- A year of cautious optimism, maybe 2023. Inflation has moderated, gas costs have declined, and real wages are increasing. Hiring has remained robust, and the FED may soon decide to halt its war against inflation, which would be good news.
- As temperatures surpassed record highs in Europe, stocks in the US softened. $AAPL receives a thumbs down, while $AMZN receives a thumbs up. $TSLA dropped by 12.5%, and Food delivery services are leading the market.
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- The FOMC Minutes from last month will also be provided to us today. We already know that the FED has lowered the rate hike speed. Additionally, they increased their 5.1% objective for the estimated terminal rate.
- If there was any further discussion over when the FED intends to attain its terminal rate, and if any members go after a higher target, traders would try to extract any additional information. The next gradual hike is scheduled to take place on February 1.
Source: Photo by Kenny Eliason on Unsplash
Winter in Europe is warm
- In January of this year, Europe already had the warmest temperatures ever noted. Cities from Berlin to Warsaw have had their warmest January beginnings, shattering temperature records throughout the continent.
- Following Russia's invasion of Ukraine last year, European natural gas prices surged. Still, they have dropped far below their pre-war levels due to the continent's success in finding alternatives to Russian gas, widespread conservation measures, and a mild winter.
Source: Trading Economics
- German Inflation eases: Due to the government paying family gas bills in December, inflation in Germany slowed down more than was anticipated. As a result, compared to economists' predictions of 10.2%, the rate of consumer price rise was the lowest since August. The real rate, however, was 9.6%.
- As a result of signs that the number of Covid-19 cases in some of China's most populous cities may have peaked, sentiment improved. This, in turn, led to a rise in the price of Chinese equities listed on the US stock market.
- Despite market losses overall, shares of Chinese companies listed on the American stock exchange rose following relaxing scrutiny on ANT Group. The highest gains were seen by $BABA Group and $BIDU, which increased by more than 8%. Despite the market collapse, investors are still optimistic about these companies.
- According to analyst S. Senatore, China's relaxation of its zero-COVID regulations, which will result in a robust recovery, will benefit the world's largest coffee company. $SBUX will benefit from the new market thanks to its reputation, size, and technology.
- Citi's $C stock increased after Bank of America rated it as a "buy." It brought attention to the stock's favorable risk/reward ratio for investors looking for a "restructuring tale." The firm's assessment was encouraging to investors.
Source: Yahoo Finance