US GDP data for 4Q22 came in at 2.9%, higher than the 2.6% forecast but indeed lower than 3.2% in 3Q22. This sign of economic slowdown started to emerge due to the Federal Reserve’s aggressive pace of interest rate hikes, as well as the weakening demand in the housing market as reflected in Building Permits, which contracted to 1.337 million, lower than the previous 1.351 million.
The Wall Street indices got a jolt from the 4Q22 GDP data, which emerged at 2.9%, beating the expectations of 2.6% but indeed lower than 3Q22, which reported at 3.2%. This sign of economic slowdown started to emerge due to the Federal Reserve’s aggressive pace of interest rate hikes, as well as the weakening demand in the housing market.
Inflation in Australia rose to a new 32-year high of 7.8% in the 4Q22, marking the fastest pace since March 1990. Additionally, Singapore’s inflation eased to 6.5% in December 2022 after being stable at 6.7% for the past two months and almost in line with the expectations of 6.55%.
The US stock market appeared flat, and Dow Jones Index still maintained its position above its third Support in Moving Average, inspired by Microsoft’s rebound as investors continued to digest a slew of quarterly results ahead of a key economic data release tonight, such as: 4Q22 GDP that projected at 2.6& (vs. 3.2% in 3Q22), Initial Jobless Claims, and New Home Sales (Dec.).
Fourth quarter earnings season is in full swing, with 72 of the companies in the S&P 500 having reported. Of those, 65% have beaten consensus, just a hair below the 66% long-term average, according to Refinitiv. On aggregate, analysts now expect S&P 500 earnings 2.9% below the year-ago quarter, down from the 1.6% year-on-year decline seen on Jan. 1, per Refinitiv.
Earnings reports dominated the sentiment on all three Wall Street indices, with the Dow Jones gaining 104 points. Yet, the S&P and Nasdaq edged lower despite Microsoft’s performance on a quarterly basis coming in above market expectations underpinned by its cloud business.
Signs of recession in the Western countries have been mounting as economic data for the US, UK, and Eurozone has come in below expectations, suggesting that the economy is starting to contract; while inflation rates have remained high.
The battle over the US government’s borrowing limit is likely to come to the fore as it reaches its USD 31.4 trillion limit, as emergency fund that has been used will only be sufficient until the end of June.
Wall Street indices were green with the Dow Jones closed with a plus 0.8%, or 254 points, while the S&P rose 1.2%, and the Nasdaq became the winner with 2% surge. US corporate earnings releases dominated the sentiment rolling on Wall Street, where the large tech. companies and chipmakers, including Microsoft and Intel were highlighted.
