Global Stocks Ease, Yields Inch Up Ahead Of US Inflation Data, Earnings

Global Financial Markets Experience Mixed Performance in Past Week: US Resilient, Europe and Japan Under Pressure

Global stock indexes mostly dipped and Treasury yields edged higher yesterday, with investors bracing for key US inflation data this week and the start of fourth-quarter company earnings.

Bitcoin rose, then fell, on confusion late yesterday afternoon over whether the US Securities and Exchange Commission had approved spot bitcoin exchange-traded funds. An SEC spokesman said the SEC has not approved spot bitcoin ETFs and that a post on its social medial platform X was incorrect.

All eyes will be on the US consumer prices report for December, due tomorrow. It is expected to show headline inflation rose 0.2 per cent in the month and by 3.2 per cent on an annual basis.

Investors are looking for clues on when the Federal Reserve may begin cutting interest rates. Expectations the US central bank could begin cutting rates as soon as March have decreased, with CME’s FedWatch Tool showing a 65.7 per cent chance for a cut of at least 25 basis points (bps) for the month, down from 79 per cent a week ago.

Ahead of the US earnings season kicking off on Friday, shares in some major US banks fell around 1 per cent.

“This is pre-earnings jitters, with valuations being quite rich, and you needing earnings growth to support these valuations,” said Phil Blancato, chief executive officer of Ladenburg Thalmann Asset Management.

The Dow Jones Industrial Average fell 157.85 points, or 0.42 per cent, to 37,525.16, the lost 7.04 points, or 0.15 per cent, to 4,756.50 and the gained 13.94 points, or 0.09 per cent, to 14,857.71.

The S&P 500 rose 24 per cent in 2023.

Boeing shares fell 1.4 per cent. The US National Transportation Safety Board said late on Monday it could not yet tell whether a recovered cabin panel that blew off an Alaska Airlines Boeing 737 MAX 9 plane during a flight last week had been properly attached.

The MSCI world equity index, which tracks shares in 49 nations, lost 0.23 per cent, while European stocks ended down 0.2 per cent.

Euro area unemployment data released yesterday came in below expectations.

US Treasury yields were marginally higher. The US Treasury sold US$52 billion (RM241.5 billion) in three-year notes, picking up a high yield of 4.105 per cent, lower than the market expected at the bid deadline, suggesting investors absorbed the note without a premium.

In afternoon trading, the benchmark 10-year yield was slightly up at 4.017 per cent.

The dollar rose 0.17 per cent against the yen to 144.46. The euro was down 0.2 per cent on the day at US$1.0928, while the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up 0.2 per cent at 102.51.

The dollar index hit a five-month low in December, with investors betting the Fed would cut rates sooner rather than later.

Oil prices climbed around 2 per cent amid ongoing worries over the Middle East crisis. Brent crude futures settled US$1.47, or 1.9 per cent, higher at US$77.59 a barrel, while US West Texas Intermediate crude (WTI) ended US$1.47, or 2.1 per cent, higher at US$72.24.

Spot gold was steady at US$2,028.95 per ounce. ― Reuters

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