thursday, the Dow Jones Index (US30) added more than 400 points and closed positive 0.92%. The S&P 500 Index (US500) gained 0.53% and hit a new record high, breaking the 6,100 mark. The Nasdaq Technology Index (US100) added 0.22%. Favorable corporate earnings results supported the overall market on Thursday. General Electric (GE) closed higher by more than 6% after reporting fourth-quarter adjusted earnings per share and announcing $7 billion in share repurchase plans. Moderna (MRNA) shares rose more than 10% and led the S&P 500 higher, adding to a 7% rally Wednesday after Oracle CEO Ellison spoke about the promise of artificial intelligence in early cancer diagnosis and the development of cancer vaccines. Netflix (NFLX) shares closed higher by more than 3% after Wolfe Research upgraded the stock to “outperform” from “perform” with a price target of $1,100. Electronic Arts (EA) fell more than 16% and topped the list of losers in the S&P 500 and Nasdaq 100 after the company reported preliminary third-quarter net revenues of $2.22 billion, weaker than consensus of $2.51 billion, and lowered its full-year net revenue guidance.

President Donald Trump reiterated in Davos his previous promises of tax cuts, tariffs on trading partners and increased energy production, and called on the Federal Reserve and other major central banks to cut interest rates. As for economic data, weekly US initial jobless claims rose 6,000 to a 6-week high of 223,000, indicating a weaker labor market than expected at 220,000.

The Mexican peso (USD/MXN) exchange rate rose to 20.4 per USD as the latest inflation data bolstered hawkish arguments from Bank of Mexico officials, dampening expectations of further monetary policy easing. While Mexico’s annual core inflation fell to 3.69% in mid-January, the lowest in four years, core inflation rebounded to 3.72%, beating estimates of 3.68%, signaling continued price pressures.

Equity markets in Europe were mostly up on Thursday. Germany’s DAX (DE40) rose by 0.74%, France’s CAC 40 (FR40) closed up 0.70%, Spain’s IBEX 35 (ES35) added 0.92%, and the UK’s FTSE 100 (UK100) closed positive 0.23%. In Europe, Puma shares fell about 20% after the German sportswear brand reported lower-than-expected fourth-quarter sales and lower annual profit, missing its 2024 earnings target.

The Bank of Norway decided to leave the discount rate at 4.5% on January 22, matching market expectations, but the head of Norges Bank said a rate cut is possible in March. Unemployment has risen slightly, but inflation is close to target. Although inflation is lower than expected, rising business costs may spur it again.

WTI crude oil fell to $74 a barrel on Thursday as President Donald Trump delivered a virtual speech at the Davos forum. In his speech, Trump announced plans to ask Saudi Arabia and OPEC to lower oil prices, emphasizing his administration’s energy priorities. Meanwhile, crude inventories fell by 1.02 million barrels, below market consensus that expected a 2.1 million barrel decline, and extended a 2 million barrel drop from the previous week.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) added 0.79%, China’s FTSE China A50 (CHA50) rose by 0.64%, Hong Kong’s Hang Seng (HK50) gained 0.40%, and Australia’s ASX 200 (AU200) was negative 0.61%.

S&P Global’s Australian manufacturing PMI rose to 49.8 in January 2025 from 47.8 in December, according to flash data. This is the highest reading in 12 months, following 13 consecutive months of contraction. The index of business activity in the services sector fell to 50.4 in January 2025 from 50.8 in December 2024, according to flash data. That’s the lowest reading in six months, suggesting the sector’s growth is slowing. The Australian dollar climbed above $0.63 on Friday, hitting a five-week high after US President Donald Trump said after speaking with Chinese President Xi Jinping that he would prefer to strike a trade deal with China rather than impose tariffs. Given the close economic ties between Australia and China, it could have a significant impact on Australian markets. Trump also called on the US Federal Reserve to lower interest rates.