The major US stock indeces declined on Monday, weighed down by drops in technology and other mega cap stocks. Investors await a week of significant events, notably central bank summits and a flurry of earnings announcements. This week will also feature highly followed employment statistics from the United States.
The technology sector declined 1.7%, along with most other industries. Apple, Amazon, and Alphabet, which are all scheduled to release quarterly results later this week, declined by more than 1%.
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The Dow Jones Industrial Average sank 125.11 points, or 0.37%. S&P 500 lost 38.49 points, or 0.95%, to 4,035.07 (still above 4000). Nasdaq Composite slid 184.56 points to the red with 1.59% decline. The rise in US Treasury rates added to the pressure on technology stocks, which had otherwise risen to start the year after a difficult 2022.
Dollar brings in traders as risk sentiment increases
The US dollar saw a slight gain at the start of the week, supported by a gloomy market sentiment. The US dollar keeps its bullish leaning ahead of the Asian trading, but caution prevails as this week’s macroeconomic calendar has many high-profile events.
Australia will disclose December Retail Sales early on Tuesday, with a 0.3% monthly decline anticipated. China will also release Manufacturing as well as Non-Manufacturing PMIs. The first is anticipated to increase the previous 47 to 49.7, while service production is anticipated to increase from 41.6 to 51. AUD/USD edged lower 0.59% on Monday, maintaining the negative bias, hinting at further slides ahead.
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The Fed, ECB, and the BoE will announce their rate hike decisions on Wednesday and Thursday. Currently, market participants anticipate a 25 point rate increase for Fed. A 50 point rate rise is completely priced in for the ECB, while a 50 point rate hike is anticipated for the BoE. EUR/USD slid to the red 0.18%, closing below 1.0900. GBP/USD also posted a red end with a 0.39% decline at 1.2349.
Oil dumps as Russia sheds light on price cap
The Kremlin stands by it’s announcement it will not abide to Western pricing limitations on Russian oil. However, the administration of President Putin permits Russian oil corporations to trade as much as they can for a price they can move the product.
With the G7’s price cap already placing a barrel of Russian Urals between $25 and $35 below the global crude benchmark Brent, this essentially enables businesses to use necessary price lowering to be able to sell the oil in their inventory.
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This discrepancy between the official statement and the actual actions taken moved oil down, continuing the dip from last week’s close. WTI from New York crude futures for March delivery closed in the red $1.78 or 2.2% lower. UK’s Brent crude futures was lower by $1.90, or 2.2%.
Natural gas Henry Hub futures for March delivery does not seem to get a break from the weather forecasts. It may still see some heating needs, however, today, the price fell over 4.5% again. Gold futures also closed 0.39% in the red, with silver futures for March being the only green commodity, posting a 0.19% gain.
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