The US stock market traded without a single trend on Friday. By the close of the stock market, the Dow Jones index decreased by 0.75% (+1.46% for the week), S&P 500 lost 0.14% (+0.18% for the week), and the NASDAQ technology index increased by 0.40% (+0.93% for the week) making a new historic high. The dollar index strengthened again. On Friday, the dollar was supported by optimistic comments from Federal Reserve officials Richard Clarida and Christopher Waller. They suggested that a faster pace of stimulus cuts may be appropriate amid rising inflation.
The Fed’s balance sheet hit a new record of $8.7 trillion. Total assets will continue to grow in the coming weeks. The Fed’s balance sheet is now 37.4% of U. GDP. Reducing the QE program leads to slower growth, but it is still growing. At the next Fed meeting, policymakers will discuss a more rapid reduction in bond purchases.
Moderna announced FDA approval for a booster dose of the COVID-19 vaccine in the United States for adults from 18 years and older.
European stock indexes were mostly down on Friday. British FTSE 100 index decreased by 0.45% (+1.69% for the week), German DAX decreased by 0.38% (+0.42% for the week), Italian FTSE MIB lost 1.17% (-1.48% for the week), French CAC 40 decreased by 0.42% (+0.15% for the week) and Spanish IBEX 35 lost 1.68% and ended the week with -3.10%. Investors’ mood was affected by the news about introducing the 10-day lockdown in Austria, which might be extended for another ten days. Austria will introduce a mandatory vaccination on February 1. Germany is considering the opportunity to follow this example. In Germany, during the week, the record was broken by the number of cases per day – more than 65,000 people. The return of restrictions to stop the latest wave of Covid-19 cases in Europe could undermine the economic recovery and cast doubt on the European Central Bank’s timetable for rolling back emergency stimulus measures.
British Prime Minister Boris Johnson is considering a diplomatic boycott of the upcoming 2022 Beijing Winter Olympics to protest China’s human rights record.
The EU would propose obliging stock exchanges to provide investors with data on stock and bond transactions, with the exchanges receiving reasonable compensation for their data.
The Turkish lira is in free-fall, which increases the cost of food, medicine, and other necessities and threatens the country’s financial system. The lira has lost 34% of its value against the dollar in eight months.
The White House says OPEC must meet current demand, ensure adequate supply in the market. Japan is preparing to release its oil reserves to the market. Amid such news, oil prices lost about 3% on Friday, declining for the fourth week in a row for the first time since Marc 2020.
In the commodities market, lumber futures (+28.01%), natural gas (+5.97%), coffee (+5.25%), cocoa (+2.65%), and wheat (+2.16%) showed the biggest gains by the end of the week. WTI oil futures (-6.33%), heating oil (-5%), platinum (-4.89%), Brent oil (-4.27%), palladium (-2.91%), silver (-2.23%), and orange juice (-2.23%) showed the biggest drop.
Asian stock indices traded flat on Friday. Japan’s Nikkei added 0.5% (-0.18% for the week), Australia’s ASX 200 gained 0.23% on Friday (-0.84% for the week), China’s benchmark CSI 300 increased by 1.08% (-0.09% for the week), while Hong Kong’s Hang Seng lost 1.07%, ended the week -1.53%, becoming the leader of the fall among Asian indices. China kept its loan prime rate at 3.85%. Last week, the People’s Bank of China asked financial institutions and businesses to strengthen their currency risk management and refrain from unilateral bets on the yuan. Currency volatility could increase in the future as foreign central banks have begun to adjust monetary policy.
Taiwan’s central bank is concerned that any increase in interest rates now could lift the local currency but will definitely follow the global tightening trend next year.
Main market quotes:
- S&P 500 (F) 4,697.96 −6.58 (−0.14%)
- Dow Jones 35,601.98 −268.97 (−0.75%)
- DAX 16,159.97 −61.76 (−0.38%)
- FTSE 100 7,223.57 −32.39 (−0.45%)
- USD Index 96.07 +0.52 (+0.55%)
Important events for today:
- China PBoC Loan Prime Rate (m/m) at 03:30 (GMT+2);
- US Existing Home Sales (m/m) at 17:00 (GMT+2);
- New Zealand Retail Sales (q/q) at 23:45 (GMT+2).
