SPX-Unicorn-like soft landing...for US economy
Summary of the week
We end the week on a rally of the main US indices.
$S&P 500(.SPX)$ rose 1.9%, bringing this week's decline to 0.7%.
The Nasdaq Composite jumped 2.7% to end the week in the green with a 0.6% gain.
The Dow Jones Industrial Average rose 1%, cutting this week's losses to 2.7%.
- The gains for tech stocks came as $Alphabet(GOOG)$ and Wayfair, Google's parent company, joined a long list of companies that cut staff. Alphabet rose 5.3% while Wayfair climbed 20%. Netflix also advanced 8.5% after kicking off the tech earnings season early Friday night.
- Several speeches by FED speakers took turns, for the majority in a hawkish feeling.
FED'S WALLER: WE WILL NEED TO KEEP RATES HIGH FOR LONGER RATHER THAN CUT THEM BY THE END OF THE YEAR.
FED'S WALLER: THE MARKET'S EXPECTATION FOR RATE CUTS LATER THIS YEAR IS FUELED BY OPTIMISM THAT INFLATION WILL MELT AWAY. THE FED DOESN'T EXPECT INFLATION TO MELT AWAY.
Although markets seem to be signaling that the tightening efforts are working, Fed officials in recent public appearances seemed determined to raise rates in the months ahead.
- According to a new study by the Federal Reserve Bank of Chicago, the United States and other industrialized countries may be able to bring down inflation without triggering huge jumps in unemployment that economists would otherwise have predicted.
Kansas City Fed President Esther George said the U.S. central bank does not want to raise interest rates to the point that policy becomes too tight, and agreed the economy could avoid a sharp downturn. ...
Despite the growing belief in this "soft landing", Silicon Valley CEOs are taking no chances and are laying off their employees by the tens of thousands...
Google joined the pack on Friday with its parent company Alphabet laying off 12,000 people, more than 6% of its global workforce, becoming the latest tech giant to pull out after years of bountiful growth. In the wave of culling of tech workers, some 100,000 people have lost their jobs so far...
Layoffs would be a big theme this earnings season as tech companies seek to preserve margins...
Wall Street seemed to like the tech sector on Friday, thanks in part to those tens of thousands of job losses...
- Are we seeing sector rotation...?
- In Asia, the week will be marked by the Lunar New Year: Mainland China stock exchanges close all week, while Hong Kong will only open on Thursday and Friday.
- Germany, the Ifo confidence index for January will be published on Wednesday.
- United States: first estimate of Q4 2022 GDP and durable goods orders on Thursday, then PCE inflation.
- Second reading of the University of Michigan confidence index on Friday.
Levels retained for S&P500
- Key area: 3980-4000
- Upper area: 4025-4050
- Lower zone: 3900 - 3850
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