Asset Market Trends and Key Issues - 240117

Asset Market Trends:

1. The New York stock market opened lower amid concerns over the global economic recovery due to the slump in Asian markets and mixed expectations for the Fed's rate cut. (Dow -0.39%, S&P500 -0.46%, Nasdaq -0.69%)

2. Treasury yields rose on Waller's hawkish remarks. The 10-year Treasury yield rose to 4.10%. The 2-year Treasury yield rose to 4.33%. The dollar index hit a one-month high.

3. International oil prices plummeted on concerns over global demand due to China's weak data. Crude oil fell 2.3% to $70 per barrel. Brent oil fell 1.2% to $77 per barrel. Gold fell on the dollar's strength. Copper fell 0.4% on concerns over the global economic recovery.

Key Issues:

1. China's growth slowdown: China's GDP growth rate in 2023 slowed to 5.2%, lower than the market estimate of 5.3%. New home sales prices and retail sales data also fell short of market expectations. Hong Kong Hang Seng Index plunged 3.7%, Shanghai Index dropped 2%.

2. Christopher Waller: The Fed's Waller said that "inflation is gradually moving toward the 2% target", but poured cold water on the market's expectations for a rate cut, saying that "there is no reason to lower the rate as fast as before".

3. Regional banks and the Fed: US Bancorp (UBNC) and Citizens Financial (CFG) kicked off the earnings season for regional banks. Following Waller, Fed Vice Chair Michael Bower is scheduled to speak. US retail sales data for December will be released.

Today's Featured Stocks and Focus Companies

Tesla (TSLA): Tesla lost its position as the No. 1 electric car maker in 2023 to Volkswagen, just a week after lowering the prices of Model 3 and Model Y in China. It also cut the price of Model Y in Germany. The stock fell 1.3% before the opening.