Weekly Markets TL;DR: Huge week for stocks, crypto and forex

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Table of Contents

1. Economy

  • Euro zone Growth grew 0.1%, a surprise compared to expectations for a 0.1% contraction
  • According to the IMF UK The only leading economy to go into recession in 2023
  • These are positive data points but could affect the all-important Federal Reserve meeting to us Tomorrow
  • Wednesday brings the first jobs report of 2023 and the December job opening numbers from the Labor Department.
  • A 25bps hike seems certain, but all ears will be trained on Jerome Powell’s talk about the rest of the path to 2023.

2. Stock market

  • S&P 500 Monday’s pullback is on track for its best January since 2019
  • Busy week of earnings ahead, 20% index report this week
  • McDonald’s and General Motors are among the tech giants today Apple, Meta And letters Especially important later in the week
  • Markets should see volatility tomorrow depending on the intensity of Powell’s speech regarding interest rate policy going forward

3. Crypto

  • Crypto It was muted again this week Bitcoin He still has $23K
  • Such is the sector’s correlation with interest rates that Wednesday was the biggest day for crypto so far this year
  • Bigger moves could play well with the central bank’s decidedly hawkish tone, which could potentially access bitcoin’s recent gains. The flip side is also true, the rally will continue if Powell hits a softer tone than the market expects.
  • Not much news in crypto beyond that, Bitcoin is set for its best January since 2013, unless the central bank spoils things tomorrow.

4. Other assets

  • Gold Many foreign currencies continue to trade strongly, at all-time highs
  • Wednesday’s Fed meeting will affect its hopes of a push towards the psychologically important $2,000 level
  • estate In the UK, home loan approvals fell to 35,600, below expectations for 45,200 and teetering on the lowest level since the lockdown in May 2020.
  • Forex markets were relatively quiet last week as traders braced themselves for the coming storm ahead of key rate announcements in the US (Wednesday), UK (Thursday) and Eurozone (Thursday).

5. What to look out for

  • Between the earnings season kicking into full gear, the Fed meeting on Wednesday, the jobs numbers on Friday, and even the ECB and Bank of England meeting, this week has been critical at times across the markets.
  • A watershed moment for the economy as it represents the first central bank meeting in some time where there are realistic hopes of a concrete change in the long-term plan.
  • The tech sector and crypto in particular could see strong moves, with big names ex-reporting earnings and moving hand-in-hand with crypto interest rate expectations, but all sectors should see higher moves.

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