Daily Market Brief 22-11-22

Daily Brief, January 24, 2022.

Japanese Factory Activity Contracted for the Third Month In A Row.

The factory activity in Japan declined for the third consecutive month in January, with exports continuing to weaken amid a deteriorating global outlook. The “Jibun Bank” purchasing managers’ index for the manufacturing sector recorded 48.9 in a preliminary reading after adjusting for seasonal factors, unchanged from the final reading in the previous month.

The index remained below the 50-point barrier, which separates growth from contraction, for the third consecutive month after the final figure for December recorded the fastest decline in 26 months. Sub-index data showed factory production and new orders fell for the seventh month in a row, albeit slower than last month. The Reuters Tankan poll last week showed the first negative reading of business confidence in major Japanese companies in two years, amid deteriorating conditions abroad and rising living costs.

In contrast, the growth of the services sector accelerated for the fifth month, thanks to the boom in tourism and the easing of COVID-19 restrictions.

The service sector purchasing managers’ index, released by Jibun Bank, rose to 52.4 in January from 51.1 in the previous month, marking the highest level in three months.

Elon Musk on Trial: The Saudi Sovereign Wealth Fund Wanted to Take Tesla Private.

Elon Musk testified in federal court in San Francisco on Monday that he was sure he had support from Saudi financiers in 2018 to take Tesla private. Musk defended allegations that he defrauded investors by tweeting about the plans to take Tesla private, which later collapsed.

At the trial, Elon said that on July 31, 2018, he met with representatives of the Saudi Sovereign Wealth Fund at the Tesla factory in Fremont, California. Musk confirmed that he did not discuss the value of the acquisition, but the Saudi representatives clarified that they would do what was necessary to complete the purchase.

“The PIF unequivocally wanted to acquire Tesla,” he said.

The company’s shareholders believe they have incurred millions of dollars in losses after Musk tweeted on August 7, 2018, that he was taking Tesla private for $420/ share, ensuring that funding was secured. Tesla’s share price rose after Musk’s tweets and later fell as it became clear that the takeover wasn’t going to happen.

A nine-person jury will decide whether the billionaire artificially inflated Tesla’s share price by touting the possibility of a takeover. They will also determine what to charge him for shareholders’ reimbursement if proven guilty.

Gold Rises Along with the Decline in the Dollar Strength.

Gold prices recorded an increase on Tuesday, January 24, amid a decline in the dollar, and the prices of the precious metal in the near term will likely remain dependent on US economic data that is expected to be published this week and may affect the Federal Reserve’s strategy regarding interest rates. Gold in spot transactions rose to $ 1940.04 an ounce

Major economic centers such as China and Hong Kong remain closed for the Lunar New Year holidays.

The dollar index fell 0.2%, making bullion priced in the greenback cheaper for holders of other currencies. Investors are awaiting estimates for US gross domestic product growth GDP for the fourth quarter of last year, which will be published on Thursday. Low interest usually supports gold prices, reducing the opportunity cost of holding non-yielding assets.

As for other precious metals, silver rose in spot transactions by $23.52 an ounce. Platinum rose to $1,055.25. Palladium rose to $1,712.57.

Oil is Slightly Higher with a Focus on Chinese Demand.

Crude oil prices rose slightly in early Asian trading on Tuesday, January 24, in a market focused on the prospects for recovery in Chinese demand, the world’s largest oil importer, and the global economic outlook ahead of the company’s earnings. Brent crude rose 5 cents to $88.24 a barrel, while US crude rose 13 cents to $81.75 a barrel.

Crude oil prices in physical markets started the year higher as China, which is no longer operating under coronavirus restrictions, showed signs of more buying. Moreover, traders feared sanctions imposed on Russia could lead to tighter supplies. Investors returned to oil futures contracts at the fastest rate in more than two years as fears of a global business cycle contraction eased.

US investors are confident that the Federal Reserve will implement a slight increase in interest rates next week even as it remains committed to reining in inflation rates, which recent data shows are slowing. This week, traders are watching for more business data indicating strength in global economies during earnings reporting season.

Netflix Stock Continues its Gains After Positive Quarterly Business Results.

Netflix stock rose during trading on Monday and consolidated its gains, supported by the company’s recent announcement of quarterly business results that exceeded expectations. Last week, Netflix announced a profit of about $55.2 million in the previous quarter of last year, compared to about $607.4 million in 2021.

Excluding some items, the company disclosed adjusted fourth-quarter earnings of 12 cents per share, while analysts had expected earnings of 45 cents per share. Netflix added that its revenue rose to $7.85 billion from $7.71 billion in the same year period of 2020.

During yesterday’s trading session, Netflix shares rose by 4.7% to $358.6.

US Stocks Closed Higher, Supported by Technology Stocks.

Wall Street closed substantially higher on Monday, supported by a rally in technology stocks, as investors kicked off a busy week of earnings with renewed enthusiasm for stocks driving the market’s momentum, which had taken a hit last year.

Based on preliminary data, the S&P 500 index closed up 46.75 points, equivalent to a 1.18% increase, to 4019.36 points. The Nasdaq100 Index increased by 223.34 points, or 2%, to 11363.77 points. Dow Jones Industrial Average US30 rose 252.36 points, or 0.76%, to 33,627.85 points.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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