Amid growing recession worries against waning inflation fears, mixed earning results and layoff announcements from major technology companies, the S&P 500 and the Dow sustained their first negative week (holiday shortened) of 2023. However, the technology-heavy Nasdaq composite recorded a modest gain last week which propelled Tech stocks in the other markets as well.

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

• The S&P 500 and DJIA (Dow Jones Industrial Average) lost 26.48 and 927.12 points to close at 3,972.61 and 33,375.49 respectively. The Dow’s weekly drop of 2.7% was far steeper than that of S&P 500, which was only 0.6% over the last week.
• Russell 2000 also fell by 19.69 to close over the week at 1.867.34. In contrast, Nasdaq composite gained 0.6% or 61.28 points to close on Friday at 11,140.44.
• As of Friday, the yield of the 10-year U.S. treasury bond was around 3.48% compared with 4.66% for the three-month bill i.e., a negative spread of 118 basis points.
• Oil gained 2.3% last week to reach US dollar 81.73 per barrel.
• In Europe, the pan-European Stoxx Europe 600 index ended the week modestly lower whereas German’s DAX fell 0.35 % and France’s CAC 40 index declined 0.39% over the week.
• Italy’s FTSE MIB was almost flat over the week whereas, UK’s FTSE 100 index gave up 0.94%
• UK’s inflation numbers slowed for a second consecutive month in December 2022. The CPI (consumer Price Index) slipped to 10.5% from November’s 10.7% reading, primarily in the wake of lower gasoline prices.
• Japanese equity market index Nikkei 225 and the broader TOPIX went up by 1.66% and 1.25% respectively as investors sentiment was supported and boosted by the prospect of China’s reopening.
• At the same time, the yield on the 10-year Japanese Government bond fell to 0.40% from the previous week’s 0.51%.
• From the prior week of about JPY 127.88, the yen weakened to around JPY 129.81 against the greenback U.S. dollar.
• Chinese equity markets rallied for a fourth consecutive week. Hong Kong’s Hang Seng Index gained 1.41% whereas, the Shanghai Composite Index performed better and gained 2.18% over the week. The blue-chip CSI 300 index also gained handsomely around 2.63%.
• China’s property market declined in December and the value added by its property sector to the overall economy slumped 5.1% in 2022 from the prior year.

Chinese stock market will be closed this full week to celebrate Spring Festival and Chinese New Year. It is quite evident from Market’s movement that its focus is shifting from Inflation to growth and recession worries. As per schedule, on Thursday, US Government’s initial estimate of 4th quarter GDP will be released and ideally it should give the market more clarity for the sessions ahead.

We will come back with more updates soon.