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1601 2023

Market Insights

Market Insights - week 3

Anupam Kumar

With strong rebounds in growth-oriented sectors, Nasdaq composite and some mega-cap technology shares including Amazon, Microsoft and Tesla, stocks in the US market recorded a second consecutive week of gains. It was also supported by favorable key inflation data and quarterly earnings reports season, which kicked off in earnest on Friday. Banking giants, Bank of America, Wells Fargo and JPMorgan chase beat consensus expectations when they released their earnings on 13th of January’23.

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

  • The S&P 500 added 2.7% and the technology-heavy NASDAQ gained around 4.8% over the week.
  • The “traditional economy” DJIA (Dow Jones Industrial Average) rose by 672 points to close the week at 34,302.61, which is up by more than 2% and with a YTD gain of approx. 3.49%.
  • The yield of the 10-year US treasury bond tumbled to see an intraday low of 3.43% on Friday, which is its lowest since Mid of December’22.
  • As per the recent Inflation data measured by CPI (consumer Price Index) U.S. price rose at 6.5% annually in Dec’22 and it is smallest YOY increase since October 2021.
  • The VIX (Equity Volatility index) plunged close to 13%, marking the second weekly decline in a row, and is now down around 45% from a recent peak of mid-october’22.
  • The price of US crude oil reached around $80 per barrel on Friday to record a weekly gain of about 8% and it gained back, almost what it lost in the prior week.
  • Europe share market also rose for a second consecutive week in the wake of better-than-expected economic data and the pan-European STOXX Europe 600 Index closed 1.88% higher last week.
  • France’s CAC 40 Index added 2.37% whereas, Germany’s DAX Index climbed 3.26%.
  • The UK’s FTSE 100 Index grew 1.88% and Italy’s FTSE MIB Index advanced 2.40% over the last week.
  • Japanese equity market also enjoyed the uptrend for the week. The Nikkei Index rose 0.56 % and the broader TOPIX climbed 1.46%.
  • The Japanese currency Yen strengthened against the USD to its highest level in recent times to reach JPY 128 from around JPY 132 the prior week.
  • Chinese stocks also rose with the help of investors boosted sentiments and optimism and the blue-chip CSI 300 Index climbed 2.35% over the last week whereas the Shanghai Composite Index gained 1.19%.

On account of the birthday of Martin Luther King Jr., U.S. financial markets will remain closed on Monday 16th Jan’23. An update on US retail sales activity during the holiday season shopping will be received on Wednesday as the United States census bureau report is schedule to arrive that day. All the indicators emerging from key markets across the globe are indicating that Disinflation would be the key theme in 2023 and it has already started to become visible in the first two weeks of trading.

Anupam Kumar

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