24 Jan

Investors are waiting for tech giants’ reports. Indices are rising on lower inflationary pressures around the world

January 24, 2023

By JustMarkets

The US indices closed higher on Monday as shares of major technology companies and chipmakers were on the upside ahead of reports from tech giants. At Monday’s close, the Dow Jones Index (US30) increased by 0.73%, and the S&P 500 Index (US500) added 1.19%. NASDAQ Technology Index (US100) gained 2.01% yesterday.

Barclays Bank upgraded AMD (AMD), Qualcomm Incorporated (QCOM), and NVIDIA Corporation (NVDA) forecasts, raising shares by more than 9%, 6%, and 7%, respectively.

The Federal Reserve’s slowdown in interest rate hikes is becoming obvious. According to the latest Federal Reserve CME data, the US Federal Reserve is set to raise interest rates by 25 basis points at the FOMC meeting on February 1 and another 25 basis points at its next meeting in March. The US central bank will then hold rates until the fourth quarter. Investors also expect a US rate cut of about 50 basis points at the end of the year.

Stock markets in Europe mostly rose Monday. Germany’s DAX (DE30) gained 0.46%, France’s CAC 40 (FR40) added 0.52%, Spain’s IBEX 35 Index (ES35) jumped by 0.29%, Britain’s FTSE 100 (UK100) closed up by 0.18% yesterday.

According to Governing Council spokesman Klaas Knot, the European Central Bank should continue to raise interest rates by 0.5% at its next two meetings, and the time for slowing the pace of increases is “still a long way off.” The hawkish head of the Dutch central bank had already argued last week for the ECB to continue tightening policy, arguing that core inflation is still rising, even though the basic indicator is slowing.

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China has been setting the trend for oil prices lately. The reopening of China’s economy has led to an increase in demand, which at the current supply level has given an impulse to oil prices. This week is a holiday week in China, so oil quotes will depend on the current demand/supply and the dynamics of the dollar index. Analysts expect a spike in COVID-19 cases after the holidays as the Chinese travel freely for the first time in three years.

Asian markets mostly rose yesterday. Japan’s Nikkei 225 (JP225) added 1.33%, and China’s FTSE China A50 (CHA50) was not trading and will not trade for the rest of the week due to the holiday. Hong Kong’s Hang Seng (HK50) was also not trading yesterday, India’s NIFTY 50 (IND50) increased by 0.50%, and Australia’s S&P/ASX 200 (AU200) ended the day up by 0.07%.

In Australia, the manufacturing PMI index dipped below the 50 mark for the first time. The index fell from 50.2 to 49.8. The service sector PMI rose from 47.3 to 48.3. Tomorrow’s quarterly CPI data will be scrutinized for clues to the Reserve Bank of Australia’s interest rate decision. A survey of economists suggests that the overall Consumer Price Index will rise from 7.6% to 7.8% year-over-year. Rising inflation will undoubtedly force the RBA to act more aggressively.

S&P 500 (F) (US500) 4,019.65 +47.04 (+1.18%)

Dow Jones (US30) 33,628.84 +253.35 (+0.76%)

DAX (DE40) 15,102.95 +69.39 (+0.46%)

FTSE 100 (UK100) 7,784.67 +14.08 (+0.18%)

USD Index 102.07 +0.06 (+0.06%)

Important events for today:
  • – Australia Manufacturing PMI (m/m) at 00:00 (GMT+2);
  • – Australia Services PMI (m/m) at 00:00 (GMT+2);
  • – Japan Manufacturing PMI (m/m) at 02:30 (GMT+2);
  • – Japan Services PMI (m/m) at 02:30 (GMT+2);
  • – French Manufacturing PMI (m/m) at 10:15 (GMT+2);
  • – French Services PMI (m/m) at 10:15 (GMT+2);
  • – Germany Manufacturing PMI (m/m) at 10:30 (GMT+2);
  • – Germany Services PMI (m/m) at 10:30 (GMT+2);
  • – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
  • – Eurozone Services PMI (m/m) at 11:00 (GMT+2);
  • – UK Manufacturing PMI (m/m) at 11:30 (GMT+2);
  • – UK Services PMI (m/m) at 11:30 (GMT+2);
  • – Eurozone ECB President Lagarde Speaks at 11:45 (GMT+2);
  • – US Manufacturing PMI (m/m) at 16:45 (GMT+2);
  • – US Services PMI (m/m) at 16:45 (GMT+2);
  • – New Zealand Consumer Price Index (q/q) at 23:45 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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