U.S. and Global Indexes Rest Near Record Levels Ahead of Rate Decisions

Alexander Garcia
23 Jan, 2025
Miami

Wall Street indexes meandered around the flatline as investors reviewed the latest batch of mixed earnings and braced for the chaotic new U.S. president's administration. 

The S&P 500 index and the Nasdaq Composite hovered near record highs, driven by ongoing economic strength despite the expected chaotic administration of the newly elected president.

Market participants are overlooking the narrow majority of the Republican Party in the U.S. House, a lack of a coherent plan to trim the elevated federal government debt, and the negative impact on businesses and consumers of the looming trade tariffs.

Moreover, investors are overlooking the resurgent inflation, largely driven by possible increases in tariffs on imported goods paid by the U.S. consumers, forcing the Federal Reserve to keep higher interest for longer.

On the economic front, initial weekly jobless claims increased by 6,000 from the previous month to 223,000 in the period ending January 18, the U.S. Department of Labor reported Thursday. 

Meanwhile, continuing claims advanced by 46,000 to 1.899 million in the week earlier, as outstanding claims data lagged initial claims data by one week. 

The outstanding jobless claims advanced to the highest level since November 2021, indicating job seekers are finding it harder to find a job.

 

U.S. Indexes and Treasury Yields

The S&P 500 index declined 0.6% to 6,082.93, the Nasdaq Composite eased 0.4% to 19,921.11, and the Russell 2000 index edged down 0.6% to 2,289.44.

The yield on 2-year Treasury notes edged higher to 4.31%, 10-year Treasury notes increased to 4.65%, and 30-year Treasury bonds rose to 4.87%.

WTI crude oil increased $0.47 to $75.88 a barrel, and natural gas prices edged higher by $0.08 to $4.04 a thermal unit.

Gold decreased by $10.89 to 2,744.27 an ounce, and silver edged down by $0.59 to $30.17.

The dollar index, which weighs the US currency against a basket of foreign currencies, increased by 0.13 to 108.30 and traded at a two-year high.

 

U.S. Stock Movers

Electronic Arts traded down 11.6% to $125.90 after the video game publisher estimated lower-than-expected revenue in the current fiscal year. 

Alaska Air Group Inc. gained 2.9% to $69.33, and the discount airline estimated loss in the current quarter to shrink on robust travel demand. 

GE Vernova Inc dropped 1% to $426.68 after the power company posted strong fourth-quarter results.

American Airlines Group plunged 9.7% to $16.85 after the company issued cautious outlook for the current quarter. 

Revenue and earnings surpassed market expectations in the fourth quarter, but the international airline estimated an adjusted loss per share between 20 cents and 40 cents in the current quarter, higher than expected by Wall Street analysts.   

 

UK and Germany Indexes Hovered at New Record Highs Amid Mixed Corporate Updates 

European markets edged higher in active trading as investors reviewed the latest batch of earnings. 

Benchmark indexes in Frankfurt, Paris, London, and Milan edged higher, and investors awaited the ECB's rate decisions next week.

The European Central Bank is widely anticipated to lower its key lending rates by at least 25 basis points at the end of a two-day policy meeting on January 30.

Puma, Swedebank, Associated British Foods, IG Group, Essiy, and Tryg were among the leading companies reporting corporate updates on Thursday. 

 

Europe Indexes and Yields

The DAX index moved higher by 0.3% to 21,320.58; the CAC-40 index jumped 0.5% to 7,874.92; and the FTSE 100 index eased by 0.03% to 8,542.52.

The yield on 10-year German bonds inched higher to 2.51%, French bonds rose to 3.28%, the UK gilts increased to 4.65%, and Italian bonds edged higher to 3.62%.

The euro was flat at $1.04; the British pound was flat at $1.23; and the U.S. dollar was higher to 90.75 Swiss cents.

Brent crude increased $0.41 to $79.35 a barrel, and the Dutch TTF natural gas rose by €0.17 to €49.91 per MWh.

 

Europe Stock Movers

Puma slumped 18% to €34.40 after the sportswear company reported a decline in fourth-quarter operating profit.

Associated British Foods Plc fell 2.8% to 1,883 pence after the UK-based food processor and parent company of Primark lowered its annual outlook amid struggling UK sales.

IG Group fell 3.2% to 1,039 pence after the British online trading platform posted a 30% rise in profit in the first-half of year 2025.

Sandvik AB gained 6.2% to 224.6 krona after the Swedish engineering company posted a slight increase in its fourth-quarter net income.

