Weekly News 2024/01/29-2024/02/02

 U.S. stocks closed higher on Friday, led by technology stocks. The Dow and S&P 500 reached new highs. The Dow rose 134.58 points, or 0.35%, to 38654.42 points; the Nasdaq rose 267.31 points, or 1.74%, to 15628.95 points; the S&P 500 rose 52.42 points, or 1.07%, to 4958.61 points. All three major stock indexes recorded gains this week. The Dow rose 1.43% for the week, the S&P 500 rose 1.38%, and the Nasdaq rose 1.12%. All three recorded gains for the fourth consecutive week. U.S. stocks have posted gains in 13 of the past 14 weeks.

On Friday, U.S. stock investors closely watched U.S. non-farm payrolls data for January. The U.S. Bureau of Labor Statistics reported that total non-farm employment in the United States increased by 353,000 in January, which was similar to the 333,000 increases in December last year. It was the largest increase since January 2023. It is estimated to have increased by 185,000, compared with the previous value.

After the release of U.S. non-farm payrolls data in January, traders lowered their expectations for an interest rate cut by the Federal Reserve.

Markets expect the Fed to cut interest rates about five times this year.

Goldman Sachs asset management analyst Lindsay Rosner said: Today's employment data and strong average hourly earnings may have given the market a shadow. The statement that the Federal Reserve is extremely unlikely to raise interest rates in March seems appropriate.

On Friday, U.S. stock investors were still digesting the financial reports of many technology giants. U.S. stock earnings reports that exceeded expectations across the board also aroused positive reactions from the market. Ultimately, analysts believe this year's market rally will likely continue and Wednesday's pullback will be just a blip on the radar screen.

 Apple's (NASDAQ: AAPL) net revenue in the first fiscal quarter was US$119.575 billion, an increase of 2% compared with US$117.154 billion in the same period last year; net profit was US$33.916 billion, an increase of 13% compared with US$29.998 billion in the same period last year. Apple's first-quarter revenue and earnings per share exceeded Wall Street analysts' previous expectations, but revenue in Greater China fell 13% year-on-year.

Amazons (NASDAQ: AMZN) net sales in the fourth fiscal quarter were US$169.961 billion, an increase of 14% compared with US$149.204 billion in the same period last year. Excluding the impact of exchange rate changes, it was a year-on-year increase of 13%; net profit was US$10.624 billion, an increase of 14% compared with the same period last year. Amazon's fourth-quarter revenue and diluted earnings per share exceeded Wall Street analysts' expectations.

Meta's (NASDAQ: META) fourth-quarter revenue was US$40.11 billion, a year-on-year increase of 25%, higher than analysts' expectations of US$39.01 billion; earnings per share were US$5.33, approximately three times the US$1.76 in the same period last year, and better than the expected US$4.91. Among them, advertising revenue was US$38.71 billion, higher than analysts expectations of US$37.81 billion. Meta also paid a cash dividend of $0.50 per share for the first time in company history. The company announced an increase of $50 billion in share repurchases.

Exxon Mobil (NYSE: XOM) had a fourth-quarter profit of US$7.6 billion, with diluted earnings per share of US$1.91. Fourth-quarter results included $2.3 billion of unfavorable recognized items, including a $2.0 billion impairment due to regulatory hurdles in California that prevented production and distribution assets from being brought back online. The impairment was partially offset by favorable tax and divestment-related items. For the full year of 2023, the company's profit was US$36 billion, and diluted earnings per share were US$8.89.

 Cryptocurrency markets are starting to move higher in 2024 after a strong rally in 2023. The cryptocurrency space took a historic step on January 10 when the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin (BTC) exchange-traded funds (ETFs).

The decision is expected to change the entire landscape as it will now allow retail investors, fund managers, and other financial institutions to trade Bitcoin without actually owning it.

The U.S. Securities and Exchange Commission (SEC) announced that the price of Bitcoin, the worlds largest cryptocurrency, rose above $47,000. However, the rally has since stalled and prices have plummeted. On February 1, Bitcoin was trading around $43,131, falling to nearly $39,600 in the last week of January.

On January 31, after the Federal Reserves FOMC meeting, the cryptocurrency fell further by nearly 2%. The Fed kept its benchmark policy rate at the current range of 5.25-5.50% and indicated that monetary tightening may be over.

However, Fed Chairman Powell also said that the central bank is unlikely to be ready for its first interest rate cut in March. This dampened investor morale, with stocks and cryptocurrencies alike taking a hit. Higher interest rates typically hurt growth industries, including technology, consumer discretionary, and cryptocurrencies.

