Daily Markets: January Inflation and Geopolitics Add to Market Pressures

The big picture today

Asian markets closed mixed today with Taiwan’s TAIEX up 0.50%, Japan’s Nikkei 0.24% and China’s Shanghai Composite 0.04% while India’s Sensex fell 2.62%, South Korea’s KOSPI was down 1.49% and Hong Kong’s Hang Seng closed the day down 1.24%. . By midday, European stock indices are down across the board and US futures are pointing to a soft open.

Investors are starting the week facing a confluence of factors weighing on global equities, indicating a continuation of last week’s selloff. The January Flash PMI readings for the UK, Eurozone and Japan confirm that the omicron variant is weighing on economic activity in these regions, and that inflationary pressures in the manufacturing and services economies persist. Geopolitical pressures are also high since the US State Department ordered the families of diplomats and some US Embassy staff in Ukraine to leave the country. According to reports, in response to Russia continuing to build up its forces near Ukraine, President Biden is considering sending troops, warships and planes to Eastern Europe. And earlier this morning, the United Arab Emirates (UAE) Ministry of Defense announced that its air defense forces had intercepted and destroyed two ballistic missiles fired by the Houthi terrorist militia that were targeting the UAE.

On a lighter note, the weekend’s NFL games featured lower-than-normal overtime rules in the NFL. Playing the clock is our feeling. Keep the “Golden Goals” in football. Whether you’re a fan or not, you must feel sympathy for Buffalo.

Data download


Speaking to the World Health Organization’s board, Director-General Tedros Adhanom Ghebreyesus said it’s dangerous to assume the pandemic is nearing its endgame as the conditions are ripe for Covid- 19 turns into new variants.

Pfizer (PFE) CEO Albert Bourla thinks an annual COVID-19 vaccine might be better than frequent boosters in terms of public health.

Citigroup (C) asks all employees in the New York Tri-State Area to return to the office on February 7. According to reports, the company requires all employees to be fully vaccinated against COVID-19 and will fire those who do not comply.

International economy

Today we get a preliminary update on Eurozone PMI figures as reported by major markets and the EU itself.

  • France announced preliminary PMIs for manufacturing and services for January, both of which came in below expectations. The manufacturing PMI came in at 55.5, 0.20 below consensus and 0.10 lower than the previous reading while the services PMI came in at 53.1, 2.7 lower than expected and close. 4 points less in December.
  • Germany released preliminary manufacturing and services PMIs for January, both beating expectations. The manufacturing PMI came in at 60.5, 3.8 above consensus and 3.1 above the previous reading while the services PMI came in at 52.2, 4.2 above expectations and 3.5 points above December.
  • The preliminary Eurozone manufacturing and services PMI for January was mixed, with the manufacturing PMI beating expectations of 1.6 to reach 59.0, a full point ahead of the previous reading while the services PMI edged up. was at 51.2, a full point below consensus and almost 2 full points below the prior month.

The preliminary UK manufacturing and services PMI for January was mixed, with the manufacturing PMI coming in at 56.9, 0.10 below expectations, a full point below December, while the services PMI came in at 53.4, 0.40 above consensus and 0.20 below the previous month.

Last night, Japan released its preliminary manufacturing PMI for January at 54.6, 0.30 higher than the previous month.

Domestical economy

In terms of economic data for the United States, we will receive the latest national activity index from the Chicago Fed and the January Flash PMI report from Markit Economics. As much as investors will focus on key readings, which are expected to fall month-over-month to 56.7 for manufacturing and 54.8 for services, so will comments on input cost inflation, the need increasing prices, lead times and supply chains will be other areas of focus.

House Speaker Nancy Pelosi (D-CA) acknowledged that smaller discussions of the Build Back Better Act would be put on the back burner while they discuss other topics such as China’s competitiveness and the government funding.

Goldman Sachs (GS) estimates that inflation could cause the Fed to hike rates more than four times this year.


US stock markets ended their toughest week since March 2020, the start of the pandemic, on a weak note. The S&P 500 fell 1.9% on Friday, adding to the week’s losses, while the Nasdaq Composite fell 2.7%, the Dow Jones Industrial Average lost 1.3% and the Russell 2000 closed higher. down 1.8%. Eight of the 11 S&P 500 sectors fell at least 1.0%, including the Communication Services sector with a 3.9% decline while the Consumer Staples sector made a very modest gain for the day.

Stocks to Watch

Before the opening bell kicks off the trading day, the Bank of Hawaii (BOH), Philips (PHG), and Halliburton (HAL) will publish their latest quarterly results.

According to Young Liu, the president of Hon Hai Accuracy (HNHAF), the world’s largest electronics and key supplier Apple (AAPL) partner, Hon Hai may achieve “unprecedented” performance in the current quarter. Other key customers of Hon Hai include Dell (DELL), Sony (SONY), and Nintendo (NTDOY).

Telecom giant Vodafone Group (VOD) reportedly approached rival Three UK over a multi-billion pound takeover.

Retail-focused private equity firm Sycamore Partners is reportedly considering a potential bid for Kohl (KSS) following the offer of $64 per share made by Acacia Research Corp. (ACTG) which is controlled by activist hedge fund Starboard Value.

Amid the pandemic-driven cycling boom, KKR & Co. (KKR) agreed to buy the Dutch bicycle manufacturer Accell Group SA (ACGPF) for $1.8 billion.

RadNet (RDNT) acquired two unrelated Dutch radiology AI companies, Aidence Holding BV and Quantib BV, as it focuses on clinical solutions for screening for lung cancer, prostate cancer and neurodegeneration.

the New York Post reports Wynn Resorts (WYNN) is seeking to sell its WynnBet online gambling app after dropping a deal to take it public via a SPAC bid.


Semiconductor company Credo (CRDO), which provides high-speed secure connectivity solutions, aims to price its 25 million-share IPO this week in the $10-$12 range. Readers interested in learning more should visit Nasdaq’s Latest and Upcoming IPOs page.

After today’s market close

Crane (CR), IBM (IBM), Logitech International (LOGI) and Steel Dynamics (STLD) will be among the two scoops of companies declaring their quarterly results. Those interested in learning more about which companies release their reports when head to the Nasdaq earnings calendar.

on the horizon

tuesday january 25

  • Germany: Current IFO Assessment and Business Climate Indices – January
  • United States: FHFA House Price Index – November
  • United States: Consumer confidence – January

Wednesday January 26

  • US: Weekly MBA Mortgage Applications
  • United States: New home sales – December
  • United States: EIA Weekly Crude Oil Inventories
  • United States: announcement of the Federal Reserve’s FOMC meeting

Thursday January 27

  • Germany: GfK Consumer Confidence – February
  • United States: Initial and Continuing Weekly Unemployment Claims
  • United States: sustainable orders – December
  • United States: pending home sales – December

friday january 28

  • Japan: CPI – January
  • France: Consumer spending – December
  • France: GDP – 4Q 2021
  • France: IPP – December
  • Euro zone: business climate, consumer confidence, economic confidence – January
  • United States: personal income and expenditure – December
  • United States: Michigan Consumer Sentiment Index (final)

Thought of the day

“The first half of life is learning to be an adult – the second half is learning to be a child.” ~Pablo Picasso


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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