In an era of rapidly shifting economic landscapes, the week ended on a rather turbulent note, especially on Wall Street where major indices reflected the growing anxieties among investorsOn Friday, the release of non-farm payroll data presented a mixed bag for analystsAlongside this, inflation expectations surged, particularly highlighted by the University of Michigan's sentiment surveyThe Nasdaq Composite suffered a decline exceeding 1%, marking the end of a three-day rally for both the S&P 500 and the Nasdaq, after two consecutive weeks of lossesTech giants experienced considerable fluctuations, with Amazon's shares plummeting over 4% post-earnings report, while Nvidia showcased resilience with a four-day rise totaling more than 11%. Conversely, Google saw its shares slump by nearly 9% following disappointing earnings results, and Tesla's stock endured an 11% downturn over the week.
Interestingly, the China concept index defied market trends, managing a gain of over 1%, with Ideal Auto climbing nearly 5%. In foreign exchange news, the offshore Chinese yuan took a hit, plummeting almost 280 points and dipping below the critical level of 7.31 against the dollarAfter the non-farm employment announcement, the yield on ten-year U.STreasury bonds initially dipped sharply before escalating by more than 10 basis pointsThese fluctuations also corresponded with increased trade risks as the dollar index soared to new daily highs, causing the Japanese yen to fall to an eight-week low.
Commodities markets also showed notable movementsOil, having touched its lowest point of the year, continued its struggling streak, marking three weeks of successive declinesIn contrast, gold shone brightly, climbing over 1% during intra-day trading, securing a sixth consecutive weekly increase with six out of seven days hitting new highs.
The morning of the following Monday brought more news, as U.S. authorities announced a significant measure: a 25% tariff on all imports of steel and aluminum
Advertisements
This development stoked fears of an escalating trade war and raised speculations on further tariffs akin to “reciprocal tariffs” applying to all trading partnersAlthough Wall Street analysts remained optimistic, it was reported by CICC that there has been a noticeable outflow of foreign capital from Hong Kong stocks, particularly after the holiday period, with notable sell-offs in Xiaomi and SMIC shares.
Goldman Sachs, through its hedge fund leaders, indicated that while the S&P had not shown much change over the past three months, the underlying market sentiments were fatiguedIn a revealing statement, they warned that the current stock market might face complex challenges ahead, compounded by external pressures on U.S. and European markets which are likely to become the next focal points of trade policies.
In a notable leap within the finance sector, CITIC Securities announced the introduction of AI Agent, signifying the dawn of AI trading 3.0. This innovative leap could potentially reshape how trading strategies are developed in a fast-paced market.
As the dust settled on weekly trading sessions, results detailed steep declines across U.S. markets, with the Dow Jones Industrial Average down by 0.99%, the S&P 500 down 0.95%, and the Nasdaq losing 1.36%. European equities mirrored some of these tensions; the STOXX 600 index dipped by 0.38% over the week, while Germany's DAX 30 and France's CAC 40 also marked similar declinesHowever, A-share markets in China demonstrated a contrasting outlook, with the Shanghai Composite Index rising by 1.01% and the ChiNext Index surging by 2.53%.
In the bond market, the yield on ten-year U.STreasury securities rose by 5.04 basis points, closing at approximately 4.4846%, despite a weekly drop of over 5.21 basis pointsShorter maturities too experienced fluctuations, with two-year bonds climbing by 6.07 basis points.
Amid these market dynamics, macroeconomic indicators from the U.S. painted a less rosy picture
Advertisements
Non-farm payrolls in January added only 143,000 jobs, falling short of expectations, while the unemployment rate surprisingly dipped to 4%. Cumulative job growth over the past twelve months was reduced by nearly 590,000 from initial reports, contributing to the prevailing uncertainty in economic recovery narrativesAnalysts observed that January’s labor force growth, which soared by 2.2 million, set a historical record since data collection began in 1948.
The mood in the market was further dampened by February’s Michigan consumer sentiment report, reflecting figures that landed well below expectations, with inflation expectations peakingOne-year inflation estimates rose to a record 4.3%, the highest since November 2023, while five-year expectations equaled levels last seen during the inflation peak of 2022, hitting 3.3%.
Jerome Powell's upcoming congressional testimony implied a cautious approach from the Federal Reserve, emphasizing the need to stay vigilant against potential overvaluations in financial markets.
In tech developments, Apple announced plans for a developer event in Shanghai on March 25, aimed at diving deep into Apple's advancements in intelligence and machine learning technologiesDevelopers will gather to explore the latest trends and learn about optimizing user interactions with applications via Siri and other machine learning APIs.
Additionally, Google disclosed a significant breakthrough with its AI capabilities, stating that its latest AI model surpassed the performance levels required for gold medalists at the International Mathematical Olympiad in geometry problems, achieving an impressive 84% success rate.
Investment conglomerate SoftBank was reported to be readying a substantial investment of $40 billion into OpenAI, positioning itself as a major player in the AI landscapeMeanwhile, the American automotive startup scene remained turbulent, with rising concerns of bankruptcies following Canoo's recent collapse and another significant player, Nikola, teetering on the brink of failure.
Advertisements
Advertisements
Advertisements