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Market Insights

Market Insights - Week 2

Anupam Kumar

Date – 09th Jan’23

On Friday, January 6, 2023, monthly job reports were announced, showed a slowdown in wage growth (i.e., potentially easing inflationary pressures) and proved to be a positive catalyst for the stock market. The S&P 500 and Nasdaq snapped three-week losing streaks and started the new year with a gain. Communication services, Netflix and Facebook parent Meta platforms helped with big rallies.

Let us highlight some of the significant movements of the last week:

  • The tech-heavy Nasdaq Composite index added 102.81 and closed at 10,569.29 over the week which made it gain 0.98% YTD (year to date).
  • S&P 500 and DJIA also gained 55.58 and 483.36 points to close at 3,895.08 and 33,630.61 respectively.
  • Year to date percentage change in Dow Jones Industrial average (DJIA) became 1.46% and the S&P 500 index stood at 1.45% over the last week.
  • The yield of the 10-year U.S. Treasury reversed its course from previous week’s 3.88% and fell to 3.56% at the end of the week following Friday’s labor market report.
  • As per the latest Government report in the United States, jobs growth exceeded expectations and generated 223,000 new jobs in December’22. Overall, the economy generated 4.5mn jobs in 2022, the second highest annual record after 6.7mn in 2021. The news came towards the end of the week, provided fuel for the handsome jump in the market on Friday 6th of Jan’23.
  • In Europe, data indicated that the pace of inflation has slowed and the cost of natural gas also fell to the levels seen before the Russia-Ukraine conflict.
  • The Germany’s DAX ended the week 4.93% higher, the pan-European STOXX Europe 600 added 4.60%, France’s CAC 40 Index advanced 5.98%, Italy’s FTSE MIB gained 6.22% and the UK’s FTSE 100 index climbed 3.32% over the last week.
  • Last week for the Japanese Equity market were negative and the Nikkei 225 Index lost 0.46% whereas, the broader TOPIX Index shed 0.84% over the week.
  • The yield on the 10-yr. Japanese Govt bond climbed to 0.42% over the last week closed on 6th of Jan’23.
  • In anticipation of further hawkishness by the US Federal Reserve, the yen weakened to around JPY 134.1 against the US dollar from JPY 131.1 the prior week.
  • Amid the news of re-opening Hong Kong border to the mainland China, the broad, capitalization-weighted Shanghai Composite Index gained 2.21% and the blue-chip CSI 300 Index advanced 2.82% as per the reports.

A consumer Price Index report is scheduled to be released on coming Thursday and it will throw some more light to the path of moderating inflation.

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Anupam Kumar

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