Global Weekly Recap January 22 – 2024 – January 26 – 2024

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As we approach the end of the first month of 2024, the financial world has been a period full of surprises. Notably, this week witnessed the S&P 500 and Dow Jones Industrial Average closing at all-time highs. However, the global economy continues to grapple with inflationary pressures. Adding to the complexity, the European Central Bank (ECB) opted not to lower its key interest rate, a decision that has rippled through financial markets.

How have these developments impacted various assets? We delve into these dynamics in our comprehensive weekly review.

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S&P 500 hits fresh record as Tesla slides on earnings gloom

The $SPX500 reached a new record peak at 4,894.16, buoyed by megacap and chip stock gains amidst investor focus on corporate earnings and potential rate cuts.

Despite a hesitant start to 2024, following a remarkable performance in the previous year, the market has shown resilience. Investors, initially cautious due to mixed economic signals and the Federal Reserve’s stance on interest rate cuts, have found renewed confidence. This shift in sentiment was further bolstered by a positive forecast from Taiwan’s semiconductor giant TSMC, focusing on advancements in artificial intelligence, propelling the S&P 500 to close at its highest in over two years.

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Nokia’s stock jumps more than 10%

Nokia ($NOK) ADRs gained over 10% higher after the Finnish telecommunications company announced a $650 million share buyback program.

This announcement comes despite a notable dip in the company’s financial performance in the fourth quarter of 2023, where it saw a 27% year-on-year decrease in operating profit, landing at 846 million euros, and a 23% fall in net sales to 5.7 billion euros. Nokia CEO Pekka Lindberg attributed this downturn to several factors including the broader macro-economic landscape, rising interest rates, and issues with customer inventory.

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Gold prices fall, market awaits GDP and inflation data

Gold prices ($XAUUSD) fell to a one-week low, with spot gold dropping from $2,026.86 to $2,015.83 per ounce, and U.S. gold futures decreasing from $2,028.15 to $2,016.25.

This decline is attributed to the U.S. economy’s unexpected resilience, demonstrated by robust business activity and a decrease in inflationary pressures. The dollar index’s rise to a six-week high, alongside steady U.S. 10-year Treasury note yields, has lessened gold’s appeal to holders of other currencies. Despite initial expectations of a Federal Reserve rate cut in March, markets are now leaning towards a possible easing in May. Investors remain watchful of upcoming U.S. GDP data, the European Central Bank’s policy decision, and personal consumption expenditure data, which could further impact gold prices.

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EUR/USD backslides after ECB rate hold

The $EURUSD pair witnessed a notable decline, falling back to the lower region of 1.0850, as the European Central Bank (ECB) decided to maintain steady rates for the third consecutive meeting. This decision, combined with a dovish stance expressed by ECB President Christine Lagarde, has led to increased market speculation about deeper rate cuts by the ECB in the coming months.

In contrast, the US economy displayed stronger-than-expected growth in its fourth-quarter GDP, further influencing the currency pair’s movement.

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This concludes our weekly recap. Have a great weekend and see you next week! 👋