Archives of “January 2020” month

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Major indices give up most of the day’s gains into the close

  
Analysis, US Market

S&P index ends lower on the day. NASDAQ/Dow indices up marginally.

The major US indices are ending the session mixed as gains are given up into the close:

  • S&P index fell -2.8 points or -0.09% at 3273.44
  • NASDAQ index rose 5.483 points or 0.06% at 9275.16
  • Dow +11.73 points or 0.04% at 28734.58
The S&P index and Dow industrial average are closing at session lows:
S&P index ends lower on the day. NASDAQ/Dow indices up marginally.

FOMC statement for January 2020

  
  Analysis
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The full FOMC statement for January 2020

Information received since the Federal Open Market Committee met in December indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a moderate pace, business fixed investment and exports remain weak. On a 12‑month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee decided to maintain the target range for the federal funds rate at 1‑1/2 to 1-3/4 percent. The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation returning to the Committee’s symmetric 2 percent objective. The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Patrick Harker; Robert S. Kaplan; Neel Kashkari; Loretta J. Mester; and Randal K. Quarles.

Implementation Note issued January 29, 2020

British Airways suspends bookings of direct flights to China until March

  
  Analysis
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In response to the coronavirus outbreak situation

The airline has halted bookings on its website for direct flights from London to Beijing and Shanghai until March, after warnings over travel to China.

They are still offering connecting flights though, with the layover being in Hong Kong (mostly) before passengers have to continue with a different airline.

Reuters tried to get in contact with BA on the matter, but a spokeswoman just said that they were “assessing the situation”.

If we do see more airlines and countries take more drastic measures, expect that to weigh further on the Chinese economy and in turn, the global economy to start the year.

Economic data coming up in the European session

  
  Analysis
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Good day, everyone! Hope you’re all doing well as we look to get things going in the session ahead. It’s been a tug of war in the battle of risk since trading yesterday as markets are once again now appearing to shrug off fears concerning the coronavirus outbreak.

Major currencies are trading keeping more calm with the aussie leading gains after a slightly better-than-expected Australian Q4 CPI data earlier. That said, the trimmed mean reading – RBA’s preferred measure – still remains below its target band of 2-3%.
Looking ahead, it is going to be all about the risk mood once again with little notable data releases in the European morning. But with Apple earnings keeping investors hopeful, perhaps the situation will be more calm in the hours ahead.
As such, expect coronavirus headlines to continue to dominate proceedings before we move on to the Fed later today and more key tech earnings in Wall Street.
0700 GMT – Germany December import price index
Prior release can be found here. A proxy indicator of price pressures in the German economy. A minor data point.
0700 GMT – UK January Nationwide house prices
Prior release can be found here. A general overview of housing market conditions in the UK economy. Not a major release by any means.
0700 GMT – Germany February GfK consumer confidence
Prior release can be found here. An indication of consumer morale towards the German economy, which has been keeping more subdued lately. Expectation is for the reading to reflect similar sentiment in the early stages of the year.
0745 GMT – France January consumer confidence
Prior release can be found here. A general read of confidence towards the French economy, which has been holding up decently – but not suggestive of anything stellar; which mirrors the economic performance of the country since last year.
0900 GMT – Eurozone December M3 money supply data
Prior report can be found here. A gauge of credit conditions in the euro area economy, which continues to be holding up well despite economic concerns. A minor data point
0900 GMT – Switzerland January Credit Suisse investor sentiment
Prior release can be found here. The reading measures analysts’ expectations on the Swiss economy and other economic expectations over the next 6 months. Low-tier data.
1200 GMT – US MBA mortgage applications w.e. 24 January
Weekly US housing data, measures the change in number of applications for mortgages backed by the MBA during the week. Not the biggest of data points, but a general indicator of the housing sector sentiment.
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading!
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