US stocks wrap up worst week of 2023

 

US stocks fell sharply Friday, wrapping up their worst week of 2023, after the Federal Reserve’s preferred inflation gauge showed a stronger-than-expected increase in prices last month. The core personal consumption expenditures price index, the Fed’s preferred measurement of inflation, rose 0.6 per cent in January and 4.7 per cent from the prior year, coming in above economists’ expectations. Many strategists now believe that inflation cannot come down without a broader economic downturn.

On Friday the Dow Jones Industrial Average fell by 336.99 points, or 1.0 per cent, to end at 32,816.92. The S&P 500 dropped 1.1 per cent to close at 3,970.04. The Nasdaq Composite slid 1.7 per cent to end at 11,394.94. The Dow fell as much as 510 points, or 1.54 per cent, earlier in the trading session.

The major averages also ended the week with their biggest losses in 2023. The S&P 500 was down 2.7 per cent, marking its worst week since Dec. 9. The Dow fell almost 3.0 per cent this week — its fourth straight losing week. The Nasdaq closed 3.3 per cent lower, notching its second negative week in three.

In company news, Boeing shares slipped more than 4 per cent after the company temporarily halted delivery of its 787 Dreamliners over a fuselage issue. Shares of Microsoft and Home Depot fell 2.2 per cent and 0.9 per cent, respectively.

In some positive news, shares of the maker of plant-based meat alternatives, Beyond Meat surged 10 per cent after the company posted a smaller-than-expected loss for the recent quarter despite dwindling sales and soft demand.

The next time you tweet or comment on social media- beware – because a federal court in the US ruled yesterday that emojis, specifically the rocket ship, rising chart and bag of money emjois, count as investment advice. A New York district court judge wrote in a filing that, even when the word “profit” isn’t directly mentioned, the emojis “objectively mean one thing: a financial return on investment.

In commodity news, the US has imposed new measures against Russia's metals and mining sector, including increased tariffs on over 100 Russian metals, minerals, and chemical products worth $2.8 billion, which will raise the costs for Russian aluminium to enter the US market. The move was designed to minimize market disruption and expand sanctions authorities to Russia's metals and mining sector.

The spot price of iron ore has been rising recently due to increased Chinese demand and supply concerns from Australia and Brazil.

Expectations of infrastructure and construction activity picking up from Q2 onwards are driving the demand, but the upside price potential may be limited due to expected normalisation of supply and the long-term impact of China's economic stimulus.

On Friday, the S&P 500 sectors closed mostly lower. Materials and Financials led the way, whilst Real Estate was the worst performer.
 
Futures

The SPI futures are pointing to a 0.7 per cent fall.

Commodities

Iron ore futures are pointing to a 1.7 per cent fall. Iron ore is 2.7 per cent lower at US$126.65 tonne.

Gold lost 0.5 per cent. Silver dropped 2.3 per cent. Copper fell 2.5 per cent and oil gained 1.2 per cent.

Figures around the globe

Across the Atlantic, European markets closed lower. London’s FTSE fell 0.4 per cent, Frankfurt dropped 1.7 per cent while Paris closed 1.8 per cent lower.

In Asian markets, Tokyo’s Nikkei gained 1.3 per cent, Hong Kong’s Hang Seng fell 1.7 per cent while China’s Shanghai Composite closed 0.6 per cent lower.

On Friday, the Australian sharemarket closed 0.3 per cent higher at 7307.03.

Ex-dividends

Adacel Technologies (ASX:ADA) is paying 1.5 cents unfranked
Aurizon Holdings (ASX:AZJ) is paying 7 cents fully franked
Bapcor (ASX:BAP) is paying 10.5 cents fully franked
Beach Energy (ASX:BPT) is paying 2 cents fully franked
Fortescue Metals Group (ASX:FMG) is paying 75 cents fully franked
Gryphon Capital (ASX:GCI) is paying 1.17 cents unfranked
Hansen Technologies (ASX:HSN) is paying 5 cents unfranked
Kkr Credit Income Fund (ASX:KKC) is paying 1.0938 cents unfranked
McGrath Ltd (ASX:MEA) is paying 1 cents fully franked
Perpetual Cred Trust (ASX:PCI) is paying 0.5278 cents unfranked
Peter Warren (ASX:PWR) is paying 11 cents fully franked
Regal Asian Invest (ASX:RG8) is paying 5 cents fully franked
Steadfast Group Ltd (ASX:SDF) is paying 6 cents fully franked
Sunland Group Ltd (ASX:SDG) is paying 40 cents fully franked
Santos (ASX:STO) is paying 21.8968 cents unfranked
Symbio Holdings (ASX:SYM) is paying 1.7 cents fully franked
360 Capital Enhanced Income Fund (ASX:TCF) is paying 3.5 cents unfranked

Dividends payable

HomeCo Daily Needs REIT (ASX:HDN)
Waypoint REIT (ASX:WPR)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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