Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
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The NASDAQ, S&P 500, and Dow Jones have all achieved new record highs, signaling a complete reversal of the recent stock market dip from December to early January.
In Japan, the Nikkei 225 has hit a fresh 34-year high, while China’s Hang Seng is experiencing ongoing weakness, attributed to a battle between the Federal Reserve (Fed) and the financial markets.
The Fed is attempting to talk down interest rates, but market expectations for rate cuts persist, leading to a positive overall sentiment despite some success in lowering rate cut expectations.
A “Fed blackout period” is currently in effect, with no speeches or comments from Fed members expected ahead of the FOMC meeting on January 31st, creating a quieter news period related to the Fed.
Turning to the US dollar, it is trading around a 50% retracement level, with the 200-day and 50-day moving averages serving as significant support and resistance levels.
The US Core PCE, the Fed’s preferred measure of inflation, is anticipated to be a major event for the dollar during the week, potentially influencing its performance.
In the Eurodollar market, trading within small ranges is supported by the 200-day simple moving average, and upcoming factors such as the German and Eurozone PMIs, along with the ECB monetary policy meeting, could play a crucial role in shaping Eurodollar performance in the coming week.
STOCK MARKET:
The ongoing equity rout in China has led to an unprecedented $38 trillion gap between the market capitalization of the US stock market and that of Hong Kong and China combined, setting a new record.
Michael Liang, Chief Investment Officer at Foundation Asset Management HK Ltd., notes that while China presents value, the lack of catalysts is hindering its performance, while the US market benefits from momentum and a favorable economy.
Global investor sentiment toward China is painted negatively as steep losses continue, contrasting with US stocks that have reached record highs, fueled by a technology rally and optimism about potential Federal Reserve interest rate cuts.
Since February 2021, Chinese stocks have witnessed a loss of over $6.3 trillion in market value, while US equities have gained $5.3 trillion over the same period.
Doubts over Beijing’s long-term economic agenda and strategic competition with the US are contributing to what started as a performance-driven exodus potentially becoming a structural shift.
Bloomberg strategists, including Kumar Gautam, suggest that China’s correction might continue, estimating a 51% probability of the MSCI China Index trading below its peak for an average of 35 months.
Despite the prolonged rout, some investors see potential for a technical rebound due to attractive valuations. The MSCI China Index is now 60% cheaper than the US equity benchmark based on earnings-based valuations.
The MSCI Inc.’s key gauge for Chinese equities trades at about eight times 12-month forward estimated earnings, significantly lower than the S&P 500 Index’s 20 times.
Currently, there is little indication of an end to the challenging start of 2024 for Chinese equities, with a gauge of Chinese stocks listed in Hong Kong already losing 13%, making it the worst-performing major global benchmark index in less than a month.
Chinese stocks listed in Hong Kong already losing 13%, making it the worst-performing major global benchmark index in less than a month.
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Written on January 23, 2024 at 10:02 am, by anakin
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
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The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
US equities, including the S&P 500 and Dow Jones, reach fresh all-time highs, propelled by a robust performance in big tech stocks.
The ongoing Q4 earnings season, especially results from the ‘Magnificent Seven’ companies, is anticipated to further boost US indices.
Notably, Microsoft alone holds a significant 7.29% weighting in the S&P 500 index.
US Dollar Performance:
The US dollar initiates the year with strength, attributed to Federal Reserve Members countering overly optimistic interest rate cut expectations.
US Treasury yields support the USD against various currencies.
Precious metals, particularly gold, face pressure as they test the $2,000/oz. level.
Upcoming Events and Releases:
A multitude of Q4 US earnings releases is scheduled for the upcoming week.
Key economic events include the closely monitored Bank of Japan Quarterly Outlook Report, significant given elevated USD/JPY levels.
Thursday brings the European Central Bank (ECB) policy decision, while Friday features the US core PCE release, positioning them as the week’s main attractions.
Monday
Economic data: Leading Index, December (-0.3%, expected, -0.5% prior)
Earnings: United Airlines, Logitech, Zions Bancorporation Top of Form
STOCK MARKET:
Market Highlights:
US equities achieve new record highs with S&P 500, Dow Jones, and Nasdaq Composite in positive territory for January.
Consumer sentiment data from the University of Michigan boosts positive vibes as consumers express confidence in the economy.
