- The Nasdaq 100 surged 1.27%, while the DJIA saw a 1.43% increase and the S&P 500 increased by 1.38%. Policymakers left short-term interest rates unchanged during last week’s Federal Reserve policy meeting. Fed Chair Jerome Powell expressed doubt about the possibility of a rate cut in March. He also stated that he does not expect it to be appropriate to reduce the target range until the Fed has gained greater confidence that inflation is moving sustainably toward their goal of 2%. Markets adjusted their expectations accordingly, with the chance of a rate cut dropping from 47.7% to 20.5%.
- The STOXX Europe 600 Index closed flat last week. The Bank of England (BoE) has indicated a potential policy easing by suggesting a consideration of lowering the key interest rate, which is currently at a 16-year high of 5.25%. The BoE removed its warning about future rate hikes, choosing to keep rates under review instead. Governor emphasized the need for evidence of inflation falling to the 2% target and staying there before implementing rate cuts.
- The CSI300 Index experienced a decline of 4.63% last week. China Evergrande, once the largest property developer, has been ordered by a Hong Kong court to be liquidated due to its failure to reach a restructuring agreement with creditors since its default on offshore bonds in December 2021. The impact on mainland China, where most of Evergrande's assets are located, remains uncertain due to its separate legal system. Analysts fear that the liquidation order, coupled with Evergrande's massive debt of more than USD 300 billion, could pose risks to China's financial system and erode confidence in the housing industry.
The US commercial real estate scene is showing signs of a downturn.
Take the Xerox building in Washington DC, purchased for $145 million in 2011, now changing hands for a mere $25 million. The new owner's game plan? Transform it into an apartment building.
These headlines are dropping daily and it's not just for show. If this trend takes off, it could take the banking industry with it. Accordingly, regional banks are already (and once again) under pressure, following nearly a year of relative calm.
Great overview of last week's financial landscape ??! As Warren Buffett once said - The stock market is designed to transfer money from the Active to the Patient. Patience and a clear understanding of your investment goals are key, especially in times of uncertainty. Keep sharing these insights! ?? #InvestWisely #PatiencePaysOff