Market Drivers – US Session 27/01/2023

Mohamed Abdelhamid 28 January, 2023 5:34 am Commodities, Forex Market, Market Update

US stocks rallied on Friday to mark another winning week fueled by better-than-expected economic growth and a pop in Tesla shares. The dollar index is now nearing a range that could lend support to the S&P 500, The USD Index latest reading is 101.922 versus the previous closing at 101.818.

Key Developments

The Nasdaq Composite jumped 0.95% to settle at 11,621.71, while the S&P 500 gained 0.25% to close at 4,070.56. The Dow Jones Industrial Average added 28.67 points, or 0.08%, to finish at 33,978.08. Tesla rose 11% Friday, and more than 33% for the week after reporting record revenue. It marked the electric vehicle stock’s best weekly performance since May 2013.

A better-than-expected fourth-quarter gross domestic product report Thursday also helped stoke hopes that the Fed could manage a soft landing. Gold failed to close Friday with weekly gain and sufficed itself with five-week gains in a row. On Friday, the precious metal closed at $1927.29 per ounce versus last Friday’s 1932.02 level.

For next week, gold investors would prefer to take some profits off the table after seeing astronomical gains this January. Earlier this week, gold was up more than 6% year-to-date, namely the precious metal had achieved the best start to the year since 2012.

Economic Data

Investors were busy digesting more economic data on Friday ahead of next week’s Fed policy decision. The personal consumption expenditures price index, excluding energy and food, showed prices rose 4.4% from a year ago, the Commerce Department said, and in line with the Dow Jones estimate. PCE is a preferred inflation gauge for the Fed.

The University of Michigan (UoM) Consumer Sentiment on its Final reading exceeded estimates of 64.6 and rose by 64.9. The survey conducted by the University of Michigan updated inflation expectations, with a one-year horizon estimated at 3.9%, while for a 5-year rose to 2.9% compared to the preliminary 3.0%,

Pending home sales increased in December for the first time since May 2022, following six months of declines in a row, according to the National Association of Realtors. All four US regions saw year-over-year decreases in transactions, with the West experiencing the largest decline at 37.5%.

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