From “NASDAQ”:

The last week has been an eventful one for the markets, with 2yr US yields rising and a large March Fed cut pricing falling to 22% from 50% a week earlier. Despite some ups and downs, the S&P 500 reached a fresh all-time high. Goldman Sachs’ David Kostin reports that the ‘Magnificent 7′ tech stocks have continued to outperform, with higher valuation reflecting investor expectations of a 3-year CAGR sales growth of 12%. Investors are closely monitoring earnings and Fed speak this week. Meanwhile, China’s stock market has hit 5-year lows, and US10YR is close to the 4% level. Eurozone’s economy is showing some signs of recovery, according to a survey, and ESG investors have expressed concerns to the Bank of England about the UK banks’ insufficient capital for climate risks. On the corporate front, Orsted will unveil its strategic plan to investors after it faced a disastrous 2023. The markets are preparing for another busy week of earnings, and Barclays’ Emmanuel Cau cautions that with multiples up so much in 2023, there’s a lot of pressure on equities to see the earnings follow through. It’s a quieter week of economic data this week that will be mostly focused on US ISM Services data, Europe’s retail sales, China’s inflation data, and earnings from Disney, Eli Lilly, and Alibaba.

The Federal Reserve is expecting to make three rate cuts this year, as Chairman Jay Powell stated to the Financial Times. Meanwhile, the OECD is suggesting that the falling US inflation opens the door to rate cuts within months. In other economic news, German exports disappointed in December due to weak global demand, but the Euro zone’s economy is showing some signs of recovery, according to a survey. The UK’s services activity rose at the fastest pace in eight months, and the UK says its job market was tighter than expected in late 2023. In China, margin debt is getting unwound as the stock selloff deepens, but China overall is showing signs of rebound in services activity, despite tumbling prices that are pushing some exporters to the brink. On the legal front, Musk allegedly took drugs with some Tesla Board members, and Abbott Labs must face a lawsuit over PediaSure height claims. Meanwhile, the US Senate has unveiled a $118 billion bill for border security, aid for Ukraine, and Israel. In the energy and oil sector, Chevron and Exxon are ramping up Permian oil growth, while Kuwait’s Al-Zour refinery has hit full capacity for the first time. Biden officials are headed to Guyana amid a dispute over oil wealth. Vale’s board is advised to consider outside candidates in the search for the next CEO, and Boeing has found more problems with 737 max, risking delivery delays. Amgen’s weight-loss drug, meanwhile, shows lasting results in an early study, and Novo Nordisk is surprised by high European demand for weight-loss drugs. Grocery stores should cut prices as costs ease, the Biden White House announced. Finally, China’s Jan services activity expands at a slower pace, and global hedge funds remain short, ready for further US banking turmoil.



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