skip to Main Content
Today’s Markets: A Bounce In Consumer Confidence

Today’s markets: A bounce in consumer confidence

Today's markets: A bounce in consumer confidence

Stocks rose early Friday as markets continued to chop around support levels. Wall Street rose as yields pulled back a bit; the S&P 500 held on to the 4,000 level that is so psychologically important, whilst the Nasdaq bounced around the old 11,600 support area. The FTSE 100 added around a third of a percent in early trading but was still heading for a weekly loss. US stocks are also set to finish the week lower by 1-2 per cent. The UK GfK Consumer Confidence index rebounded to its highest level since April last year, but is still well below zero. GfK said consumers have “suddenly shown more optimism about the state of their personal finances”. Too early to say the worst is over? Of course. But perhaps we can afford to be a little more optimistic. Share prices firmed slightly in Frankfurt despite evidence that Germany’s economy slowed more markedly in the final quarter of last year than previously thought. The eurozone’s largest economy shrank by 0.4 per cent quarter-on-quarter, worse than the 0.2 per cent fall previously registered. Big US inflation print due later : personal consumption expenditures excluding food and energy increased 4.4 per cent in December from a year before, down from the 4.7 per cent reading in November. We’re anticipating another 4.4 per cent for the year and 0.5 per cent month-on-month when January’s figures are released this afternoon. The core PCE index is the Fed’s preferred measure of inflation and will be watched closely for further signs of disinflation. Market watchers will pay particularly close attention to services inflation, which is regarded as stickier than goods inflation. New home sales and UoM consumer sentiment and inflation expectations are also due up later. Companies There are also news and updates from International Consolidated Airlines (IAG), Jupiter (JUP) and Cineworld (CINE). Click here to find out what’s going on War, de-globalisation and inflation There’s a good summary of where we are from BofA, a year after Russia’s invasion: “War, protectionism, de-globalization…higher inflation, higher rates.” Case in point re de-globalisation and protectionism – Tesla prioritising battery cell production in the US not Germany due to protectionist tax breaks in Biden’s Inflation Reduction Act. It’s a simple thesis here: War = inflationary de-globalisation theme = higher rates. Winners in the last year are energy, manufacturing reshoring, defence/aerospace and natural resources. While the losers are bitcoin, innovation and bonds. Of course it’s easy to blame war – but the inflationary genie was out of the bottle well before Russia moved its tanks into Ukraine. As I discussed in this column , central banks were too loose for too long financing huge Covid-related deficits and money growth was totally ignored. De-globalisation has been a force for longer still; with Brexit, and Trump’s trade wars, but the war has certainly catalysed existing trends and made them far sharper. ‘Weeks when decades transpire’ Investment bank Oppenheimer had an interesting take on Microsoft and ChatGPT. It said: “There are decades where nothing happens, and weeks when decades transpire. We’re clearly in the latter”. This was after Microsoft announced mobile versions of its AI-powered Bing and Edge browser apps. It added: “MSFT estimates that 64 per cent of searches occur on mobile phones so today’s announcement is logical and unsurprising in a methodical march to expand its existing $18bn advertising business. MSFT won Netflix’s ad-tier exclusive from a standing start, so it is not to be underestimated.”

Click here to view original web page at Today’s markets: A bounce in consumer confidence

Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

Leave a Reply

Back To Top