Moving markets: Five things shaping the FTSE 100 today
Moving Markets Today: Asian Markets Surge Amid Weaker Dollar, Gold and Oil Prices Climb, Bitcoin Surges, United Uncovers Loose Bolts on Multiple 737 MAX, Eyes on U.S. Inflation and JPMorgan Chase/Citigroup Earnings This Week
U.S. stocks had a strong showing, experiencing their best performance since mid-November, with the S&P 500 nearing a potential record high. Asian markets followed suit. Gold prices edged higher due to a weaker dollar. United Airlines unearths bolt issue on Boeing 737 max aircraft, shares fell 8%, Investors eagerly await this week’s release of U.S. inflation figures, anticipating their impact. The earnings season is set to begin, led by major banks such as JPMorgan Chase and Citigroup. Here are five key takeaways for your day.
United Airlines Unearths Bolt Issue on Boeing 737 MAX Aircraft, Shares Fell 8%
Boeing faced an escalated crisis with its 737 MAX series as United Airlines reported finding loose bolts on several grounded MAX 9 aircraft. This raised concerns about the manufacturing process of Boeing’s popular jet family. Investigators are still determining the cause, leading to an 8% decline in Boeing’s shares on Monday.
UK Retailers Report Muted Christmas Spending; Fed’s Bowman Sees Policy Rate as ‘Sufficiently Restrictive’
Data released on Tuesday indicates lacklustre Christmas sales for British retailers, sparking concerns about a potential mild recession less than a year before a presumed national election. The British Retail Consortium (BRC) reported a 1.7% increase in December’s cash spending compared to the previous year. However, when adjusted for inflation, this signifies a decrease in actual purchases. In the other news, Barclays cut around 5,000 jobs in 2023 as part of a cost-cutting drive announced the previous year, the bank said.
On Monday, Federal Reserve Governor Michelle Bowman shifted from a consistently hawkish stance, stating that she now sees U.S. monetary policy as “sufficiently restrictive.” She also expressed readiness to support potential interest-rate cuts as inflation eases. “My view has evolved to consider the possibility that the rate of inflation could decline further with the policy rate held at the current level for some time,” in a prepared statement for the South Carolina Bankers Association 2024 Community Bankers Conference, Bowman shared her remarks., Reuters reported.
Samsung Highlights Bigger Q4 Profit Dip Than Expected Due to Weak Demand
Samsung Electronics reported a steeper-than-expected 35% decline in fourth-quarter operating profit, reaching an estimated 2.8 trillion won ($2.13 billion), down from the previous year’s 4.31 trillion won. Weak consumer demand persisted despite improvements in memory chip prices. The result missed the 3.7 trillion won LSEG SmartEstimate, with detailed earnings set for release on January 31.
In the Spotlight: Taiwan Elections, Corporate Earnings, and U.S. Inflation Headline the Week
This week unfolds with pivotal events capturing investors’ attention, including Taiwan’s crucial presidential and parliamentary elections. Simultaneously, major U.S. financial players such as BlackRock, Citigroup, and JPMorgan Chase kick off the earnings season. In the UK, market watchers eagerly await trading updates from renowned brands like Marks and Spencer, J Sainsbury, Tesco, B&M, and Greggs, providing valuable insights into consumer confidence post-encouraging grocery sales reports by Kantar last week.
On the economic front, key data releases abound. January 9 features the EU unemployment rate, the UK’s BRC-KPMG Retail Sales Monitor, and Barclays Consumer Spending Data. Australia’s November consumer price index (CPI) inflation rate data is set for January 10. January 11 turns the spotlight on the European Central Bank Economic Bulletin and U.S. CPI inflation rate data, along with unemployment claims. Lastly, January 12 brings anticipation for insights from China’s December trade balance figures, the UK’s November GDP estimate, and the U.S. producer price index (PPI) inflation rate for December.
Asian Markets Rally in Sync with Wall Street Surge; Bitcoin Soars
The Dow Jones Industrial Average rose by 0.58% to 37,683.01, the S&P 500 gained 1.41% to 4,763.54, and the Nasdaq Composite increased by 2.20% to 14,843.77. Megacaps like Amazon.com was up 2.66% and Alphabet was up 2.29%. Apple rose 2.42% on the announcement of its Vision Pro device. Nvidia surged 6.3% and fellow chipmaker Advanced Micro Devices jumped 5.48%.
In Asia, MSCI’s index rose by 0.5%, Australian shares by 1.17%, Nikkei by 1.6%, Hang Seng by 0.26%, and CSI300 fell by 0.21%. The 10-year Treasury yield rose to 4.0267%, up from Monday’s U.S. close of 4.002%. The two-year yield, reflecting expectations of higher Fed fund rates, reached 4.3746%, compared to a U.S. close of 4.345%. U.S. crude rose by 0.40% to $71.05 per barrel, Brent crude increased by 0.53% to $76.52 per barrel, and spot gold saw a slight rise to $2034.49 per ounce. In the cryptocurrency market, bitcoin hovered around $46,923, close to its highest level since April 2022, following its peak of $47,281 in the previous session, driven by growing anticipation of spot bitcoin exchange-traded funds (ETF) approvals.