US stocks closed lower on Friday as investors digested another hotter-than-expected US inflation report. The Producer Price Index for January rose 0.30%, above market forecasts of 0.10%, while core inflation, which excludes food and energy, increased 0.50%, higher than the expected 0.10%. “The report follows another upside surprise in consumer inflation (last week), suggesting prices are stickier than many had expected and supporting the narrative of delayed interest rate cuts by the US Federal Reserve,” Business Day added. On the corporate earnings front, shares of Applied Materials (NASDAQ:AMAT) jumped more than 6% after the company's earnings, revenue and guidance topped estimates. On the other hand, DoorDash (NASDAQ:DASH) fell 8.10% after reporting a higher-than-expected revenue decline. Meta (NASDAQ:META) and Nike (NYSE:NKE) were also in the red, logging declines of 2.20% and 2.40%, respectively. For the week, the S&P 500 and the Nasdaq lost 0.40% and 1.50%, while the Dow Jones Industrial Average inched lower by 0.20%.
Despite a hotter-than-expected PPI figure in the US, European stocks ended the week higher, with the STOXX 50 adding 0.4% to close at a 23-year high, while the regional STOXX 600 jumped 0.60% to extend its record high. Trading Economics noted that: “Tech shares led the gains on average, propelled by a 1.60% jump for semiconductor giant ASML (AS:ASML). Industrial companies also booked gains, with Safran (EPA:SAF) adding close to 3% to extend his week’s earnings-induced rally, while BASF (NS:BASF) and Air Liquide (EPA:AIRP) both added more than 1% to set the pace for chemical makers.”
Japan’s stock market shrugged off disappointing economic data on Friday, lifting broader Asian shares and ending the week on a positive note. For the second day in a row, the Nikkei ended above 38 000 points, just below its historic peak reached in December 1989. The rally was prompted by a rebound on Wall Street, despite data showing that the country slipped into a recession in 2023, losing its status as the third-largest economy in the world. The MSCI’s broadest index of Asian shares excluding Japan also rose, adding 1% for the day.
The FTSE/JSE All Share Index closed somewhat higher on Friday, mainly supported by financials, resource-linked stocks, and industrials. Business Day reported that: “Transaction Capital (JO:TCPJ) led the gains on the local bourse, buoyed by the news that it wants to raise R900m-R1.25bn by issuing and selling shares in WeBuyCars before its planned unbundling and separate listing of the profitable second-hand vehicle trader. This move will see the company reduce its 74.90% holding in the unit to 57%-67%. The company’s shares leapt 6.21% to R9.70 on Friday, bringing the gains for the week to more than 20%.” At 19h00, the rand had strengthened 0.32% to R18.87/$.
Brent crude rose above $83.30 a barrel on Friday, reaching its highest level in just over two months after geopolitical tensions in the Middle East and efforts by OPEC+ to restrict oil supply provided support. “Additionally, oil prices climbed over 1% on Thursday following weaker-than-expected US retail sales data, which triggered a dollar selloff. However, the International Energy Agency (IEA) cautioned in its monthly report that global oil demand is losing steam, citing a significant decline in Chinese demand,” Trading Economics added. Gold stabilised around $2 000 an ounce on Friday afternoon, but was still on track for a second weekly decline as strong US inflation data fuelled concern that US interest rates may not come down as quickly as many had hoped.
