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Investment Ideas 2022: Explore three key themes dominating markets where investors might uncover potential opportunities. Read More
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US equities fell last week following weak economic data and hawkish comments from the Fed. The S&P 500 finished the week –0.65% lower after posting its worst day in over a month last Wednesday and having its first back-to-back down days of 2023. In Europe, equities sold off late in the week, ending its longest winning streak since November 2021. The STOXX 600 and FTSE 100 ended down –0.08% and –0.92%, respectively, in line with disappointing earnings reports and fears of a global economic slowdown. Read More
Oil prices inched higher last week on the back of improved demand expectations from the International Energy Agency following China's reopening. Brent and WTI ended the week at $87.63 and $81.31/bbl, respectively. Gold also edged higher last week, closing at $1944.90/troy oz, in hopes of slower interest rate hikes from the Fed. Read More
US rates fell broadly across the yield curve, with economic data revealing slower activity and producer-level inflation. The 2-Year and 10-Year US Treasury yields closed at 4.18% and 3.48%, respectively. Still, the spread between the 3-Month US Treasury yield and the 10-Year US Treasury yield reached its deepest inversion level since 1980, reflecting continued growth concerns. Meanwhile, the 10-Year Bund yield rose to 2.18% as the economic outlook brightened. Read More
Major DM currency movements against the US dollar were mixed last week, even as the US dollar was relatively flat, down –0.13%. The pound sterling appreciated to $1.2396, with early signs of promise on inflation. Similarly, the yen rose to ¥129.55 against the US dollar even though the Bank of Japan’s continued dovish policy surprised markets, leading to a slide in Japanese Government Bond yields. Read More
The US Producer Price Index fell –0.5% in December, led by steep drops in energy and food prices, marking the largest monthly decline since April 2020. Similarly, price pressures eased in Europe last month with YoY inflation falling to 10.5%. In Asia, the Bank of Japan raised its inflation forecasts for FY2022-2024 but maintained its yield curve control, re-emphasizing that current price pressures reflected cost-push factors, with wage growth a better guidepost for BoJ monetary policy. Read More
US Retail Sales declined by –1.1% in December after consumer fears of high inflation and a slowing economy made for a lackluster holiday shopping season. While December sales fell more than consensus expectations, November sales were revised lower from –0.6% to –1.0% MoM. In a similar vein, US Housing Starts decreased for the fourth consecutive month and posted its first annual decline since 2009, falling –1.4% in December and –3% in 2022, respectively. Meanwhile, in Europe, UK retail sales declined by –1% MoM in December showing continued weakness in activity despite fiscal support from cost-of-living adjustments and an energy price cap. Read More
China’s Q4 GDP posted at 2.9% YoY, taking 2022 full-year growth to 3.0%, the second slowest pace in decades. After accounting for a faster-than-expected China reopening, GIR revised its 2023 growth forecast higher to 5.5% from 5.2%, previously. Read More
US weekly jobless claims dropped unexpectedly to 190k for the week ending January 14, reaching its lowest level since September and highlighting the strength of the labor market despite elevated interest rates. In Europe, annual wage growth increased to 6.4% from September to November, indicating a still tight jobs market. Read More
For style performance, Large, Mid, and Small refer to the Russell 1000, Russell Midcap, and Russell 2000 indices, respectively. Value refers to companies with lower price-to-book ratios and lower expected growth values, and Growth refers to higher price-to-book ratios and higher forecasted growth values. Government, Corporate, and High Yield refer to the US Treasury index, the US Corporate Credit index, and the US High Yield index, respectively. Short, Intermediate, and Long refer to the Short, Intermediate, and Long segments of their respective curves. Quality returns refers to the credit quality of asset classes ranging from Government, highest quality, to High Yield, lowest quality.
German Manufacturing PMI
(Cons: 47.8, Prior: 47.1)
German Ifo Business Climate Index
(Cons: 90.2, Prior: 88.6)
BOC Policy Rate
(Cons: 4.50%, Prior: 4.25%)
US GDP QoQ
(Cons: 2.6%, Prior: 3.2%)
US New Home Sales
(Cons: 614k, Prior: 640k)
US Initial Jobless Claims
(Cons: 205k, Prior: 190k)
US Core PCE MoM
(Cons: 0.3%, Prior: 0.2%)
Michigan Consumer Sentiment
(Cons: 64.6, Prior: 64.6)
US Pending Home Sales
(Cons: –1.0%,
Prior: –4.0%)
Source: Bloomberg and Goldman Sachs Asset Management. For style performance, Large, Mid, and Small for US Equity refer to the Russell 1000, Russell Midcap, and Russell 2000 indices, respectively. Value refers to companies with lower price-to-book ratios and lower expected growth values, and Growth refers to higher price-to-book ratios and higher forecasted growth values. For US Fixed Income, Government, Corporate, and High Yield refer to the Bloomberg Treasury, Bloomberg Corporate Credit, and Bloomberg High Yield indices, respectively. Short, Intermediate, and Long refer to the Short, Intermediate, and Long segments of their respective curves. For European Fixed Income, Government, Corporate, and High Yield refer to the Bloomberg Euro Treasury Index, the Bloomberg Euro Corporate Index, and the Bloomberg Euro High Yield Index, respectively. Quality returns refers to the credit quality of asset classes ranging from Government, highest quality, to High Yield, lowest quality. Since August 24, 2021, the Barclays indices are branded “Bloomberg indices”. Please see end disclosures for footnotes. Past performance does not guarantee future results, which may vary.
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