USA
The U.S. economy showed resilience over the past week, with key economic indicators suggesting steady growth. Inflation data for January revealed a headline rate of 2.9%, while core inflation stood at 3.1%, reinforcing expectations that the Federal Reserve may not rush to cut interest rates. The labor market remained strong, with initial jobless claims slightly declining to 210,000. Meanwhile, the S&P 500 and NASDAQ posted modest gains, driven by strong earnings from technology companies, while the Dow Jones Industrial Average remained relatively flat due to mixed performances across sectors. Federal Reserve Chair Jerome Powell reiterated that monetary policy remains appropriate but cautioned about uncertainties in fiscal and trade policies.
Europe
European markets maintained their positive momentum, with the STOXX Europe 600 Index marking its eighth consecutive weekly gain. Economic data reflected moderate growth, with GDP figures showing a 0.2% quarter-over-quarter expansion and PMI data suggesting continued economic activity stabilization. Geopolitical developments played a significant role in shaping market sentiment, as European leaders met in Paris to discuss potential resolutions to the Russia-Ukraine conflict, boosting investor confidence. The FTSE 100 and DAX 40 posted solid gains, while the CAC 40 and IBEX 35 saw more measured advances. A decline in energy prices, partly due to progress in peace talks, provided additional support to European equities.
Japan
Japan's economy continued its recovery, with GDP growing at an annualized rate of 2.8% in Q4, exceeding expectations. Strong consumer spending and corporate investment contributed to the expansion. However, the strengthening yen, which appreciated against the U.S. dollar, posed a challenge for exporters, leading to a mixed performance in equity markets. The Nikkei 225 and TOPIX indices struggled for direction, with gains in domestic-focused stocks offset by losses in export-driven sectors. The Bank of Japan maintained its ultra-loose monetary policy stance but signaled that conditions for a potential rate hike could materialize later in the year, adding to market uncertainty.
China
Chinese equities saw mixed movements, with the Shanghai Composite posting modest gains and the Hang Seng Index in Hong Kong surging on strong technology sector performance. Optimism surrounding artificial intelligence and electric vehicle developments fueled investor sentiment, particularly after Alibaba announced a strategic AI partnership with Apple, sending its stock up 24%. Economic data showed signs of stabilization, with industrial production and retail sales improving, but concerns over property sector weakness persisted. Meanwhile, Goldman Sachs revised its outlook on Chinese growth, citing AI-driven earnings as a key catalyst. However, lingering geopolitical tensions, including U.S.-China trade policies, kept investors cautious.