Stansberry Research

Thursday Afternoon Market Recap

Stansberry NewsWire

Thursday Afternoon Market Recap:

U.S. equity markets finished lower.

Economic Indicators

  • Philadelphia Fed's January Manufacturing Index posted better-than-expected figures as new orders and shipments both slightly improved. The prices paid component fell to its lowest level since August 2020.
  • December housing starts and building permits provided mixed results. The state of the housing market remains uncertain from higher interest rates, low builder confidence, and low consumer demand.
  • Initial jobless claims for the week came in at 190,000, the lowest level since the week of September 23, 2022.

Macro Commentary

  • Fedspeak remains bullish on the "raise and hold" narrative, despite the building momentum among Fed officials who are acknowledging that rate hikes may ending sooner than later.
  • The U.S. Department of Treasury announced it has begun taking extraordinary measures after hitting the borrowing limit.
  • U.S. mortgage rates dropped to 6.15%, the lowest level since September 2022.
  • Capital One Financial (COF) announced more than a thousand layoffs in its department.

Within the S&P 500 Index, eight of the 11 sectors finished lower...

European equity markets finished lower.

Economic Indicators

  • The Royal Institution of Chartered Surveyors showed that the U.K. property market is at its weakest level since 2010.
  • The Bank of England's Credit Conditions Survey showed demand for credit slowed in the fourth quarter as rates climbed higher.
  • Norway's central bank kept the deposit rate unchanged at 2.75% and confirmed an upcoming rate hike in March.

Macro Commentary

  • Bank of England Chief Andrew Bailey said that two months of declining headline inflation signals that cost pressures are easing despite a tight labor market.
  • December minutes from the European Central Bank's ("ECB") policy meeting showed that many officials were initially supportive of another 75-basis-point rate hike before agreeing to reduce it to only 50 basis points.
  • ECB's board member Klaas Knot said that there are multiple 50-basis-point rate hikes to come as inflation remains at an unsatisfactory level.

Asian equity markets finished mixed.

Economic Indicators

  • Japanese exports rose 11.5% year over year, beating estimates. But this marks its lowest growth since January 2022. Automobile exports remains the primary growth catalyst as demand in the U.S. and Europe remained strong.
  • Bank Indonesia raised its key interest rate 25 basis points to 5.75%. This marks the highest rate since the start of the pandemic.
  • Bank Negara Malaysia unexpectedly kept rates flat despite the central bank reiterating that elevated cost pressures remain.
  • Australian unemployment data came in weaker than expected as a decline in part-time employment was the major driver.

Macro Commentary

  • Economists raise forecasts for China's economic growth with expectations for most provinces to reach north of 5% annual growth.
  • New Zealand Prime Minister Jacinda Ardern unexpectedly announced her resignation to leave no later than February 7.

(Narratives written as of local market close.)

Asset Snapshot

What we're paying attention to this week...

Europe

  • Germany – Producer Price Index for December (F)

Asia

  • China – One- and Five-Year Loan Prime Rates (F)
  • Japan – Consumer Price Index for December (F)

(Day of week in parentheses.)

Have a great evening!

C. Scott Garliss and Kevin Sanford