DAILY MARKET NEWS - 17-01-2024

Ariff Azraei

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China's 2023 growth edges past targets, but December data hints at continued cooling. Although economic growth exceeded the government's 5% forecast, China's economic expansion faltered in the fourth quarter, with a weak post-pandemic rebound caused by slowing consumer spending, a distressing property market, and limited fiscal support. December's readings, including stagnant factory activity and deflationary pressures, suggest these headwinds may continue into 2024, casting a shadow over the world's second-largest economy.


Wall Street gapped down after the holiday, although only Nasdaq recovered promptly. While banks like Goldman Sachs soared on strong trading revenue, Morgan Stanley slumped on profit misses, and PNC's soft outlook dampened sentiment. Tech stocks saw Apple dip on an App Store ruling, but chipmakers like Nvidia and AMD rallied, keeping the sector afloat. Energy stocks continued to tumble in a challenging geopolitical landscape.


Hawkish Fed rhetoric sent gold sliding, extending Tuesday's 1.3% drop. The precious metal, already pressured by Waller's "don't rush" stance on easing, could find a temporary floor in surging geopolitical tensions, but its near-term trajectory hinges on bond market signals and upcoming retail sales data. The commodity market had a rough start to the year, but growing tension between countries may push the price higher.


Crude stumbles on weaker-than-expected Chinese economic data and a stronger dollar dimmed optimism, pushing Brent and WTI lower despite signs of steady refinery activity and oil bookings in the world's second-largest consumer. Meanwhile, the Red Sea conflict simmers, though its impact on benchmarks appears muted as traders navigate rerouted tankers and potentially higher consumer costs.


The dollar soared to a one-month high due to hawkish remarks from Fed Governor Christopher Waller, who undermined expectations for an imminent rate cut. The euro and yen tumbled as investors recalibrated their bets on central bank policy trajectories globally. With the Fed unlikely to rush to the rescue, the greenback is set to extend its gains in the near term.