Key Market Updates:
- U.S. stock market performance was mixed on Friday, with the S&P 500 and the Dow Jones Industrial Average seeing an increase while the Nasdaq Composite declined. Asia-Pacific markets also had a challenging day, with only Japan’s Nikkei 225 showing gains.
- The appointment of Kazuo Ueda as the next governor of the Bank of Japan may lead to a stable monetary policy, causing the Japanese yen to strengthen against the U.S. dollar.
- Russia announced a reduction of oil output by 500,000 barrels per day in March, leading to a 2% increase in oil prices.
- Adidas saw a 11.64% decline in shares following a warning of potentially losing 1.2 billion euros in revenue due to excess Yeezy stock. The company ended its partnership with Ye (formerly known as Kanye West) after his recent antisemitic comments.
- A discussion on the decision of investing in Disney stock is presented, with arguments for and against buying the stock presented.
The Market Situation
A slump in the U.S. stock market, an increase in oil prices, and growing U.S.-China tensions have brought back memories of the difficult times in 2022.
U.S. equities had a rough time last week. The Nasdaq saw a 0.61% decline on Friday, resulting in a 2.41% loss for the week. The Dow managed to eke out a 0.5% gain, while the S&P improved by 0.2%, but both still finished the week in the red with the S&P posting its worst weekly performance in almost two months.
Energy prices are also on the rise again. The Brent contract for April, which covers oil from Europe’s North Sea, hit $86.39 per barrel, a 8% increase for the week. U.S. West Texas Intermediate crude futures rose to $79.72 per barrel, a 8.63% increase for the week, marking its best performance since October. The prices jumped by 2% each on Friday following Russia’s announcement to cut oil production next month in response to Western sanctions.
The US-China relationship is becoming strained. After the US shot down a suspected spy balloon, the Commerce Department imposed sanctions on six Chinese aerospace companies involved in espionage activities. Over the weekend, the US military also shot down four more unidentified objects, which has fueled speculation that additional sanctions may be imposed.
Investors are closely monitoring the upcoming January consumer price index reading in the US, hoping to gain insight into the state of the economy, particularly whether or not the US will face the same struggles as in 2022. The results of the reading will offer a glimpse into the consumer sector, and whether there is any hope for the economy.