EU and Asia markets mixed, crypto currently volatile
Wall.St Concerns as Alphabet, AMD slide; Europe, Asia mixed; oil falls; IMF warns of slower growth; gold, Bitcoin rise amid uncertainty.
United States Stock Concerns
Wall Street stocks tilted lower as Alphabet (GOOGL.O) fell 7.5% due to concerns over its cloud business and higher-than-expected AI investments. AMD shares dropped 10.1% after its AI chip revenue missed expectations. The S&P 500 fell 0.2%, the Nasdaq 100 lost 0.4%, and the Dow Jones declined 0.2%. Treasury yields dropped, with the 10-year yield falling to 4.42% from 4.52%, amid weaker-than-expected U.S. job openings in December. Federal Reserve Vice Chair Philip Jefferson signaled a gradual easing in policy, with two rate cuts expected this year.
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Europe
European stock markets showed mixed results as investors reacted to U.S. corporate earnings and economic indicators. The Stoxx Europe 600 remained mostly unchanged. The euro rose 0.5% to $1.0434, while Germany’s 10-year bond yield fell to 2.35%. The European Central Bank’s chief economist, Philip Lane, spoke in Washington, emphasizing inflation concerns. Key upcoming events include Eurozone retail sales data and the UK’s interest rate decision.
Asia
Japan’s Nikkei 225 edged up 0.1%, driven by Honda’s 8% surge after reports that merger talks with Nissan were abandoned, causing Nissan’s stock to drop 4.9%. The yen strengthened 1.2% to 152.48 per dollar amid renewed speculation of a Bank of Japan rate hike after December’s real wages rose 0.6% year-on-year. Chinese markets declined as investor sentiment remained weak following tariff hikes and uncertainty over a U.S.-China trade deal. The onshore yuan weakened post-holiday, while the offshore yuan strengthened for the second day.
World Economy Concerns
Global markets remained volatile due to concerns over trade wars and monetary policy shifts. The Bloomberg Dollar Spot Index declined 0.4%, while Bitcoin rose 2% to $98,504.89, and Ether jumped 5.7% to $2,790.9. The IMF projected global economic growth to slow slightly in 2025, citing inflation concerns and geopolitical tensions. Investors are closely monitoring Fed decisions and employment reports.
Oil Market
West Texas Intermediate crude dropped 1.1% to $71.87 per barrel as concerns over global demand persisted. Rising U.S. crude inventories added to supply-side worries, while OPEC signaled no immediate production cuts. Meanwhile, gold reached a new high, climbing 1.1% to $2,872.76 an ounce, as investors sought safe-haven assets amid geopolitical uncertainty.
Corporate Earnings Valuation Concerns
Alphabet’s disappointing cloud revenue report triggered a 7.5% drop in its stock, raising questions about AI investment returns. AMD lost 10.1% following weaker-than-expected AI chip revenue. Disney’s earnings topped forecasts, driven by “Moana 2” though its stock slipped 0.9%. Mattel jumped 13.5% after exceeding profit expectations. Uber’s first-quarter outlook disappointed analysts, citing currency headwinds and severe winter weather. Apple faced increased scrutiny from China’s antitrust regulators, adding to trade tensions. The “Magnificent Seven” tech giants faced valuation concerns, with their capital expenditures up 40% in 2024 compared to 3.5% for the rest of the S&P 500.
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