However, the recent decline appears to be temporary as Bitcoin holds huge potential. Experts see huge potential in Bitcoin and the launch of the ETF is expected to have a positive impact on the market in the long run. Despite the volatility and risks inherent in cryptocurrencies, moves to bring cryptocurrencies into the mainstream have been highly anticipated.

Historically, this situation has led to increased scarcity, with supply decreasing causing Bitcoin's value to rise.

 On Friday, the U.S. non-farm payrolls report was strong, and it was difficult for the Federal Reserve to start cutting interest rates soon. The dollar and yields soared, and gold prices fell. Spot gold closed down 0.75% at $2,039.48 per ounce. But gold prices still rose nearly 1% this week.

The dollar index climbed 0.9%, causing gold prices to become higher for overseas investors. At the same time, the benchmark 10-year Treasury bond yield also showed an upward trend. In January, U.S. employers created 353,000 jobs, far exceeding expectations of 180,000.

Tai Wong, an independent metals analyst in New York, said gold prices have fallen less than 1% since the employment data was released. Gold prices remained firm despite the strong jobs report. But we need to wait and see if gold prices will fall significantly.

Federal Reserve Chairman Jerome Powell this week rejected the idea of a spring interest rate cut and expressed confidence that inflation will return to the 2% target. Joseph Cavatoni, market strategist at WGC, said that if interest rates remain stable and there is a lack of clear guidance, the upward momentum for gold prices may be relatively mild.

However, economists remain optimistic about the gold market's performance this year. In the second half of the year, monetary policy tightening will turn to easing, rising geopolitical risks, and active central bank purchases, all of which provide favorable conditions for gold investment demand.

Commerzbank strategists predict that the gold market will resume its upward trend in the second half of the year. The bank said it currently sees no further upside. Gold prices are expected to remain sideways in the early stages before resuming their upward trend in the second half of the year.

 On Friday, oil prices fell by more than 2%. U.S. employment data lowered the likelihood of an imminent interest rate cut, heightening concerns about crude oil demand, and a possible easing of tensions in the Middle East also contributed to the fall in prices.

The continuous contract of Brent crude oil closed at $77.61 per barrel, a decrease of 1.31%. The WTI crude oil continuous contract closed at $72.31 per barrel, a decrease of 2.16%. Both benchmark contracts are down about 7% this week.

High interest rates appear to be here to stay in the short term in major economies such as the United States and the Eurozone, which typically dampen economic growth and oil demand. According to data released on Friday, the number of new non-farm jobs in the United States in January far exceeded expectations, thus reducing the possibility of the Federal Reserve cutting interest rates in the near future. As a result, the U.S. dollar gained sharply against all major currencies.

Unconfirmed news of a ceasefire between Israel and Hamas sent oil prices down more than 2% on Thursday, adding to a weekly decline. Mediators are awaiting a response to a proposal to extend the ceasefire. An extended ceasefire could ease political risks to the Gulf and Red Sea shipping lanes, which are crucial to global energy flows.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, collectively known as OPEC+, kept their output policy unchanged, sources said on Thursday. The group will decide in March whether to extend voluntary oil production cuts implemented in the first quarter, these sources said. In November last year, OPEC+ announced a production cut of 2.2 million barrels per day in the first quarter.

 The U.S. dollar index fluctuated slightly at the beginning of the week, and the Fed's decision on Wednesday sent it sharply over 100 points. On Thursday, as the market expected a deeper rate cut in May, the U.S. dollar index was hit and once fell to the 103 mark. However, boosted by strong nonfarm data on Friday, the U.S. dollar index rebounded sharply and successfully reversed its weekly trend. It rose by more than 100 points during the day, reaching a maximum of 104.047, the highest level in seven weeks and achieving the fifth consecutive week. rise.

Meanwhile, the euro is showing the opposite trend. At the beginning of the week, the euro fluctuated around 1.0850. The fluctuations intensified from Wednesday, with huge shocks of about 100 points for three consecutive days. The euro rebounded strongly by more than 50 points on Thursday, but Friday's nonfarm data caused a fundamental change in the situation. The euro plummeted by more than 80 points, closing at 1.0786, falling for the third consecutive week. The trend of the pound this week was similar to that of the euro. The fluctuations at the beginning of the week were small, and it rebounded sharply to around 1.2750 on Thursday. However, it suffered a heavy sell-off on Friday and fell below the 1.27 mark to close at 1.2630, a decline of 0.57% for the week.

USD/JPY started to fluctuate downward this week, falling from above 148. On Thursday, USD/JPY fell to 145.89 levels. On Friday, driven by the sharp rise in the U.S. dollar index, USD/JPY broke through the 148 mark, hitting a maximum of 148.58.

After the nonfarm data was released, the market reacted strongly: the U.S. dollar index rose across the board on Friday, rising to a seven-week high.

OnePro Special Analyst

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