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Markets search for fresh impulses after Powell speech

Most major stock markets saw just small moves midweek as market participants awaited further signals on monetary policy following a hawkish interview from Federal Reserve Chair Jerome Powell at the weekend. The macroeconomic calendar was thin and movement on the bond market slowed, forcing traders to look to corporate earnings for impulses.

Shane Strowmatt, LGT
Reading time
5 minutes

In New York, stock indices were mixed with mostly mild gains and losses, but the all-time highs from last week remained within reach. The Dow Jones Industrial finished Tuesday’s session up 0.4% and the S&P 500 gained 0.2%. The tech-heavy Nasdaq-100 lost 0.2%. A recent driver of stock prices – Treasury yields – moved little on Tuesday with the two-year yield trading just above 4.4% and the 10-year yield just above 4.1%.

In individual stocks, BP shares shot up 4.6% after the oil giant announced a plan to buy back stock worth USD 3.5 billion. UBS, however, failed to impress with a similar announcement of a buy-back programme totalling USD 1 billion. Shares of the Swiss bank fell 4.4% on Tuesday after the bank posted a second quarterly loss in a row in the fourth quarter of 2023 due to integration costs associated with the takeover of Credit Suisse. Switzerland’s SMI lost 0.3% on Tuesday, trailing other European stocks with the Euro Stoxx 50 up 0.8%.

In the Asia-Pacific region, stock markets were trading mixed but mostly higher as investors awaited confirmation of reports that Chinese President Xi Jinping was meeting with regulators to discuss further measures to prop up the stock market. Previous efforts have led to short-term gains, but the country’s major stock indices are trading near multi-year lows. Hong Kong’s Hang Seng Index was trading down 0.4% on Wednesday, while the Shanghai Composite gained 0.9%. China’s largest chipmaker, SMIC, was trading down nearly 9% in Hong Kong trading after the company posted a more than 50% slump in profit in the fourth quarter. Electric vehicles listed in Hong Kong were trading up on Wednesday after the Commerce Ministry announced a plan for supporting alternative energy vehicles. China’s BYD has produced more electric vehicles than Tesla for two years in a row.

Looking beyond China, Tokyo’s Nikkei 225 lost 0.1%, while South Korea’s Kospi jumped 1.3%. In Australia, the S&P/ASX 200 finished Wednesday’s session up 0.5%.

Corporate news in focus: Quarterly figures from PayPal, TotalEnergies, Vinci, Walt Disney.

Economic data in focus: Swiss unemployment rate, German industrial production, US trade balance.


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

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