- Wall Street indexes closed the session with solid gains yesterday. The S&P 500 crossed the psychological level of 5,000 points for the first time ever. The upward momentum continued until the end of the session, with the index gaining 0.82%. The Nasdaq100 rose by 1.04%. The Dow Jones was slightly weaker, gaining 0.4%.
- China's CPI inflation turned out to be lower than expected in January, raising concerns about deflation and a downturn in the economy. CPI fell -0.8% y/y vs. -0.5% forecast and -0.3% in December (m/m rose 0.3% vs. 0.1% previously). Core CPI inflation rose 0.4% vs. 0.6% in the previous reading; food prices fell 5.9% y/y.
- Sentiment in Asia was mostly upbeat, except for China, where the Hang Seng slid 1.45% and slipped back below the 16,000-point level.
- Japan's Nikkei index gained more than 2%, while the benchmark Topix gained nearly 0.5%. Korea's KOSPI erased much of the gains and closed the session flat
- Collins of the Fed stressed that it is still likely that long-term interest rates will be higher than they were before the pandemic, signaling that policy easing by the Federal Reserve will be limited.
- The Fed's Barkin pointed to considerable uncertainty about the trajectory of inflation, but stressed that it would probably not take much damage to the economy to bring it down to 2%
The U.S. Congressional Budget Office issued a new set of economic forecasts and indicated that it lowered 10-year deficit projections, mainly due to a reduction in discretionary spending in 2023, stronger GDP and employment growth than previously forecast.
- Unemployment rate in the last quarter of the year at 4.4% in 2024-2026 after 3.7% in 2023.
- U.S. real GDP growth of 1.5% in 2024, 2.2% in 2025 and 2026 after 3.1% growth in 2023, Q4 vs Q4.
- Core PCE inflation at 2.4% in 2024, 2.3% in 2025 after 3.2% in 2023.
- U.S. net interest costs will be 3.1% of GDP in 2024 vs. 2.4% in 2023, rising to 3.9% in 2034.
- U.S. government debt will rise to 116% of GDP at the end of 2034 from 97.3% at the end of 2023.
- US deficit in 2024 at $1.507 trillion vs. deficit in 2023 at $1.695 trillion.
- Cumulative U.S. deficit in 2025-2034 at $20.016 trillion, compared to a previous deficit in 2024-2033 of $20.314 trillion.
- Despite weaker-than-forecast results, Disney shares gain nearly 7% ahead of the U.S. open, supported by comments on profitability and the start of a crackdown on password sharing, later in the year
- PayPal loses 8% after quarterly financial results; company beat expectations, but disappointed on annual earnings per share forecast and expects flat revenue in 2024
- EURUSD is trading up 0.15%, with considerable volatility in currency pairs linked to the Japanese yen, which is weakening; USDJPY gains 0.42%
- Oil is trading up a modest 0.2%, natural gas contracts are losing around 0.5%. Gold contracts lose 0.1% against a near 0.65% rally in silver
- Bitcoin gains 0.8% today and is trading near $44,500. According to cryptocurrency market observers, the rapid rise from the $43,000 level yesterday can be linked to the tense situation of the US regional banking sector, although New York Community Bancorp (NYCB.US) shares managed to rebound yesterday after nearly 12% declines during the session and closed the session at 7% plus
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
