Morning Recap Friday 28 January 2022
Global Markets Update
U.S. MARKETS
Equity markets closed mostly lower overnight, with the S&P 500 down -0.5%, Dow Jones flat and NASDAQ closing -1.4% lower. As investors continued to reprice assets to account for the Federal Reserve’s pivot to restrictive policy. U.S. economic growth accelerated by more than forecast in 4Q21. With GDP expanding at a 6.9% annualized rate following a 2.3% pace in 3Q21. Fuelled by the rebuilding of inventories and capping the strongest year since the 1980s. However, inflation continued to remain high with the personal consumption expenditures price index excluding food and energy, an inflation measure followed closely by Fed officials, growing an annualized 4.9% in the quarter. Applications for U.S. state unemployment insurance fell for the first time in four weeks in the week ended January 22, with initial unemployment claims declining 30,000 to 260,000.
Long-dated U.S. treasury yields were mixed, with the 2-Yr yield higher at 1.190% and the 10-Yr yield lower at 1.810%.
EUROPEAN MARKETS
European equity markets closed higher overnight. With the Stoxx Europe 600 up +0.6%, U.K. FTSE 100 up +1.1% and German DAX gaining +0.4%. As sentiment was boosted after European Union’s drugs regulator backed Pfizer Inc’s Covid-19 pill, offering a tool to manage coronavirus infections at home and ease the burden on hospitals.
ASIAN MARKETS
Asian equity markets closed lower overnight, with the Shanghai Composite down -1.8%. Hang Seng down -2.0%, KOSPI down -3.5% and Nikkei 225 declining -3.1%. Industrial enterprises in China, including manufacturers, miners and power suppliers, booked 8.7 trillion yuan in profits in 2021, up +34.3% yoy, highest since 2000.
WTI oil is trading at US$87.09 a barrel. Iron ore price is at US$126.64 per ton. Spot gold is trading at US$1,796 per oz.
