MARKET WRAPS
Watch For:
UK monthly retail sales; trading updates from Investor AB,
Deliveroo, Sasol
Opening Call:
Stock futures advanced as a tech-driven rally boosted sentiment.
Asian stock benchmarks were largely higher; the dollar weakened
slightly; Treasury yields were little changed; oil futures were
mixed fell and gold edged higher.
Equities:
European stock futures rose early Friday, extending an upbeat
mood spurred by technology names, which powered indexes in the U.S.
and Asia higher.
Meanwhile, investors are still concerned that the Federal
Reserve may not wind down its aggressive monetary tightening as
quickly as market participants expect following strong December
retail-sales data and after policymakers talked down expectations
for an early start to rate cuts.
Investors in both stock and bond markets are now speculating
that the central bank will be in no rush to cut borrowing costs as
the economy shows signs of resilience.
"This is an economy that continues to surprise to the upside,"
said Nadia Lovell, senior U.S. equity strategist for the chief
investment office at UBS Wealth Management.
"People were maybe too optimistic about how many are coming this
year," said Doug Evans, chief investment officer at Callan Family
Office. "Yes, the Fed will ease-but probably not at the cadence
people were expecting."
Forex:
Tight monetary policy in Brazil and Mexico reduce the importance
of global growth for emerging market currencies, Bank of America
said.
"EM currencies have become more idiosyncratic," the bank said,
adding that the dollar remains "the main driver of EM FX and its
first principal component."
BofA said that contrary to the pre-Covid pattern, EM currencies
could benefit if commodity prices, especially oil, fall.
Bonds:
The decline in Treasury yields in the past couple of months "has
rendered the long-duration trade probably moot," said Kevin
Flanagan, head of fixed income strategy at WisdomTree.
Investors would have to envision the 10-year yield falling
closer to 3% to buy long-duration bonds, since these highly
interest-rate-sensitive bonds gain value when borrowing costs
decline.
The duration trade gained traction in October, as the 10-year
rose toward 5%. The benchmark declined to 3.8% in December and is
now near 4.15%, as investors expect the Fed to start cutting rates
soon. "The Treasurys market has priced in a lot of good news,"
Flanagan said."
Energy:
Oil futures were mixed early Friday amid divergent signals. On
the one hand, lingering tensions in the Middle East and higher
equity markets have supported oil prices, ING said.
On the other hand, the IEA's latest oil-market report was
somewhat bearish, ING said, noting that the agency forecast that
global oil demand growth will slow to 1.2 million barrels a day in
2024 from 2.3 million barrels a day in 2023.
Metals:
Gold edged higher in Asia, supported by the mild weakness of
USD, which typically has an inverse correlation with the precious
metal.
Attacks by the U.S. military on Houthi weaponry in Yemen as well
as Pakistan's airstrikes in Iran have resulted in an escalation of
tensions in the region, said IG. Geopolitical tensions can often
spur demand for gold.
-
Copper prices advanced amid supply concerns. Low prices and a
tough regulatory environment have led to mine closures across
base-metal markets, ANZ said.
The shutdown of the Cobre Panama mine and cuts to output at
Anglo American operations have raised supply risks, ANZ added. New
projects are also being delayed, further fueling supply worries.
That is helping offset concerns around weaker demand, the bank
said.
-
Iron-ore prices rose, rebounding from recent weakness. However,
analysts reckon iron-ore prices could continue to be weighed amid
concerns about Chinese steel mills' production cuts due to poor
profitability and a lack of new stimulus measures.
The iron-ore market continues to see relatively sufficient
supply, neutral demand and accumulating inventories, Xinhu Futures
said. Market sentiment remains subdued in the absence of strong
Chinese stimulus measures on the macro front, Xinhu said.
TODAY'S TOP HEADLINES
A Hot Debt Market Is Slashing Borrowing Costs for Riskier
Companies
Companies with low credit ratings are rushing to slash their
borrowing costs even before the Federal Reserve makes a single
interest-rate cut.
As of Thursday morning, companies such as SeaWorld Entertainment
and Dave & Buster's had asked investors to cut the interest
rates on some $62 billion of sub-investment grade loans in
January-already the largest monthly total in three years, according
to PitchBook LCD.
AI Is the Talk of Davos. Is It Time to Sell?
The mood of the global elite meeting in Davos, Switzerland, is a
useful indicator for investors-as long as they do the opposite.
When the elite are depressed, buy. When they're positive, sell.
When they're focused on crypto, as in 2021, get out. This year it
was impossible to move in the snow-blanketed resort without having
artificial intelligence pushed at you.
Fed's Bostic makes case for first rate cut in July-September
quarter
Atlanta Fed President Raphael Bostic on Thursday laid out the
case for the central bank holding off from any interest-rate cut
until the July-September quarter.
Bostic said he has recently moved up his projected time to begin
reducing the Fed's benchmark rate to the third quarter from the
fourth quarter because of the unexpected progress on inflation and
economic activity.
The Red Sea Conflict Is Scrambling Shipping. Europe Is Bearing
the Brunt.
For the second time in three years, a conflict in Europe's
unruly neighborhood is threatening to weaken an already struggling
economy while a more robust U.S. is watching from a safer
distance.
This time, attacks by Houthi rebels in Yemen targeting cargo
ships in the Red Sea have persuaded more carriers to opt for the
safer but longer and more expensive journey around Africa via the
Cape of Good Hope.
EU Commission Intends to Block Amazon's iRobot Acquisition
The European Union's competition watchdog intends to block
Amazon's $1.7 billion bid to purchase Roomba maker iRobot, people
familiar with the matter said.
Competition officials from the European Commission, the bloc's
executive body, met Thursday with representatives from Amazon to
discuss the deal, one of those people said. Amazon was told during
the meeting that the deal was likely to be rejected, the person
said. Amazon declined to comment.
Drugmakers Raise Prices of Ozempic, Mounjaro and Hundreds of
Other Drugs
Drugmakers kicked off 2024 by raising the list prices for
Ozempic, Mounjaro and dozens of other widely used medicines.
Companies including Novo Nordisk, the maker of Ozempic, and Eli
Lilly, which sells Mounjaro, raised list prices on 775 brand-name
drugs during the first half of January, according to an analysis
for The Wall Street Journal by 46brooklyn Research, a nonprofit
drug-pricing analytics group.
Write to singaporeeditors@dowjones.com
Expected Major Events for Friday
07:00/GER: Dec PPI
07:00/UK: Dec UK monthly retail sales figures
07:30/SWI: Dec PPI
07:30/SWI: Dec Import Price Index
09:00/ICE: Dec Harmonized CPI
09:00/POL: Dec PPI
15:59/GRE: Nov Balance of Payments
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(END) Dow Jones Newswires
January 19, 2024 00:17 ET (05:17 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Grafico Indice FTSE 100
Da Ott 2024 a Nov 2024
Grafico Indice FTSE 100
Da Nov 2023 a Nov 2024