Equity markets dropped on Wednesday on concerns about the recent Fed’s official hawkish remarks on the future of interest rate paths. This sent pressure, especially on Nasdaq, which fell around 1.7%.
Interestingly, S&P 500 has often seen a constant stream of sellers between the 4100 and 4200 levels, and it will be crucial that we hold above this threshold. Fed Williams did highlight that if market conditions are still pointing to elevated inflation, the rate hike cycle should continue. He pushed back against the hope of a Fed’s pivot. So it hit on the bulls hard.
We are exploring offloading some positions at a loss as we intend to go lighter with next week’s CPI in sight as we consolidate our positions.
💰Disney: It’s no fantasy this time🥃
Shares of the entertainment popped higher in after-hours as earnings results signal progress. It plans to axe jobs and explore the reinstatement of the dividend policy. These are two pieces of investor-friendly moves.
A grey area is the total number of Disney+ paid subscribers, which showed a decline of 1% to reach 161.8 million. Nonetheless, this is still higher than the projected 161.1 million.
📱The battle of AI: Alphabet and Microsoft💻
Shares of the search giant fell sharply after there became increasing uneasiness over the intense competition from a revitalized Microsoft Bing search. The possible inclusion of ChatGPT into Microsoft’s Bing can help to search for information and other digital assets more accessible.
As Microsoft unveils a dramatically upgraded version of Bing, which tap onto the prowess of ChatGPT, there is a real competition that Alphabet has to overcome. Moreover, there appeared to be news of a result glitch by Google Bard, a new chatbot, which concerns its reliability.
📮What are our dishes today? 📖
At 9.30 pm, we will have Initial Jobless Claims, which we expect to jump to 190K from 183K. We will need a rise in this figure to see evidence of a softer labour market. However, the figure should ideally not be too high, too, so it evokes fear of a recession and a hard landing in the economy.
If we achieve that, a goldilocks situation will present itself for the equity market.
It is 9 Feb, Thursday, 9 am in Singapore and 8 pm in New York. The market has torrential news of development on the macroeconomic front and the battle of AI among tech giants. We hope you have a splendid trading day ahead too!
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