Home Forex This week in financial markets: US Big Tech flies higher, China denies stimulus

This week in financial markets: US Big Tech flies higher, China denies stimulus

by SuperiorInvest

Last week, major financial markets suffered a setback as central bankers attempted to dampen investors’ hopes for potential rate cuts.
However, the NASDAQ experienced a rebound thanks to the semiconductor sector, which marked a new all-time high pending the results reports of the main companies on the stock market.

Volatility is always around the corner with every new set of data or corporate results.

Each week in our column we will analyze the most promising stocks and futures contracts in the financial markets at the moment.

We will also analyze the overall macroeconomic situation to help you make informed decisions about your investment options.

The week started with very good news for the semiconductor sector, thanks to the increase in earnings and revenue estimates for Super Micro Computer (NASDAQ:).

This strong performance is also supported by better-than-expected quarterly results from Taiwanese giant Taiwan Semiconductor Manufacturing (NYSE:). In our Technical Analysis video, we will examine whether this positive trend will continue in the coming days.

One of the worst stocks of the weekend was Plug Power (NASDAQ:) Inc. The American hydrogen fuel cell company fell sharply after announcing a $1 billion stock sale, which will be used to support the capital of work and capital expenditures of the group.

With recent problems in the supply of liquid hydrogen in North America, the company had already raised doubts about its ability to continue operations last November. Is it possible that the company goes bankrupt?

US Rates

After a week of slowdown in the United States due to the Martin Luther King Jr. Day celebrations, macroeconomic activity showed some stability. Except for the Empire State Manufacturing Index, which fell to -43.7 instead of the expected -5. Meanwhile, global financial leaders gathered at the World Economic Forum in Davos and delivered tough speeches to counter investor expectations of a future rate cut.

However, the concept of “higher rates for longer” is relatively simple to understand. Even as stock markets remain unstable, yields have been secretly rising, as evidenced by the yield on the 10-year US Treasury bond, which has surpassed 4.07 percent.

Stock and other markets could see a slowdown in their bullish momentum as monetary easing that began in October comes to an end.

Oil

Oil futures prices rose slightly this week but remain below $80 per barrel. Tensions in the Red Sea continue with the United States carrying out new attacks against the Houthis in Yemen.

According to a recent report from the International Energy Agency, the situation in the energy market seems quite pessimistic, as strong supply is expected this year, especially if OPEC+ continues to limit production.

On the other hand, the IEA recently raised its global demand growth forecast, which is expected to increase by 1.24 million barrels per day (mbpd) in 2024, but to slow down from 2023 (+2.25 mbpd).

As far as oil prices are concerned, it is currently trading at around $78.50, while WTI is around $73. In the market, the European reference index continues to fall and stands at 28 euros/MWh for the Rotterdam TTF, while in the United States new lows are being reached for Future Natural Gas prices in the area of ​​2 dollars as we anticipated in our previous articles.

Crypto

At the time of writing, the price is around $41,000, disappointing traders’ expectations. However, Ether is registering a 1 percent increase to $2,500. Despite the approval of up to 11 Bitcoin spot ETFs last week in the United States and transaction volumes exceeding $10 billion, bitcoin is leading the way.

It is important to note that the demand for these ETFs had already driven up the price of BTC in 2023, especially when BlackRock (NYSE 🙂 joined the game last June. In the end, the strategy – buy when an event related to the asset is announced (buy the rumor) and sell when the event happens (sell the news) – as described in previous articles, it worked.

Metals and China

In the metals sector, things are not looking good as the downward trend continues. In London, a ton fell to almost $8,200, while aluminum lost ground to $2,130 and zinc continued its decline to $2,440.

Admittedly, China’s recent economic performance is mixed: Although GDP grew at an annual rate of 5.2 percent in 2023, economists expected a better outcome. Even gold futures are losing ground, hurt by rising bond yields. Currently, an ounce of gold is trading for about $2,025.

China is still battling a difficult economic situation, with a below-expected GDP forecast for 2023 and worrying news from the real estate sector.

Despite this, Beijing is avoiding stimulus measures to support the economy. This is reflected in the Hong Kong and Shanghai stock markets, which remain under negative pressure.

Hang Seng Index

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