Trade Overview: We bring you current reports, trends, stock prices, bonds, foreign exchange, commodities, and analyst recommendations.
10:44
Europe started positively: The British FTSE dipped by 0.5%, the DAX increased by 0.1% while the French CAC saw a 0.2% rise in its value.
Macro Europe: The consumer price index in Great Britain fell to a rate of 4% at an annual rate in January. It was earlier predicted to be 4.1%. On a monthly basis, the index decreased by 0.6% (predicted: -0.6%).
08:19
Earlier this morning in Asia, the major indices showed a mixed trend. The Nikkei dropped 0.6%, the Hang Seng rose 0.3%, and the Kospi fell 1.1%. The stock markets in China are closed due to the Chinese New Year.
Futures in the US are currently trading in a mixed trend.
Last night, Wall Street’s major indices closed with significant drops after January’s inflation data fell short of early expectations (further details below). The Nasdaq fell 1.8%, the Dow Jones and the S&P 500 fell 1.4% each.
Bimmer company’s share continued its positive surge last night (Tuesday). On Monday, the company, which offers solutions in video and broadcasting fields to improve quality and efficiency, announced their collaboration with Nvidia. This announcement led to a massive increase in Bimmer’s shares during Monday. Last night, the company’s stock added about 40% to its value.
Jeff Bezos, the founder of Amazon, sold approximately 4 billion dollars worth of his company’s shares last week. This amounts to 12 million Amazon shares. Despite the sale, Bezos remains Amazon’s largest shareholder, owning about 9% of the company. Bezos’ net worth is estimated at $190 billion, making him one of the wealthiest people worldwide. According to Forbes, Bezos planned to sell up to 50 million Amazon shares through Morgan Stanley by the end of January 2025.
Last night in the US, government bond yields surged following the disappointing inflation data. This heightened investor concerns that the Fed’s plan to cut interest rates might still be far away. The ten-year government bond yield increased by 15 basis points to 4.32% and the two-year bond yield increased by 17 basis points to 4.64%.
In the commodity market, oil prices are slightly down this morning. The price of a Brent barrel is around 82 dollars.
In the macro sector, the consumer price index in the USA rose by 0.4% for the month of January. This was higher than the early expectation of 0.3%. In annual terms, US inflation stands at 3.1%, while the market expected a sharper decrease to a rate of 2.9%. The core index, which excludes food and energy, also exceeded estimates. The index rose by 0.4% in January and 3.9% over the last 12 months, 0.1 and 0.2 above market estimates respectively.
Chief Markets Economist at Mizrahi-Tefahot, Ronan Menachem, responded to the data:
“This is a disappointing figure from the market’s perspective and with regard to the chance that the Federal Bank will lower the interest rate soon. It seems that the chances of this happening already in March are zero. Even before that, the market priced this at only a 5% chance. Also regarding the month of May, the market will price a two-thirds probability that the interest rate will not change and the likely scenario now is that the interest rate cut may even be postponed to the second half of the year.
“The housing section increased 0.6% in January, the highest increase in four months, and 6.0% in the last 12 months. This is a hard core of the inflation core that does not subside, repeatedly delaying the decline of general inflation and making it difficult for it to converge to the target level. It should be noted that if not for a 4.6% drop in the energy section in the last 12 months, overall inflation would have been much higher.
“The non-energy services section increased by 0.7%, more than twice the increase in the general index, so inflation is still “sticky” and reflects a significant increase in local demand – despite the cumulative and sharp interest rate increases until recently.
“The index data joins a host of data from the recent period – on economic activity, output, private consumption and employment, and also follows the excessive increase in the price index of household expenditures for the month of December (PCE) which was published earlier and which was also surprising according to Ma’ala.
“This index joins the rather tough tone of Fed officials, who signal that they will not rush to lower the interest rate and that today more than ever they will examine the interest rate decisions every month according to the data from the field.”
Later today, the consumer price index in Great Britain, the GDP in the Eurozone for the last quarter of 2023 and the industrial production in the Eurozone for December are expected to be published.
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