US stock market shows weakness again

In a speech yesterday, US President Joe Biden urged the Fed to do more to fight inflation.

Meanwhile, the focus of the market remained at the beginning of the corporate reporting season. Shares of Procter & Gamble, which makes household and consumer products, rose 3.4 percent after posting strong financial results.

Netflix Inc. will announce fourth-quarter results on Thursday. The streaming giant is expected to report earnings per share of 84 cents on revenue of $7.71 billion.

Oil prices are trading near their highs, and the fundamentals are now in favor of higher oil prices. But data from the American Petroleum Institute (API) released on Wednesday showed a 1.404 million-barrel increase in US oil inventories last week after a 1.077 million-barrel decline a week earlier. The US President Joe Biden told reporters yesterday that his administration would continue to try to lower oil prices. If today’s oil inventory data from the US Department of Energy shows an increase, oil could decline slightly.

Due to a reduction in gas supplies from Iran to Turkey, officials in the sector have ordered electricity producers using natural gas to limit consumption by 40%.

Gold and silver were surprisingly immune to the news backdrop and rising government bond yields. Usually, when bond yields rise, the precious metals fall, but not this time. Inflationary pressures are now so high that investors are buying gold as a hedge against further price increases.

On Thursday, stock markets in the Asia-Pacific region (APAC) are rising in trading amid a cut in Chinese central bank rates and positive statistics from Japan. The People’s Bank of China cut benchmark lending rates for the second month in a row in response to a slowdown in economic growth. China’s 1-year prime lending rate reduced from 3.85% to 3.7%. China’s central bank cut rates on one- and five-year loans after growth in the world’s second-largest economy fell to 4% year-over-year in the latest quarter as a result of a crackdown on rising debt among real estate developers. Investor optimism about Chinese stocks is rising as the central bank has promised to use more monetary tools to stimulate the economy, even as the Federal Reserve prepares for a series of interest rate hikes. Hong Kong’s Hang Seng Index (HK50) has jumped 3.2% since the opening trading today.

Japan’s economic performance has improved despite an increase in Omicron disease. Exports increased by 17.5% in December compared with the previous year. Auto export growth accelerated to 17.5% from 4.1% in November. Japan’s Nikkei 225 Index (JP225) increased by 1.11% from the open.