Week 04 in brief
North America
It was yet another good week for Wall Street stocks as gains across different sectors drove all indexes to weekly gains. Most Notably, Tesla rose 33% in the week, following an 11% rise on Friday, to mark its best weekly performance since May 2013 and second best on record.
Other U.S.-based electric vehicle makers saw their shares climb higher. Rivian rose 22% during the week, while shares in legacy automakers Ford and General Motors each gained more than 7%. Rival electric car manufacturer Lucid spiked on Friday as well, rising 43% on reports of rumors that Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, intended to take the company private.
How did the major indices perform?
On Friday:
- The Dow Jones Industrial Average rose 28.67 points, or 0.1%, to 33,978.08.
- The S&P 500 rose 10.13 points, or 0.2%, to 4,070.56.
- The Nasdaq composite rose 109.30 points, or 0.9%, to 11,621.71.
For the week:
- The Dow gained 1.16%
- The S&P 500 gained 2.32%
- The Nasdaq gained 4.03%.
What drove the U.S. market?
- All three major U.S. stock indexes ended the session green, with the Nasdaq, powered by mega-cap momentum stocks, enjoying the biggest gain. The S&P 500 rose 0.2% Friday, having given up much of its afternoon gain. The Nasdaq composite and the Dow also rose. American Express helped lead the way. It jumped after giving a profit forecast that topped expectations.
- While all three major U.S. stock indexes advanced, mega-cap momentum stocks, buoyed by Tesla Inc’s earnings beat and upbeat sales forecast, helped put the Nasdaq in the lead.
- Tesla has been growing in revenue year over year in the past quarter. this week it has surged 33% the highest since 2013.
- On Wednesday, members of the Federal Open Market Committee (FOMC) are poised to lift rates by 25 basis points, marking another slowdown from the 0.50% rate increase the Fed announced in December, which itself was a step down from the 0.75% pace of rate hikes seen during the prior four meetings.
What drove the U.S. market?
- All three major U.S. stock indexes ended the session green, with the Nasdaq, powered by mega-cap momentum stocks, enjoying the biggest gain. The S&P 500 rose 0.2% Friday, having given up much of its afternoon gain. The Nasdaq composite and the Dow also rose. American Express helped lead the way. It jumped after giving a profit forecast that topped expectations.
- While all three major U.S. stock indexes advanced, mega-cap momentum stocks, buoyed by Tesla Inc’s earnings beat and upbeat sales forecast, helped put the Nasdaq in the lead.
- Tesla has been growing in revenue year over year in the past quarter. this week it has surged 33% the highest since 2013.
- On Wednesday, members of the Federal Open Market Committee (FOMC) are poised to lift rates by 25 basis points, marking another slowdown from the 0.50% rate increase the Fed announced in December, which itself was a step down from the 0.75% pace of rate hikes seen during the prior four meetings.
How did Asian markets perform?
- Major Asian stock markets ended Friday with gains except for India.
- The Asia Dow, which includes blue-chip companies in the region, rose 0.72% to 3,571.68.
- Tokyo’s Nikkei 225 stock exchange increased 0.07% to close at 27,382.56.
- Core consumer prices in Japan’s capital Tokyo surge 4.3% year-on-year in January, more than estimates, nearing a 42-year high.
- The Hang Seng, the benchmark for blue-chip stocks trading on the Hong Kong stock exchange, rose 0.54% to 22,688.90. points.
- The Singapore benchmark index added 0.50% to 3,394.21 points.
- The Indian Sensex benchmark, on the other hand, dove 1.45% to 59,330.90, as Adani Group shares triggered selloffs for equities.
- After short seller firm Hindenburg Research published this week a report accusing Indian conglomerate Adani Group of fraud, the company has erased more than $50 billion of its market value since Wednesday.
- Due to the Lunar New Year holidays, indexes are closed in China throughout the week.
Bonds and Commodities
- Oil prices reversed earlier gains as indications of strong Russian oil supply offset better-than-expected U.S. economic growth data, strong middle distillate refining margins, and hopes of a rapid recovery in Chinese demand.
- U.S. crude futures slipped $1.33 to settle at $79.68 a barrel, while Brent settled down 81 cents at $86.66.Brent fell 1.1% on the week after rallying almost 12% over two previous weeks. January-to-date, the global crude benchmark rose less than 1%.
- Gold prices steadied, with gains capped by the stronger dollar.
- Spot gold % to $1,928.37 an ounce.
- Treasury yields rose after Japanese inflation data surprised on the upside. Core consumer prices in Tokyo, a leading indicator of nationwide trends in Japan, increased 4.3% in January from a year earlier, marking the fastest annual gain in nearly 42 years.
- The yield on 10-year US Treasury notes rose 2.5 basis points to 3.516%.
Currencies
- The dollar clung to modest gains against the euro on Friday after data showed falling U.S. consumer spending and cooling inflation, and as investors awaited a slew of central bank meetings next week.
- Against the yen, the dollar was 0.25% lower at 129.89 yen as hot Tokyo inflation readings spurred bets that a hawkish pivot from the Bank of Japan (BOJ) could be in the offing.
- Sterling slipped 0.10% to $1.2393 on investor unease that a British slowdown may prompt the BoE to end its tightening cycle soon, a move that could weaken the pound in the short term.
- The euro slid 0.22% to $1.0865, just off from a nine-month high of $1.09295 it touched on Monday.
Next week
Next week will be an eventful one, with big tech earnings, the U.S. labor market, and FOMC’s policy meeting taking center stage. We can expect earnings from some of the largest companies in the world, including big tech firms Apple, Google, Amazon, and Meta Platforms. ExxonMobil, Pfizer, UPS, McDonald’s, Caterpillar, Starbucks, and automakers Ford and General Motors will also report next week, among many others.
The latest reports on the labor market will arrive next week, including the December JOLTS report, ADP’s National Employment Report tracking private sector payrolls, and the January nonfarm payrolls report. The Federal Open Market Committee (FOMC) will gather for its first policy meeting of 2023, where it is widely expected to raise interest rates by 25 basis points.
We will also receive the latest updates on home prices, with the Case-Shiller National Home Price Index for November, as well as PMI readings from the Institute for Supply Management (ISM).