Market Analytics and Considerations
Key Notes
Three important U.S. indexes closed lesser on the final trading day of 2022 as market players prepared for the new year with reason to worry about a possible future downturn and the U.S. Federal Reserve’s path toward tighter monetary policy. This morning, March S&P 500 futures (ESH23) are rising steadily +1.12%. Drops in the utilities, basic materials, and industrials areas have been the primary causes of the decline in three main U.S. stock indices.
The Nasdaq Composite fell 33.1%, the Dow dropped 8.7%, and the S&P 500 lost 19.4percent of total for the year. These losses were the greatest percentage reductions since the 2008 financial crisis, as the U.S. Federal Reserve raised interest rates to combat the strongest inflation in forty years.
The International Monetary Fund Director Kristalina Georgieva’s admonition on Sunday that the United States, Europe, and China were all contracting concurrently dampened investor mood as well. In addition, Georgieva claimed that this fiscal year, because of rampant inflation and increasing interest rates, at most a third of the world could experience a recession.
Today, the U.S. Manufacturing PMI reading is the subject of intense attention.
United States 10-Year rates are all at 3.750percent in the bond markets, dropping -2.11%.
As market players review the economic picture for the coming year after returning from the Christmas holidays, the Euro Stoxx 50 futures are higher +1.42% this morning. Given the importance of this export market to some of the largest corporations in the area, traders have been closely following China’s reforming efforts and a rise in COVID-19 infections to evaluate the possible consequences for Europe. Additionally, investors’ attention is cented on the German CPI data due later in the afternoon for additional hints on regional inflationary pressure.
According to President of the European Central Bank Christine Lagarde, the central bank must stop the rapid increase in salaries in the Eurozone from causing the already high inflation rate to rise much higher.
Today’s statistics included the procure.ch PMI for Switzerland, the Unemployment Change and Rates for Germany, and the Manufacturing PMI for the United Kingdom.
The German December Unemployment Change was -13K, which was better than the predicted +15K.
The German December Unemployment Rate was 5.5%, higher than the 5.6% consensus estimate.
The December U.K. Manufacturing PMI was 45.3, which was higher than the consensus estimate of 44.7.
