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Dominating interest rate worries do not allow for a clear trend

A cautious recovery in US technology stocks thanks to a strong outlook from the chip company Nvidia provided some confidence on Wall Street. Nevertheless, concerns about rising interest rates remain omnipresent and are weighing on stock market sentiment. In Japan, the inflation rate has now reached its highest level in 41 years, but the designated chairman of the Bank of Japan, Kazuo Ueda, reaffirmed that the monetary policy strategy is appropriate.

Alessandro Fezzi, LGT

Interest rate concerns remain dominant. On the New York Stock Exchange, the Dow Jones Industrial temporarily fell to its lowest level in two months, but then salvaged a daily gain of 0.33% by the close, closing at 33,153.91 points. The S&P 500 gained 0.53% to 4,012.32 points. On the Nasdaq technology exchange, the indices rose by almost one per cent on the back of strong quarterly figures and a strong sales outlook from chip and processor manufacturer Nvidia. The stock rose by around 14%. In the bond market, the benchmark yield on ten-year US Treasuries was slightly lower than the previous day at 3.87%. Meanwhile, the US dollar pushed the euro below the 1.06 mark.

In Asia, the stock markets trended inconsistently on Friday. In Tokyo, the Nikkei 225 rose by around 1.3% after a holiday. The focus was on the latest inflation figures and a speech by the designated governor of the Bank of Japan, Kazuo Ueda. Ueda emphasised that he considers the BoJ's current monetary policy strategy to be appropriate. The core inflation rate in Japan reached 4.2% in January, the highest level since 1981. In Hong Kong, the Hang Seng Index fell by around 1.4%, with the Hang Seng Tech Index losing more than 2%. In mainland China, the Shanghai Composite fell 0.7% and the Shenzhen Component fell 0.9%.

US economy grew slightly weaker than expected at the end of 2022

The annualised growth rate of the US gross domestic product in the final quarter of 2022 was 2.7%, which is slightly weaker than anticipated. In a first estimate, an expansion rate of 2.9% had been calculated. In the third quarter, the world's largest economy grew by an annualised 3.2%.

Inflation in the euro area retreats further at the beginning of the year

The rate of consumer price inflation in the Eurozone continued to weaken in January. The Eurostat statistics office in Luxembourg reported an annualised inflation rate of 8.6%. This is the third month in a row that inflationary pressure has cooled in the eurozone. In December, the inflation rate was still 9.2% and the previous record high was registered in October with 10.6%. Looking at core inflation, i.e. excluding energy and food prices, the annual rate in January was 5.3% and thus still at the highest level since the introduction of the euro.


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi,
Source: LGT Bank (Switzerland) Ltd.