Weekly Recap 17 – 21 Jan.

US Treasury yields have been the deciding factor in the price action in global financial markets over the past week.

The yield on US ten-year bonds fell to 1.792% from last week’s close of 1.761%.

The markets have been moved by the US Treasury yields over the past week. The yield on US ten-year bonds fell to 1.792% from last week’s close of 1.761%.

The dollar index, which evaluates the performance of the US currency against a basket of major currencies, rose at 95.66 points, compared to the last weekly closing, which recorded 95.17 points.

Wall Street

US stocks fell on Friday, ending a losing week and continuing off a rough start to 2022.

The Nasdaq was hit hard by Friday’s sell-off, pushing the tech-heavy index into its worst week since 2020.

The Nasdaq fell 2.7% to 13768.92, while the Dow Jones fell 450 points to 34265.37 points, and the S&P 500 fell 1.9% to 4397.94.

The Nasdaq posted a 7.6% loss for the week, its worst since October 2020, and the Dow Jones and S&P500 closed their third consecutive week of losses and their worst weeks since 2020.

The S&P500 lost more than 8% of its record close.

This came as Netflix’s disappointing results in the latest setback for tech investors. Shares of the broadcasting giant fell 21.8% on Friday after the company’s fourth-quarter earnings report showed a slowdown in subscriber growth.

Oil

The benchmark crude rose for the fifth week in a row, to achieve about 2% last week.

Prices have risen more than 10% since the beginning of the year amid fears of tight supplies.

Brent crude futures fell 49 cents, or 0.6%, to settle at $87.89 a barrel, while West Texas Intermediate crude fell 41 cents, or 0.5%, to settle at $85.14 a barrel.

Earlier in the week, both Brent and West Texas Intermediate rose to their respective highest levels since October 2014.

Supply concerns escalated this week after Yemen’s Houthi movement attacked the United Arab Emirates, the third-largest producer in the Organization of the Petroleum Exporting Countries, while Russia, the world’s second-largest oil producer, amassed troops in large numbers near Ukraine’s border, raising fears of a possible invasion.

However, the International Energy Agency said on Wednesday that oil supply is expected to exceed demand soon, as some producers are expected to pump at or above all-time highs, while demand holds up despite the spread of the Omicron from the Coronavirus.

Gold

Gold rose during the week to return to high levels in November with the strengthening of inflation and the geopolitical risks of the precious metal, which is considered a safe haven.

And gold recorded a decline at the end of the Friday session by 0.36%, but it recorded a weekly increase of about 1%.

Prices of the yellow metal jumped to a two-month high of $1,847.72 on Thursday, January 20, with the 10-year US Treasury bond yields falling.

Investors are now focused on the US Federal Reserve meeting scheduled for January 25-26 as it plans to raise interest rates to counter inflation.

US-China

The Chinese government on Friday described the decision of the administration of US President Joe Biden to suspend 44 flights of Chinese airlines to the United States as “totally unreasonable.”

The US Department of Transportation said flights were suspended in response to China’s decision to suspend 44 flights by United Airlines, American Airlines, and Delta Airlines in recent weeks.

A spokesman for the Chinese embassy in Washington said that the policy of banning some flights after discovering cases of coronavirus was “applied equally to Chinese and foreign airlines in a fair, open and transparent manner.”

“It is absolutely unreasonable for the United States to suspend China Airlines flights on this basis. We urge the US side to stop disrupting and imposing restrictions on Chinese airlines’ regular passenger flights,” he added.

Opec

Two sources from the OPEC + group told Reuters that the group’s compliance with the agreement to reduce oil production increased to about 122 percent in December, which is a higher level than its counterpart in November, which amounted to 117%.

The two sources indicated that some member states are still finding it difficult to increase their production.

The International Energy Agency said this week that the group missed its production targets by 790,000 barrels per day in December, at a time when some producing countries in West Africa, such as Nigeria and Angola, were finding it difficult to increase production.

The two sources said that the compliance rate of OPEC countries reached 127% in December, while non-OPEC producers achieved a compliance rate of 114%.

Q4 Earnings

American Airlines reported fourth-quarter earnings that beat analysts’ forecasts and revenue topped expectations.
American Airlines announced earnings per share of $-1.42 on revenue of $9.43B.

American Airlines shares are down 3% from the beginning of the year, still down 33.65% from its 52 wee high of $26.09 set on March 18, 2021. However, they are outperforming the S&P 500, which is down 4.9% from the start of the year.

Travelers announced earnings per share of $5.2 on revenue of $7.99B. Analysts polled by Investing.com anticipated EPS of $3.86 on revenue of $7.72B.

Traveler’s shares are up 2% from the beginning of the year, still down 4.90% from its 52 week high of $168.31 set on January 10. However, they are outperforming the Dow Jones, which is down 3.6% from the start of the year.

Union Pacific announced earnings per share of $2.66 on $5.73B.

Union Pacific shares are down 4% from the beginning of the year, still down 6.49% from its 52 week high of $256.11 set on January 7. However, they are outperforming the S&P 500, which is down 4.9% from the start of the year.

WNS Holdings announced earnings per share of $0.88 on revenue of $261.2M.

U.S. Bancorp announced earnings per share of $1.07 on revenue of $5.68B

UnitedHealth announced earnings per share of $4.48 on revenue of $73.74B

ASML Holding announced earnings per share of €4.39 on revenue of €4.99B

Read: How Will Stocks Trend After Q4 Earnings?

Calendar

Prices rose by 5.0% in the eurozone in December, on a yearly basis, according to Eurostat’s final reading of the Eurozone CPI report for the month. The reading was in line with the estimates of 5.0% and 5.0% expectations. Core figures rose by 2.6%, matching the 2.6% consensus forecasts.

According to the flash estimate of the European Commission’s Eurozone Consumer Confidence survey, the headline index fell to -8.5 in January versus forecasts for a drop to -9.0 from -8.4 the month prior. December’s reading was revised slightly lower from -8.3.

There were 286,000 initial claims for unemployment benefits in the US during the week ending January 15, data published by the US Department of Labor (DoL) revealed on Thursday. This reading followed last week’s print of 231,000 (revised up from 230K) and was well above consensus market expectations for 220,000. Continued claims in the week ending on January 8 also came in higher than expected at 1635K versus expectations for a more modest rise to 1580K from 1551K the week before. The insured unemployment rate rose slightly to 1.2% from 1.1%.