Weekly Global Market Insights: Jan 30, 2024

US

Stocks recorded another week of gains, bringing the Dow Jones Industrial Average and the S&P 500 Index to new all-time highs and marking the 12th weekly advance out of the last 13 for the latter. The gains were relatively broad. Investors turned most of their focus to a building stream of fourth-quarter earnings reports. Major movers included Tesla, which fell sharply after the company missed both earnings and revenue estimates and warned of slower growth in 2024. Conversely, Netflix recorded solid gains after an upside surprise in subscriber additions. Benchmark 10-year U.S. Treasury note yield little changed for the week.

Europe

STOXX Europe 600 Index ended 3.11% higher on encouraging corporate results and China’s announcement of additional stimulus measures. Stocks also received a lift after the European Central Bank (ECB) left interest rates unchanged and appeared to signal a more dovish outlook. Most major stock indexes rose, with France’s CAC 40 Index climbing 3.56%, Germany’s DAX advancing 2.45%, and Italy’s FTSE MIB tacking on 0.32%. The UK’s FTSE 100 Index added 2.32%.

European government bond yields declined. The yield on the benchmark 10-year German bond slipped, as did yields on Swiss and French sovereign bonds of the same maturity.

Japan

Japan’s stock markets declined over the week, with the Nikkei 225 Index falling 0.6% and the broader TOPIX Index down 0.5%. While the Bank of Japan (BoJ) retained its ultra-accommodative stance, including its forward guidance, Governor Kazuo Ueda highlighted the central bank’s progress toward achieving sustained inflation, raising some hopes that a shift in monetary policy could be on the horizon. These expectations were tempered to a degree later in the week by a softer-than-anticipated Tokyo area inflation print, a leading indicator for nationwide price trends.

Within the context of ongoing speculation about when Japan’s negative interest rate policy could end, the yield on the 10-year Japanese government bond (JGB) rose to 0.71% from 0.66% at the end of the previous week. The yen strengthened to the high-JPY 147 range from around JPY 148 the prior week.

China

Chinese equities advanced after Beijing stepped in with forceful measures to support the economy. The Shanghai Composite Index rose 2.75%, while the blue chip CSI 300 gained 1.96%. In Hong Kong, the benchmark Hang Seng Index advanced 4.2%

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