People walk near the Nasdaq constructing in Times Square on January 24, 2023. in Recent York City.
Eduardo MunozAlvarez | View Press | Getty Images
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Markets could also be warming to growth stocks. And perhaps they should not be.
What you want to know today
- Global oil demand will pick up substantially in 2023 due to China’s rebounding economy, the International Energy Agency predicted. This might disturb the present “balance” of the oil markets.
- U.S.-China relations remain strained, but a minimum of they’re talking. Secretary of State Antony Blinken met with China’s top diplomat, Wang Yi, in the course of the Munich Security Conference. Blinken said that they had a “very direct, very clear” conversation about China’s infamous spy balloon. He added that Wang didn’t apologize for the incident.
- PRO Retail investors are flooding back to the stock market, investing a median of $1.51 billion a day, in keeping with Vanda Research. These are the stocks hottest with them.
The underside line
Stocks within the U.S. ended the week barely lower. The Dow rose 0.39% on Friday. Nevertheless it dipped 0.13% for the week, the primary time it’s lost ground for 3 consecutive weeks since September. The S&P 500 slid 0.28%, giving it a two-week losing streak. The Nasdaq Composite fell 0.58%, but it surely rose 0.59% on the week, its sixth positive week in seven.
Which brings us to the strange relationship between the economy and markets today. A widely accepted rule on Wall Street is that the Nasdaq, stuffed stuffed with tech stocks whose value rests on future earnings, is probably the most sensitive to rates of interest. Yet it is the only index that had a positive week, despite signs — like three-month highs on Treasury yields — that rates might find yourself higher than the Federal Reserve had projected. Meera Pandit, a JPMorgan strategist, said that this shows that investors are too optimistic concerning the markets, putting money into future-oriented growth stocks. Perhaps they should not be — Pandit warned that “this might be the overheat before the retreat within the economy.”
We’ll have a clearer picture of the U.S. economy this week. Earnings reports from retail giants Walmart and Home Depot will gauge consumer activity, while semiconductor firm Nvidia will indicate whether the rally in tech stocks can last. On Wednesday, minutes from the Fed meeting come out, and on Friday we’ll see the non-public consumption expenditure price index, which is the Fed’s preferred inflation reading. Investors will pore over the info to seek out out if the economy is due for a soft landing, a tough landing — or if it’ll keep cruising.
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