💣Poor banks earnings hurting Dow🎲

The Dow Jones had a bad start to the week after Goldman Sachs reported lousy earnings results, pulling the index down to nearly 400 points. On some estimates, the fall of GS stocks contributes to about 159 points of Dow’s collapse. 

While a higher interest benefits banks, there has been a concern about loan loss reserves allocation, which points to a weakening economy. Likewise, rising deposit rates crippled the net interest margin. 

Pika World will be cautious of any further accumulation of bank stock as we prepare for a possible recession ahead. 

💎China’s economic data points to a clearer sky🧮

It was a good showing for China’s economy, though not the stocks, as GDP grew by 3% in 2022. It is considered a slow growth due to the prevailing severe lockdowns used to contain Covid-19 cases. 

Nonetheless, it is a mark above estimates of 2.7%, which is well ahead of expectation, reflecting a possible bottoming out in the Chinese economy. 

📊Manufacturing activity fell sharply💸

The latest Empire State Manufacturing Survey showed a -32.9 in reading for January. This is a further drop from 11.2, seen in December 2022. A reading below 0 shows contraction, and this is seen to have helped with the inflation narrative. 

This ugly data shows that the Fed monetary tightening policy is working and hopefully cools the inflation story. 

📮What are our dishes today? 📖

At 9.30 pm, the Core PPI data will be released. It is a critical piece of data that can hint at the path of inflation. We expect a further decline to 5.7% from 6.2% in the prior period. 

Likewise, core retail Sales for Dec will be released, and we should expect a decline of 0.4%. PPI data will also be released simultaneously, and a 0.1% fall is expected. 

Retail sales are expected to also fall sharply by 0.8% after declining by 0.6% in the previous period. 

At 10 pm., We will have FOMC Bostic speaking. 

The Industrial production data will be released at 10.15 pm, which is likely to show a decline of 0.1% and Manufacturing production is expected to drop by 0.3%. 

At 3 am, FOMC member Harker will speak. 

It is 18 Jan, Wednesday, at 9.05 am in Singapore and 8.05 pm in New York. It is a data-packed day, and we expect volatile movement. We hope all traders have a safe trading week ahead!