The major US equities benchmarks were mixed in a week of generally quiet holiday season trading. Hawkish comments from the Fed and other global central banks over the previous week continued to be a key factor weighing on markets. Stronger than expected US GDP estimates (from 2.9% to 3.2%) and US weekly jobless claims surprising modestly on the downside intensified fears of future Fed rate hikes. US Treasury 10 year yield rose from 3.48% to 3.73% during the week. Bank of Japan’s (BoJ) surprise decision to widen the allowed band around 10-year Japanese government bond (JGB) yields was seen as a driver of higher U.S. rates and a steeper Treasury curve. The Dow Jones recorded modest gains, while the Nasdaq Composite dropped nearly 2%, down three weeks in a row and down -9% month-to-date (which would be its 2nd worst December ever). Energy stocks outperformed as U.S. oil inventories came in well below consensus expectations. Consumer discretionary shares performed worst, dragged lower by a steep decline in Tesla. Shares in Europe gained slightly amid signs of slowing inflation and an improvement in consumer confidence. Japan’s stock markets fell over the week, with the Nikkei 225 Index down 4.69% as BoJ policy developments also lent support to the yen, which strengthened to about JPY 132.55 against the U.S. dollar, from around JPY 136.71 the previous week. Chinese stocks fell as a spike in coronavirus cases weighed on the country’s growth outlook. The dollar slipped modestly while cryptos were stable.
As you prepare to spend some cherished times with your beloved ones over the festive season, we send you our heartfelt wishes and look forward to many great things to come. May 2023 be filled with health, and prosperity.