Asset Market Trends and Key Issues - 240118

Asset Market Trends:

The New York Stock Exchange started mixed as expectations for the Fed's rate cut clashed with stronger-than-expected data and expectations for a soft landing of the economy grew. (Dow -0.13%, S&P500 +0.38%, Nasdaq +0.91%)

Bond yields rose as the Fed's rate cut expectations faded on strong U.S. economic data, with the 10-year Treasury yield rising to 4.11%. The dollar strengthened on the euro's weakness and easing rate cut outlook.

International oil prices turned bullish on OPEC's robust demand outlook, geopolitical concerns, and supply disruptions due to the U.S. winter storm. Crude oil rose 0.73% to $73 per barrel. Brent oil rose 0.4% to $78 per barrel. Gold rose on safe-haven sentiment despite the dollar's strength.

 Key Issues:

1. Rate Cut Outlook: Following stronger-than-expected December retail sales data, the Fed's Beige Book, a report on the U.S. economic situation, said "strong consumer spending has boosted the economy in recent weeks." Betting on a March rate cut fell to the 50% range.

2. Economic Indicators: As the Fed's rate cut bets eased on strong economic data, key leading indicators such as building permits and housing starts, new unemployment claims, and the Philly Fed's manufacturing index were announced.

3. OPEC Outlook: The Organization of the Petroleum Exporting Countries (OPEC) said in its monthly report that oil demand will remain robust for the next two years. The U.S. saw a sharp drop in oil supply due to a winter storm in North Dakota. Supply concerns intensified due to the conflict between Pakistan and Iran.

Today's Featured Stocks and Focus Companies:

Apple (AAPL): Apple, which had fallen due to price cuts in response to China's weak demand, gained strength as BofA presented a target price with more than 20% upside potential, along with an analysis that Apple will benefit from the increase in artificial intelligence demand in the future.