Moving Markets Today: Asian Shares Follow Wall Street Surge; China’s Inflation Decline Hits Fastest Pace Since 2009; Oil Edges Up; Focus on Earnings, Fed Comments, and U.S. Jobless Claims
Global stock markets reached their highest levels in over two years, with the S&P 500 hitting a fresh record peak on Wednesday. Strong corporate earnings helped offset concerns surrounding U.S. regional banks and fluctuations in China’s markets. Asian markets mirrored the positive momentum seen on Wall Street. China’s Consumer Price Index (CPI) experienced its most significant drop since 2009, signalling potential economic challenges ahead. Today, investors are focused on earnings releases from Philip Morris, ConocoPhillips, AstraZeneca, S&P Global, Take-Two Interactive, Kellanova, and Pinterest. Richmond Federal Reserve’s Barkin is scheduled to provide insights following hints from the Boston Fed regarding possible interest rate cuts. Additionally, there is anticipation of a decrease in jobless claims for the week ending February 3rd. Here are five key takeaways for your day.
China’s CPI Posts Deepest Drop Since Global Financial Crisis
China’s consumer prices continued to deflate for the fourth consecutive month in January, posing challenges for policymakers. Official data showed a 0.8% year-on-year drop in the consumer price index (CPI), the steepest in over 14 years. The CPI rose by 0.3% month-on-month, surpassing analyst forecasts. The producer price index (PPI) fell by 2.5% year-on-year in January, a slight improvement from December’s 2.7% decline. Analysts attribute deflationary pressures to declining corporate earnings and market instability.
UK Housing Market Shows Further Recovery in January: RICS
Britain’s housing market showed significant improvement in January, per a key indicator released Thursday by the Royal Institution of Chartered Surveyors (RICS), Reuters reported. New buyer enquiries surged to their highest level in nearly two years, reaching +7% from -3% in December, the strongest since February 2022. House prices, though still negative, rose to -18% from December’s -29%, marking the highest since October 2022. Economists had expected a reading of around -25%.
Fed Policymakers Show Restraint, No Haste in U.S. Interest Rate Cuts
Several U.S. Federal Reserve officials, including Susan Collins of the Boston Fed, Neel Kashkari of the Minneapolis Fed, Thomas Barkin of the Richmond Fed, and Fed Governor Adriana Kugler, shared reasons to delay interest rate cuts until they are more confident that inflation will decrease to the target of 2%. They also expressed little urgency to begin easing policy soon or to move quickly once they start, Reuters reported.
Additionally, Bank of Japan (BOJ) Deputy Governor Shinichi Uchida stated that the BOJ is unlikely to aggressively raise interest rates even after discontinuing its negative interest rate policy.
What’s Coming Up
Here’s what’s on the radar for today: A number of companies, such as Philip Morris International, ConocoPhillips, AstraZeneca, S&P Global, Take-Two Interactive, Kellanova, and Pinterest, are set to unveil their earnings reports. Richmond Federal Reserve President Tom Barkin is scheduled to deliver a speech today, following comments from Boston Fed President Susan Collins, who hinted at potential interest rate cuts “later this year.” Additionally, jobless claims for the week ending February 3rd will be announced, with economists predicting a slight decrease compared to the previous week.
S&P 500 Hits Record High Amid Tech Surge; Arm Shares Jump 20%; Bitcoin Breaks $44,500
U.S. stock markets rose, with the Dow Jones up 0.40% to close at 38,677.36, the S&P 500 gaining 0.82% to finish at 4,995.06, and the Nasdaq Composite climbing 0.95% to 15,756.64. Uber forecasted strong quarterly profits, but its stock only increased by 0.3% as it postponed capital allocation announcements. Alibaba’s U.S. shares fell due to disappointing revenue. SoftBank rose on Arm’s positive results, with its New York-listed shares jumping 19.9% after hours. In Asia, most markets followed Wall Street, with Japan’s Nikkei up 1.5% and MSCI’s Asia-Pacific index rising 0.2%. However, Hong Kong’s Hang Seng fell 0.2%, while China’s CSI300 rose 0.4% amid market stabilization efforts. Shanghai Composite gained 1%.
Treasuries remained stable, with 10-year notes yielding 4.1%, showing a 7 basis point increase for the week due to the Fed’s resistance to early rate cuts. The dollar held at 103.99 against major currencies. Oil prices rose for the third consecutive day on decreased U.S. fuel stocks and Middle East tensions. Israeli PM Netanyahu rejected Hamas’ ceasefire offer. Brent crude increased 0.3% to $76.46, while U.S. crude edged up to $74.08. Gold prices rose 0.2% to $2037.49, and Bitcoin surpassed $44,500, trading at $44,602.23.