Corporate Earnings:
Tech results take center stage with Netflix (NFLX) earnings on Tuesday and Tesla (TSLA) on Wednesday.
Other notable reports include Johnson and Johnson (JNJ), United Airlines (UAL), Verizon (VZ), and AT&T (ATT).
Overall, one of the busiest weeks for quarterly reports on Wall Street.
Economic Data:
First reading of Q4 economic growth expected on Thursday.
Release of the Personal Consumer Expenditures (PCE) Index, the Fed’s preferred inflation gauge, scheduled for Friday.
Economic Growth Outlook:
Resilient data indicates a potential 2% annualized growth in the US economy for Q4.
Oxford Economics expresses confidence in the ongoing economic expansion, citing a strong labor market, deceleration in inflation, and looser financial conditions.
Inflation and Rate Cut Speculations:
Key debate centers on when the Federal Reserve will cut interest rates.
Investors shift from an 81% chance of a March rate cut to 49%.
Goldman Sachs chief economist anticipates a March rate cut, driven by a decline in inflation to the target of 2%.
Upcoming Events:
Federal Reserve in blackout period, focusing attention on earnings as a key driver of stock market sentiment.
Technology earnings, particularly from large-cap companies, may influence short-term market direction.
Focus on Netflix demand for new advertising tier and Tesla’s margins, with CEO Elon Musk’s comments under scrutiny.
Fourth quarter earnings show a weak start, but the narrative is expected to shift to Technology and Communication Services, where growth is anticipated.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Recent decisions by central banks have significantly influenced global markets. In December 2023, the Bank of Japan (BoJ) and the Bank of Canada maintained key interest rates, while the European Central Bank (ECB) sustained multi-year high rates to combat inflation. Analysts expect these measures to continue. Key economic indicators, including manufacturing and services sector data, GDP, and inflation figures, will provide insights into the near-term market outlook.
Bank of Japan Rate Statement (23 January 2024)
In the final meeting of the year, the Bank of Japan (BoJ) unanimously decided to maintain its key short-term interest rate at -0.1% and 10-year bond yields at around 0%. Analysts are anticipating that the central bank will continue with the current interest rate levels in its upcoming meeting on January 23, 2024.
Bank of Canada Rate Statement (24 January 2024)
In December 2023, the Bank of Canada kept the overnight rate at 5%, marking the third consecutive meeting with unchanged rates. Analysts project a continuation of the current levels.
European Central Bank Rate Statement (25 January 2024)
In the European Union, the European Central Bank (ECB) sustained interest rates at multi-year highs for the second consecutive meeting in December 2023. This included signaling an early conclusion to its remaining bond purchase scheme as part of efforts to combat high inflation. Analysts are expecting a continuation of these interest rate levels at the ECB’s upcoming meeting on January 25, 2024.
Flash Manufacturing PMI (24 January 2024)
Turning to economic indicators, Germany’s manufacturing Purchasing Managers’ Index (PMI) increased from 42.6 to 43.3 between November and December 2023. In contrast, the UK and the US saw decreases in manufacturing PMIs, from 47.2 to 46.2 and 49.40 to 47.90, respectively. Forecasts for January 24, 2024, indicate anticipated manufacturing PMIs of 43.7 for Germany, 46.7 for the UK, and 47.6 for the US.
Flash Services PMI (24 January 2024)
Shifting to the services sector, Germany experienced a decline in its PMI from 49.6 to 49.3 between November and December 2023. In the same period, the UK’s services PMI increased from 50.9 to 53.4, and the US witnessed a rise in its services PMI from 50.8 to 51.4. Forecasts for January 24, 2024, suggest expected services PMIs of 49.1 for Germany, 53.0 for the UK, and 51.0 for the US.
US Advance GDP (25 January 2024)
In the United States, the American economy expanded at an annualised rate of 4.9% in the third quarter of 2023, slightly below the 5.2% second estimate but matching the initially reported 4.9% in the advance estimate. Looking ahead to the advance GDP release for the fourth quarter on January 25, 2024, analysts expect a slower growth rate of 2%.
US Core PCE Price Index (26 January 2024)
Finally, in the realm of inflation, Core PCE prices in the U.S., excluding food and energy, recorded a 0.1% increase from the previous month in November 2023. With data for December 2023 set to be released on January 26, 2024, analysts are forecasting a growth of 0.2%.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
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