Macro update
Stocks pause after rebound:
Global equity gains lost momentum, with the S&P 500 down 0.33% and the Nasdaq 100 off 0.59%, while the Dow Jones rose 0.1% to a third straight record close.
Soft US data supports bonds:
United States (US) retail sales were flat in December versus expectations for 0.4% growth, pulling the 10-year Treasury yield down to around 4.14% and lifting the implied odds of an April rate cut to roughly 36.9%.
Yen strengthens post-election:
The Japanese yen firmed to around ¥153.3 per US dollar – up about 2.5% since Japan’s election – fuelling debate over whether currency dynamics are shifting despite record highs in Japanese equities.
AI capex concerns persist:
Alphabet fell 1.8% following a $20bn bond sale, reinforcing investor unease over heavy capital spending plans among major technology firms.
Asia mixed as earnings drive moves:
Hong Kong gained around 1% and Taiwan hit new records, while Australia’s [indices:AU200|ASX rose 1.7% as Commonwealth Bank jumped 6.8% and CSL sank 11% on weaker profit and a CEO departure.
Gold and crypto steady:
Gold moved back above $5000 an ounce, Brent crude oil held near $69 a barrel, and Bitcoin remained capped below $70,000, at roughly $67,400.
Dow Jones remains in record highs
The Dow Jones Industrial Average has seen three straight days of record highs but is beginning to lose upside momentum and may begin to slip slightly on Wednesday.
If so, the 49,653 – 49,621 support area may be revisited.
A rise to new record highs may put a 261.8% Fibonacci extension at 50,633 on the map.
Short-term outlook:
Bullish while above 48,428.
Medium-term outlook:
Bullish while above the 2 January low at 47,853, targeting the 50,600 region.
