Stock Market Updates: Worst week for the US markets in 2023
Global Stock Market Indexes-Weekly Updates: The major global stock market indexes ended lower during the week ended 24 Feb 2023. The fear of rising inflation and further aggressive interest rate hikes by the US Fed dented market sentiments during the week. Barring China’s Shanghai other key global stock market indexes mostly ended lower for the week.
The US Stock Market indexes- Weekly Updates
The US stock market indexes made the worst weekly losses of the year 2023, as hot economic data worried investors about more interest rate hikes. Friday’s decline pushed Dow Jones into negative territory for the calendar year 2023. The declines were broad-based, Communication services and consumer discretionary stocks were the worst performers during the week while growth stocks fell more than value stocks.
The holiday-shortened week witnessed selling pressure after the Fed’s minutes of the last meetings revealed that more rate hikes are needed to tame inflation. On Friday the Consumer Price Expenditure (CPE) data announced was above expectation and made its biggest jump since August 2022. In addition to this, personal spending also increased in January, it rose nearly two years high and also well above expectations.
In other economic news, new home sales increased and the Michigan consumer sentiment index was unexpectedly revised higher. The bond yield hits its highest levels as the 10-year oil US Treasury note nears 4% for the first time in 2023. The growth and rising inflation sparked off selling in the US markets, as investors were in fear that Fed may become more aggressive in rate hikes in the March meeting
European Stock Market Indexes- Weekly Updates
The European stock market indexes closed lower during the week, as better-than-expected economic data and corporate earnings fear investors that central banks might continue with interest rate increases. While the data released on Friday showed that the German economy contracted more than expected in the fourth quarter, spurring fears of a recession.
However, the downside was limited as Inflation in the eurozone eased in January to an annual rate of 8.6% from 9.2% the previous month. According to a survey done by S&P Global, the private sector business activity both in Manufacturing and Services in the eurozone area picked up in February.
The survey done by S&P Global/CIPS in the UK showed that the business activity in both the manufacturing and services sectors also unexpectedly ticked up.
Japan’s equity market – Weekly Updates
Japan’s stock market index closed lower during the week that ended on 24 Feb. The dovish Comments by the incoming Bank of Japan (BoJ) Governor Kazuo Ueda lent some support to markets on Friday, but this overshadowed the investor’s concern about the impact of further interest rate hikes by the U.S Fed. The flash PMI data showed sustained growth in services activity while manufacturing activity declined further.
Rising inflation added fresh pressure on the BoJ to start scaling back its massive stimulus program. But Kazuo Ueda, who is set to become BoJ Governor in April, said that it will take time for the BoJ to achieve its 2% inflation target in a sustainable and stable manner, and given the current economic and price situation as well as the outlook, it is appropriate to continue with monetary easing.
Chinese Equity Markets- Weekly Updates
Chinese equity markets gained after three weeks of losses as hopes for continued regulatory support offset concerns about elevated U.S. tensions. The People’s Bank of China (PBOC) left its benchmark one-year and five-year loan prime rates unchanged for the sixth consecutive month, as widely expected boosted the market sentiments during the week.
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