The Dow Jones Industrial closed 0.31% higher than the previous day at 33,733.96 points. The S&P 500 broad market index was virtually unchanged at 4,016.95 points (+0.07%) and on the Nasdaq the indices lost around 0.2% on Tuesday. The focus was mainly on the ongoing "earnings season". Microsoft struggled at the end of last year, suffering from high inflation and recession worries. In the three months to the end of December, net profit fell 12% year-on-year to USD 16.4 billion, while sales rose 2% to USD 52.7 billion, the weakest growth in more than six years. Overall, however, the quarterly figures were in line with expectations. The US pharmaceutical company Johnson & Johnson slightly missed the market's sales expectations with its Q4 result but was able to compensate for this thanks to a higher margin. In the bond market, the yield on the benchmark ten-year US Treasury bond was unchanged from the previous day at 3.46%.
Stocks in the Asia-Pacific region traded mixed on Wednesday, mirroring the directional struggles on Wall Street. Stock exchanges remained closed in China, Hong Kong or Singapore for the Chinese New Year holiday. In Tokyo, the Nikkei 225 gained about 0.3%.
S&P Global's Purchasing Managers' Index (PMI) for the private sector (services and industry combined) in the US points to a continued weaker economic trend. Although the PMI improved to 46.6 points in January from 45.0 points in the previous month, it remains below the growth threshold of 50. S&P Global Market Intelligence Chief Economist Chris Williamson commented, "The US economy has entered 2023 on a disappointingly weak note as business activity fell sharply again in January."
In the eurozone, sentiment among companies surveyed by S&P Global improved again at the start of the year. For the first time in about six months, the Purchasing Managers' Index signalled economic growth at 50.2 points (after 49.3 in December).
In contrast to the euro area, sentiment in the UK deteriorated surprisingly sharply in January. The Purchasing Managers' Index fell from 49.0 to 47.8 points, its lowest level in two years. Analysts had expected a decline to 48.8. According to S&P Global, the weaker-than-expected PMI underscores the potential for recession.
|08:00||UK||Producer Prices (December, y/y)||+14.8%|
|10:00||GE||Ifo Business Climate (January)||88.6|
|16:00||CAN||Bank of Canada interest rate decision||4.25%|
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Source: LGT Bank (Switzerland) Ltd.
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