Market update week 4
Over the last week, the freshly released US economic data about easing inflation and
outperforming GDP growth strengthened the prospect of a soft landing. These expectations
could be seen in the overall performance of equity markets, which reported an uptrend
despite mixed results in earnings reports.
The market closed on 01/26 with the S&P 500 up 1.09%, closing at 4,890.97 points. The
Nasdaq Composite Index closed at 15,455.36 recording a 0.10% increase, while the Dow
Jones Industrial Average has seen an uprise of 0.50%, closing at 38109.43. All three major
indexes have been rising for the third consecutive week. European stocks also recorded a
strong week, with the FTSE index up 2.32%, closing at 7,635.09, while the AEX ended the
week with a 4.19% increase at 817.74. In Asia, Tokyo’s Nikkei slid on Friday due to a tumble
in the chip sector, erasing the gains of the week, closing at 35,874.82.
Bonds and Rates
Last week, the treasury yields tweaked slightly downwards, with the 10-year yield settling at
4.15 and the 2-year yield reaching 4.34. On Thursday, the preliminary fourth-quarter GDP
report showed a 3.3% annualized growth, outperforming analyst estimates of 2%, leading to
reconsidered expectations for when the rate cuts will likely happen.
Concerning commodities, crude oil prices rose to 78 USD per barrel on Friday, the highest
price of WTI oil in two months. This surge was attributed to the increased rate of growth of
the US economy in the fourth quarter and concern for the future on the supply side as an oil
tanker was hit near Yemen, highlighting the geopolitical risks of crude oil availability. After a
slight decrease on Wednesday, the price of Gold remained relatively stable, closing at
2017.92. Still, the metal continues to stay under pressure from the growth trends of the US
economy and the reduced likeliness of a rate cut in March.
In the realm of cryptocurrencies, Bitcoin showed mixed performance, sliding in the first half
of the week, possibly influenced by FTX’s decision to sell 22 million GBTC shares with a
market value of 1 billion USD to pay creditors. This short-term correction was followed by an
uptick on Friday, closing at 41771, 0.37% up from last week.
Concerning currencies, the USD saw a downward nudge on Friday after inflation data
showed a modest increase. The greenback still closed a week with an increase against the
euro and pound, with the EURUSD and GBPUSD currently standing at 1.085 and 1.27,
respectively. The USDJPY had shown no directional convection over the last week, closing at
148.13, 0.11% down.
Flow Traders Investment Competition
January is almost over and the first month of the year has been great for most investors, but not for Floryn Vrouwen... By losing 10 spots last week they are 31st in the Flow Traders Investment Competition. It's been a better week for Hera Moneta, by having a 2.20% return they have won 8 spots and have entered the competitions' top 15. Furthermore, it has been a good week for Primus. After a poor start of the competition they have been fighting back and have almost entered the top 10. We will see what happens next week!