Daily Markets: Lunar New Year, Fed Quiet Period Temper Markets

Today’s Big Picture Asia-Pacific equity markets were largely closed today as this weekend saw the start of the Lunar New Year, which will see Chinese and Taiwanese markets closed all week, Hong Kong Markets closed through Wednesday, and Korean markets closed today and tomorrow. For those markets that were open today, Australia’s ASX All Ordinaries advanced 0.10%, India’s Sensex gained 0.53%, and Japan’s Nikkei closed 1.33% higher as a weakening Yen coupled with Friday’s US market rally helped Technology names lead markets. By mid-day trading, European equity indices are up across the board except for Italy, and US futures point to a soft market open, although at least at the point of writing, the Cboe Volatility Index (VIX) is also down so we may have an interesting open. With the Federal Reserve entering its quiet period ahead of its next monetary policy meeting and a lack of economic data, today’s market will be largely influenced by the few earnings reports we do get and developments in Washington regarding the US debt ceiling. Data Download International Economy The consumer confidence indicator in the Euro Area rose for a third month to -22.2 in December, up from -23.9 the month before and the highest level since May Economists polled by Reuters see the European Central Bank delivering 50 basis point interest rate hikes at each of its next two meetings. Like here in the US, those economist forecasts lag policymakers’ guidance on how high rates will go. Later this morning ECB President Christine Lagarde will give a speech in which she will more than likely reiterate her comments she made at the 2023 World Economic Forum. That message was “stay the course” on monetary policy to return euro area inflation to its 2% goal in a timely manner. Domestic Economy At 10 AM ET, the Conference Report will report its Leading Economic Index for December, and it is expected to come in at -0.7% vs. -1.0% in November. A National Association for Business Economics survey showed about a third of respondents saying their firms are not facing any labor shortages, and nearly 20% expect employment at their company to fall in the coming months. Only 12% of those surveyed think headcount will rise in the next three months—less than half the share that said their companies had increased employment over the past three months. The survey also found that ~40% of respondents saw their companies’ margins have declined over the past three months, up from less than a third in the July and October surveys. Markets Last week ended with a bit of a relief rally as the Dow gained 1.00%, the Russell 2000 rose 1.68%, the S&P 500 advanced 1.89% and the Nasdaq Composite closed 2.66% higher. All sectors were higher with Communications Services (3.13%) leading the way on a solid response to a strong Netflix (NFLX) subscriber count update, which prompted traders to bid shares up 8.46%. Familiar names Microsoft (MSFT), Apple (AAPL), and Nvidia (NVDA) combined to contribute to just under 50% of Technology’s 2.71% Friday boost. Goldman Sachs (GS) bucked Friday’s trend, down 2.54% on confirmation of playoffs and rumors of big haircuts on year-end bonuses. Here’s how the major market indicators stack up year-to-date: Dow Jones Industrial Average: 0.69% S&P 500: 3.47% Nasdaq Composite: 6.44% Russell 2000: 6.02% Bitcoin (BTC-USD): 36.48% Ether (ETH-USD) ): 38.49% Stocks to Watch Before trading kicks off for US-listed equities, Baker Hughes (BKR), Heartland Express (HTLD), and Synchrony Financial (SYF) will be among the companies reporting their quarterly results. Wells Fargo (WFC), Bank of America (BAC), JPMorgan Chase (JPM), and four other banks are working on a new digital wallet that will allow shoppers to pay at merchants’ online checkout with a wallet that will be linked to their debit and credit cards. Nokia (NOK) and Samsung (SSNLF) inked a 5G patent license pact, covering Nokia’s fundamental inventions in 5G and other technologies. Reuters reports Goldman Sachs’s asset management arm will significantly reduce the $59 billion of alternative investments that weighed on the bank’s earnings, an executive told Reuters. Bloomberg reports Western Digital (WDC) and Kioxia Holdings are advancing in discussions about a potential merger with a rough structure including a dual-listing in Japan being possible parts of the deal. Reports suggest Spotify Technology (SPOT) is planning playoffs as soon as this week. While the number of job cuts wasn’t specified, the streaming music company had about 9,800 employees at the end of 3Q 2022. Activist investor Elliott Management Corp. has made a multibillion-dollar investment in Salesforce (CRM). IPOs The IPO calendar could be a bit warmer than in recent weeks with potential pricings from Genelux (GNLX), Elate Group (ELGP), MorningStar Partners (TXO), and Syla Technologies (SYT). Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page. After Today’s Market Close Crane (CR) and Logitech International (LOGI) will be among the few companies slated to report their latest quarterly results after equities stop trading today. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar. On the Horizon Tuesday, January 24 Japan: Flash Manufacturing PMI – January Germany: Gfk Consumer Climate – February Eurozone: Flash Manufacturing and Services PMIs – January US: S&P Global Flash Manufacturing and Services PMIs – January Wednesday, January 25 UK: Producer Price Index Input, Output – December Germany: Business Expectations Index – January US: Weekly MBA Mortgage Applications US: Weekly EIA Crude Oil Inventories Thursday, January 26 US: Weekly Initial & Continuing Jobless Claims US: Durable Orders – December US: GDP – Preliminary 4Q 2022 US: PCE Price Index – 4Q 2022 US: New Home Sales – December US: Weekly EIA Natural Gas Inventories Friday, January 27 US: Personal Income & Spending, PCE Price Index – December US: Pending Home Sales – December US: University of Michigan Consumer Sentiment Index (Final) – January Thought for the Day “So. Monday. We meet again. We will never be friends—but maybe we can move past our mutual enmity toward a more-positive partnership.” – Julio Alexi Genao Disclosures The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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