London, Tuesday, 18 January 2022 -
US Markets summary
Three major US market indexes all fell over 2%, hitting multi-week lows, weighed down by financial stocks following poor earnings reports and technology stocks amid rising Treasury yields. As many investors believe the Fed will need to tighten monetary policy sooner than expected, the benchmark 10-year note hit 1.86 percent, its highest level since January 2020. Meanwhile, the earnings season was picking up steam. Goldman Sachs' earnings and profits fell short of expectations, sending the bank's stock down 8%, while Bank of New York Mellon's earnings beat expectations.
At the same time, Microsoft's stock fell 1.2 percent after the company announced a $68.7 billion plan to acquire Activision Blizzard, a video game company. Gap also dropped more than 7% after Morgan Stanley cut the stock from "equal-weight" to "underweight." The Dow Jones Industrial Average fell more than 550 points to its lowest level since December 20th, the S&P 500 Index fell 1.8 percent to levels not seen since December 3rd, and the Nasdaq Composite fell 2.3 percent to its lowest level since October 12th.
European Markets summary
Government bond yields continued to climb, with the German 10-year Bund yield touching spring 2019 highs near 0%. European equities markets closed roughly 1% lower on Tuesday, erasing a 0.3 percent gain the previous day. While the earnings season begins, investors are concerned about greater policy tightening in the United States. Oil futures rallied to a more than seven-year high on concerns about escalating tensions in the Arabian Peninsula, while travel and technology companies fell 2.2 percent and energy stocks jumped 0.6 percent.
In terms of data, the ZEW economic confidence survey in Germany rose to 51.7 in January, exceeding market estimates of 32.0. In the meantime, the Economic and Financial Affairs Council will meet in Brussels on Tuesday, a day after German Chancellor Olaf Scholz and Spanish Prime Minister Pedro Sanchez pledged to work closely together on continental issues despite their disagreements over EU fiscal rules.
U.S. Stock Market Indexes
S&P 500: −85.74 (1.84%) at 4,577.11 as at 18 Jan, 16:18 GMT-5
Nasdaq: −386.86 (2.60%) at 14,506.90 as at 18 Jan, 16:19 GMT-5
Dow Jones: −543.34 (1.51%) at 35,368.47 as at 18 Jan, 16:19 GMT-5
European Stock Market Indexes
STOXX Europe 600: −4.14 (0.85%) at 480.37 as at 18 Jan, 17:30 CET
FTSE 100 in London: −47.68 (0.63%) at 7,563.55 as at 18 Jan, 16:35 GMT
DAX 30 in Germany: −161.16 (1.01%) at 15,772.56 as at 18 Jan, 17:55 CET
CAC 40 in France: −67.81 (0.94%) at 7,133.83 as at 18 Jan, 18:05 CET
FTSE MIB 30 in Italy: −205.28 (0.74%) at 27,483.28 as at 18 Jan, 17:35 CET
IBEX 35 in Spain: −57.10 (0.65%) at 8,781.60 as at 18 Jan, 17:38 CET
Ten-year U.S. Treasury note: +0.90 bps to yield 1.865%
Dollar index: +0.50 or 0.52% at 95.76 as at Jan 18, 2022 at 4:16 p.m. EST
VIX volatility index: +3.69 (19.23%) at 22.88 as at 18 Jan, 15:11 GMT-6
Brent crude: +0.69 or 0.79% at $88.19 per barrel as at Jan 18, 2022 at 9:19 p.m. GMT
West Texas Intermediate: +2.38 or 2.84% at $86.22 as at Jan 18, 2022 at 4:20 p.m. EST
Gold: -5.71 or -0.31% at 1,813.66 an ounce
Silver: +0.45 or +1.96% at 23.48 an ounce
Bitcoin: +68.10 (0.16%) at $42,285.50 as at 18 Jan, 21:30 UTC
Ethereum: −45.15 (1.41%) at 3,165.83 as at 18 Jan, 21:30 UTC
(Written and edited by: The Decision Maker)