US equities finished mixed on Friday with Dow Jones falling 0.6% to 25,912, while the S&P 500 Index gained 0.1% to 4663 and the Nasdaq Composite gained 0.6% to 14,894. Financials sector was leading the losers, despite a sharp rise in treasury yields and following mixed results from JPMorgan Chase, Citigroup and Wells Fargo & Company. Concerns of more aggressive moves from Fed on the monetary policy to curb inflation added to the negative sentiment. Friday’s economic data disappointed headlined by a sharp drop in December retail sales, larger-than-expected deterioration in January consumer sentiment, and a dip in industrial production. Treasuries were lower with yields on 10-year note and the 30-year bonds rising 8 bps to 1.78% and 2.13% respectively. The US Dollar gained ground with DXY now trading around 95.08. US markets are closed today in observance of Martin Luther King Jr. Day. Later this week we have a number of economic releases, including housing starts and existing homes sales. The earnings season will also ramp up to take some market focus.
European stocks edged higher on Monday with some talks related to British consumer companies boosting the blue-chip FTSE 100, while shares in Credit Suisse slipped after chairman quit following an internal probe into his personal conduct. STOXX 600 index rose 0.2% following Chinese Central Bank’s cut in lending rates in the wake of mixed economic data. FTSE 100 gained 0.63% to 7589.16 after GlaxoSmithKline jumped 5.2% after rejecting Unilever deal. CAC 40 gained 0.4% to 7174.12 and DAX is trading 0.22% higher at 15919.19. Bunds are mostly unchanged, and EUR/USD is holding above 1.14 in a quiet day and absence of high-tier macroeconomic data releases. Focus is on Italian Politics with Presidential elections on 24th of January, while Boris in the UK faces another bruising week, with his future as UK prime minister in the balance.
Share markets were choppy on Monday as Chinese economic data confirmed the negative effect of coronavirus restrictions on consumer spending. Chinese retails sales rose only 1.7% year-on-year in December missing forecasts of a 3.7% rise. Industrial output did better, as economy grew above forecasted 4% in the fourth quarter. China’s central bank surprised by cutting key lending interest rates by 10 basis points. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.3%, while Japan’s Nikkei bounced 0.8% after losing 1.2% last week.
Oil prices rose on Monday with Brent Crude up 0.5% to $86.46 and WTI up 0.7% at $84.40. The gains followed a rally last week when Brent rose more than 5% and WTI climbed over 6%. Frantic oil buying continues, driven by supply outages and signs that the Omicron variant will not be as disruptive as feared. While OPEC+ are gradually relaxing output cuts, many smaller producers cannot raise supply and others have been careful with pumping too much oil in case of renewed COVID-19 setbacks.