Swedebank climbed 3.7% to 245.6 krona after the Swedish bank posted improved earnings results for the fourth quarter.

CMC Markets plunged 18% to 216 pence after the UK-based online trading platform operator left its full-year fiscal 2025 revenue and earnings outlook unrevised.

 

Japan's Exports Jumped to Record High In December, Labor Unions Begin Spring Wage Talks 

Stock market indexes in Tokyo advanced to two-week highs ahead of the Bank of Japan's rate decisions tomorrow. 

The Nikkei 225 Stock Average increased 0.8% and the TOPIX advanced 0.5%, and both indexes extended gains for the fourth session in a row. 

The Bank of Japan officials in recent days have signaled a possible increase in rates on Friday and an upward revision in the inflation outlook. 

However, investors are divided, and many are anticipating the central bank to delay its rate increase after the ending of spring wage negotiations at large companies. 

After the historic wage increase of 5.1% in 2024, labor unions are hoping to negotiate a similar increase this year as wage talks kicked off this week.

However, smaller firms approved a far smaller wage increase, and most workers settled for a wage increase of between 1% and 2%. 

Japan's wages have been stagnant since 2000, as large Japanese companies expanded overseas and transferred manufacturing operations to China, Mexico, and the ASEAN region. 

On the economic front, Japan's exports increased 2.8% to 9.9 trillion yen, and imports advanced 1.8% to 9.7 trillion yen. 

Exports advanced for the third month in a row and reached a record high, and imports rose at the fastest pace in five months amid rising demand for energy and petroleum products.

Exports to China declined 3.0%, to the U.S. fell 2.1%, but rose to South Korea by 10.9% and to India by 5.5%. 

Imports from India soared 56.6%, from China gained 5.7%, and from the U.S. by 1.4%. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average increased 0.8% to 39,958.87, and the broader TOPIX gained 0.5% to 2,751.74. 

Tokyo Electron declined 0.6% to¥27,430.0, Advantest Corp. gained 2.4% to¥10,050.0, and Disco Corp.¥50,860.0. 

SoftBank Group Corp. advanced 5.1% to ¥10,755.0 and extended two-day gains to more than 15% after the company was named in a group that claims to invest over $100 billion in building artificial intelligence infrastructure in the U.S. 

Seven &I Holdings declined 0.9% to ¥2,422.0, Fast Retailing added 1% to ¥49,570.0, Takashimaya increased 1% to ¥1,238.0, J Front Retailing advanced 3.2% to ¥2,074.0, and Aeon Co. Ltd. decreased 0.5% to ¥3,584.0. 

Isetan Mitsukoshi added 0.8% to ¥2,520.0. 

 

China Indexes Jumped 1% After Insurance Pilot Investment Plan to Boost Stocks 

Stock market indexes in China and Hong Kong diverged after the financial regulator announced a pilot program to bolster markets. 

The Hang Seng index erased morning gains of as much as 1% to trade lower by 0.4%, and the mainland-focused CSI 300 index jumped 1% following an announcement by the CSRC. 

The China Securities Regulatory Commission announced a pilot program to invest 30% of annual new insurance premiums in China's onshore markets, potentially boosting prices of large-cap companies. 

The pilot program starting this year would see an annual increase of 10% over the next three years, said Wu Qing, chairman of CSRC, at a press conference held in Beijing on Thursday. 

The regulator said about 100 billion yuan, or about $14 billion, will be invested in the first half of this year, including about half of the funds before the start of Lunar New Year on January 29.

 

China Stock Movers 

The Hang Seng index decreased 0.4% to 19,705.52, but the mainland-focused CSI 300 index rose 1% to 3,835.34. 

Ping An increased 1.8% to HK $42.70, China Life advanced 2.2% to HK $14.04, and AliHealth gained 0.7% to HK $3.15. 

Leading tech companies advanced after the regulatory announcement to divert insurance premiums into large-cap stocks over the next three years. 

Tencent Holdings decreased 0.5% to HK $380.40, JD.com fell 0.5% to HK $150.40, and Alibaba Group Holdings rose 0.6% to HK $82.70. 

Tencent and JD.com edged up nearly 1% in the early trading but erased gains near the close of the regular trading hours. 

Fuling Technology soared more than 360% to 24.05 yuan after the disposable tableware company priced its initial public offering and lifted its shares on the Shenzhen Stock Exchange. 

The company sold 147.33 million shares and raised 781 million, or $108.7 million, after pricing its shares at 5.30 yuan.