Customers shop for produce at Eastern Market on September 17, 2022 in Detroit, Michigan.
Matthew Hatcher/Bloomberg via Getty Images
This report is from today’s international market newsletter CNBC Daily Open. The CNBC Daily Open provides investors with everything they need to know, no matter where they are. Like what you see?You can subscribe here.
Nikkei Stock Average approaches record high level
Japan’s Nikkei Stock Average closed just below the 40,000 yen level, rising 1.9% to a new high of 39,910.82. The broader Topix index also rose 1.3%. China’s CSI300 index and Hong Kong’s Hang Seng index also rose. Overnight, Wall Street ended on a high note, with the Nasdaq Composite Index rising 0.9%, setting a new closing price record since November 2021. The S&P 500 also rose 0.52%, hitting a new all-time high. The Dow Jones Industrial Average rose 0.12%.
China’s overseas expansion
China’s Ministry of Commerce has held talks with foreign companies to address business challenges in the face of declining investment in the country. This week’s roundtable was held amid increased exchanges between the United States and China, with both sides working to ease tensions between the world’s two largest economies.
Europe’s tough profits
Europe is experiencing its worst financial year since the spread of the coronavirus. Analysts told CNBC that about half of European companies missed profit estimates in the latest earnings season, despite already low expectations, and predicted the region would continue to struggle amid high interest rates. .
The market is unlikely to collapse
Bob Parker, a senior adviser at the International Capital Markets Association, an industry group, told CNBC there are signs of a bubble in company valuations and a concentration of investors in the technology sector. But he’s not too worried that the market is on the brink of collapse, given the big difference from past bubbles.
[PRO] Europe’s “Super 7”
City chose “Super 7” The company says European stocks are similar to the Magnificent 7 in the U.S., but with lower valuations and more upside potential. “These individuals could be beneficiaries in a continued ‘shrinkage’ environment,” the bank’s strategists said.
Inflation was very high in January, which is not good for the overall economic situation.
Still, it was a relief for Wall Street that there was less bad news than expected.
The data showed that the Fed’s recommended inflation measure remained stubbornly above the central bank’s target.
Still, headline and core consumer spending price index numbers rose in line with Wall Street consensus. The lack of unexpected upside dampened investor jitters and could explain the stock market’s muted reaction to the news.
Mark Zandi, chief economist at Moody’s Analytics, said: “The core PCE deflator rose as planned in January, at a strong 0.42%. However, the increase was driven by problematic seasonal factors. It was brought to us.” Posted in X.
“Excluding measurement issues, underlying inflation appears to be close to 2.5% annually, well within reach of the Fed’s 2% target, and everything points to a moderate continuation of inflation. It’s time to start.”
However, the strength in core prices reflects lingering price pressures, so this is not welcome news for the Fed. The big question is what the latest findings mean for the central bank’s plans to cut interest rates later this year.
Atlanta Fed President Rafael Bostic said recent statistics show the central bank’s path to achieving its inflation target will be “tough.”
“They’re coming up higher than people expected, but if you look out over the long arc, the line is still going down,” he said Thursday. “That’s an important thing to keep in mind.”
This means February’s inflation data will come under scrutiny as Fed officials look for further evidence of whether January’s attention was temporary.
—CNBC’s Jeff Cox contributed to this article.
