Macro Matters – Weekly review, w/c January 15

TradeDay Macro Matters

Macroeconomic / Geopolitical Developments

• Stocks Rally, Reversing 2024 Correction Sell-Off:

After a weak start to the year, US markets rebounded, with the S&P 500, Nasdaq, and Dow Jones posting strong gains. Bargain hunting and easing inflation concerns drove the rally, complemented by a 6% weekly surge in Japan’s Nikkei 225.

• US CPI Slightly Hotter Than Expected:

December’s CPI rose 3.4% annually, slightly above expectations, driven by elevated shelter costs. Core CPI also edged higher, signaling a slower path to the Fed’s 2% inflation target.

• US Earnings Season Kicks Off:

Major banks reported mixed results:

• JPMorgan: 15% profit decline but revenues rose 12% to $39.94 billion.

• Bank of America: Profit declined, but adjusted earnings exceeded forecasts at $0.70 per share.

• Wells Fargo: Strong Q4 results with $3.45 billion in net income.

• BlackRock: Adjusted earnings beat estimates at $9.66 per share.

• Citigroup: Posted a $1.8 billion loss due to restructuring costs.

• Bank of NY Mellon: Continued trend of surpassing earnings expectations.

• Oil Rallies Amid Middle Eastern Tensions:

Brent crude surged 2.09% to $79.03 per barrel as geopolitical tensions escalated, reversing earlier declines from Saudi price cuts.

• European Central Bank Dovish Tone:

ECB President Christine Lagarde signaled rates have peaked, with potential cuts contingent on inflation stabilizing at 2%.

• SEC Approves Bitcoin ETFs:

Approval of spot Bitcoin ETFs opens the cryptocurrency market to institutional investors, marking a regulatory shift and paving the way for potential approvals of other cryptocurrency ETFs.

• Davos 2024 World Economic Forum:

Global leaders convened under the theme “Rebuilding Trust,” addressing economic growth, AI, and climate change. India played a prominent role, aligning with its “Credible India” vision.

• MLK US Holiday:

Martin Luther King Jr. Day falls on January 15, closing US equity and bond markets, with shortened futures trading hours.

What’s Ahead

Central Bank Watch:

• A quiet week for central banks, with a focus on Fed speakers ahead of their blackout period.

Macro Data Watch:

• Monday, January 15: EU Industrial Production, US MLK Holiday.

• Tuesday, January 16: German CPI, UK Employment, EU ZEW Survey, Canada CPI.

• Wednesday, January 17: China GDP, UK and EU CPI, US Retail Sales.

• Thursday, January 18: Australian Employment Report.

• Friday, January 19: Japan CPI, UK Retail Sales, Michigan Consumer Sentiment.

Earnings Watch:

• Tuesday, January 16: Morgan Stanley, Goldman Sachs.

• Wednesday, January 17: Prologis, Charles Schwab.

• Thursday, January 18: Truist Financial Corp.

• Friday, January 19: Schlumberger, Travelers, State Street.

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