[U.S. market]Nasdaq 100, sharpest week since November – USD 129 yen – Bloomberg

The US stock market continued to rise on the 27th. Amidst signs of a slowdown in inflation, expectations for a small interest rate hike have strengthened. Earnings forecasts from some of the tech giants fell short of expectations, but the impact on the market was limited.

The tech-heavy Nasdaq 100 index rose 1%. On a weekly basis, it was a sharp rise since November last year. Facebook’s parent company Meta Platforms and Tesla were among the biggest gainers on the day.Inter tough on the day beforeBusiness outlookIn addition to showingmicrosoftortexas instruments(TI) also expressed a pessimistic outlook. Next week, Apple, Amazon.com, Meta, and others report earnings.

22V Research founder Dennis Devscheer said the big companies that have reported earnings so far have generally beaten expectations by a small margin. “The strong performance of these companies will prevent the stock index outlook from deteriorating too much,” he said.

In the US personal consumption expenditure (PCE) price index in December last year, the increase in both the overall index and the core index excluding food and energy slowed further on a year-on-year basis. It was the lowest growth rate in more than a year. Short-term U.S. inflation expectations fell in late January, which again boosted consumer confidence, according to a University of Michigan survey of consumer confidence.

US PCE price index slows down further in December, boosting speculation of a small interest rate hike (3)

U.S. inflation expectations one year ahead fall further, boosting consumer confidence (2)

“The market has been rallying in the hopes of keeping inflation under control, but I’m still not convinced the problem is over,” said Carla Murphy, chief investment officer at Kestra Investment Management. “If you think about it, monetary policy works slowly. I’m not always sure they’ll respond,” he said.

US Treasuries

U.S. Treasuries generally fell. There was a slight increase in buying after the release of PCE data in the morning, but price movements were limited amid a lack of significant material.

Erik Moeller, head of product and investment strategy at Musnich, said the Federal Open Market Committee (FOMC) had changed course after last year’s big move, and on Feb. 1 it was 25 basis points (bp, 1bp = 0.01%). He said that expectations for a rate cut at the end of 2023 are “a step too far.” “The FOMC will probably call attention to, ‘We are entering the final phase, but we will continue to raise rates,’” he said. .

foreign exchange

In the foreign exchange market, the dollar rose slightly. Rising US Treasury yields and US stocks are the backdrop. Markets are waiting for next week’s central bank policy decision and for the Chinese market to return from the Lunar New Year holidays.

Yen continues to appreciate against a wide range of major currencies. Against the dollar, it is in the upper 129 yen range. Tokyo wards in Januaryconsumer price indexThe yen had risen since Tokyo time on expectations of a policy shift by the Bank of Japan after a strong reading of core CPI (excluding fresh food).

ING analysts said: “The FOMC probably has more room for surprises in a hawkish direction next week than the European Central Bank (ECB), and an upward dollar correction is possible.” said in the report.

crude

New York crude oil futures fell. After testing the 100-day moving average line, which is offering upside resistance, it turned to sell.

Still, a bright demand outlook is supporting the market, which is holding close to $80 a barrel. Chinese officials say domestic travel during this year’s Lunar New Year holiday has recovered to nearly 90% of its pre-coronavirus levels.

West Texas Intermediate (WTI) futures for March delivery on the New York Mercantile Exchange (NYMEX) closed at $79.68 a barrel, down $1.33 (1.6%) from the previous day. London ICE North Sea Brent March delivery fell 81 cents, or 0.9%, to $86.66.

Money

Gold prices in New York remained largely unchanged. During the day, the price was volatile, with repeated ups and downs. U.S. inflation data came close to expectations, raising awareness that the Fed may slow its pace of rate hikes further. Market participants are now trying to figure out what to expect after next week’s FOMC passage.

Tai Wong, senior trader at Heraeus Precious Metals, said the PCE price index showed the expected slowdown, although inflation remains high. “With financial conditions already easing rapidly and jobs and growth both strong, the Fed will remain vigilant,” he said. ‘ continued.