ALL THAT GLITTERS
Equity markets were mixed last week as investors grappled with Big Tech earnings & expenditure, a new appointee for Chair of the Federal Reserve and a heavy sell-off in Gold and Silver at the end of the week.
This week, the ECB and Bank of England will vote on interest rates (no changes expected), we will get data reports on US job openings, Eurozone inflation and global PMI reports, while on Sunday, Japan will go to the poles to vote on their next government.
Equity markets started off the week on positive footing with the S&P 500 briefly surpassing 7,000 for the first time and logging a new intra-day high before retreating slightly. No clear trend emerged to drive markets - the mid and small-cap trend of recent weeks reversed and, while large cap value stocks did well overall, performance appeared to be stock specific rather than sectoral. Big Tech earnings reports proved divisive with Microsoft shares dropping up to 10% and Meta shares rising by the same amount in post-earnings trading.
On Friday, President Trump announced that former Fed governor Kevin Warsh would be nominee for Fed Chair - markets reacted positively seeing the appointment as one that respects Federal Reserve independence. Immediate reaction to the nomination saw Gold & Silver prices fall as faith in the US dollar strengthened. The sell-off in precious metals continued throughout the day with Gold dropping 9% and Silver falling 27% by the closing bell. Selling resumed on Monday as traders pointed to leveraged positions adding to downward price pressures.
The S&P 500 closed up 0.34% for the week. The tech-heavy NASDAQ 100 dropped -0.17% while, in Europe, the STOXX 600 rose 0.44% in a mixed and mostly directionless week for global equities.
US treasury yields rose slightly last week, (bond yields rise as bond prices fall) while German 10yr yields dropped. The 10-year US Treasury yield rose by ~10bps slightly to 4.24% in reaction to the Warsh nomination. The German bund equivalent dropped ~7bs to 2.85% as economic data from the eurozone remained stable.
- Tue 3rd US - Job Openings & Labour Turnover (JOLTS)
- Wed 4th EU - Flash Consumer Price Inflation data * Global PMI's
- Thu 5th - EU - ECB rate decision * UK - Bank of England rate decision
- Fri 6th US - January Employment report
This is intended as a general review of investment market conditions. It does not constitute investment advice and has not been prepared based on the financial needs or objectives of any particular person.