New York, January 24, 2024 - PrismMarketView - US equities experienced a positive trajectory, buoyed by strong tech sector earnings. Treasury bonds saw reduced gains following the release of better-than-expected US economic data.
Both the S&P 500 and Nasdaq 100 indices witnessed an uptick on Wednesday. Shares of Netflix Inc. (NFLX), surged as the company’s subscriber growth exceeded forecasts, while AT&T (T), experienced a decline due to its lower-than-expected earnings projection for 2024. The US 10-year Treasury yield settled around 4.13%.
Market participants are evaluating US business activity data indicating the fastest growth rate in seven months, seen in January. The tech industry remains in focus, with upcoming earnings from Tesla Inc. (TSLA), and IBM, (IBM). Overall, this earnings season suggests that businesses are adapting effectively to the current high-interest rate environment. The Bank of Canada’s decision to hold its key rate steady at 5% was anticipated, with indications of an end to rate hikes. This week also includes the European Central Bank’s policy meeting scheduled for Thursday.
Eurozone bond yields decreased following reports of continuous business activity contraction in the region for the eighth consecutive month. Market predictions now include a 136 basis-point reduction in interest rates by the end of the year, an increase from Tuesday’s forecast.
In the UK, inflation concerns resurfaced with a report indicating a significant rise in private sector costs, partly attributed to shipping delays in the Red Sea. The British 10-year gilt yield hovered near 4%, with the pound strengthening. In other news, industrial metal prices benefited from China’s announcement of economic stimulus plans, including a reduction in banks’ reserve requirement ratios. This move is expected to boost bank lending and government bond purchases in China. Brent crude prices stabilized around $80 per barrel in response to this news.
Key market movements include:
Stocks
- S&P 500 up by 0.4% as of mid-morning in New York
- Nasdaq 100 increased by 0.9%
- Dow Jones Industrial Average showed minimal change
- Stoxx Europe 600 rose by 1.2%
- MSCI World index up by 0.1%
Currencies
- Bloomberg Dollar Spot Index decreased by 0.4%
- Euro up by 0.4% to $1.0899
- British pound increased by 0.4% to $1.2740
- Japanese yen up by 0.8% to 147.11 per dollar
Cryptocurrencies
- Bitcoin up by 1.9% to $39,931.88
- Ether increased by 1.2% to $2,229.35
Bonds
- 10-year Treasury yield steady at 4.13%
- Germany’s 10-year yield down by three basis points to 2.32%
- Britain’s 10-year yield stable at 3.99%
Commodities
- West Texas Intermediate crude up by 0.4% to $74.70 per barrel
- Spot gold down by 0.3% to $2,022.84 per ounce
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