General Market Analysis 19/01/2024 – IC Markets

US Stocks Surge on AI Optimism – Nasdaq Jumps 1.35%

The major US stock market indices surged higher yesterday, led by the market darling sector of 2023, AI, major players Nvidia and AMD rose 1.9% and 1.6% respectively driving the tech sectors higher. The S&P rose 0.88% putting it once again in touching distance of record highs, the Dow gained 0.54% on the day and the Nasdaq jumped 1.35%. US treasury yields edged higher again as weekly employment data came in stronger than expected, the 10-year gaining another 4 basis points to trade up to 4.144% by the close. The dollar climbed for the fifth straight trading session although at a much more sedate pace than the previous day, the index up 0.14%. Oil and Gold jumped again on geo-political fears, WTI gaining 2% and Brent notching a 1.6% rise and Gold recovered some of its recent lost ground to move back above the $2,020/oz level.

AI Stocks Back in Focus for Investors

US stock markets jumped yesterday as AI stocks came strongly back into focus for investors. Forecasts of more than 20% growth from TSM, the world’s largest contract semiconductor marker sparked the market into action and other giants benefited, including Nvidia the world’s most valuable chipmaker which hit a fresh record high before settling up 1% by the close. The semiconductor index gained 65% in 2023 and looks set to continue to grow in 2024 if recent forecasts are anything to go by. Whilst investor confidence in other sectors has started to recede, especially in light of the potential for less rate cuts than previously expected by the market from the Fed in 2024, market analysts feel that, as the AI sector is still relatively new, there is still plenty of upside in the months and years ahead for the leading companies.

Markets Kick Off on the Front Foot Today

Asian markets are set to start the day on the front foot today after strong moves higher in US stocks overnight. It is however a quiet day in terms of scheduled data releases in the opening session and investors will be hoping that this will allow the positive momentum to continue throughout the day. It has been a big week for UK data and today is no different as London will once again comes into focus on the European open with the release of Retail Sales numbers. The New York open will see the initial focus north of the border for the Canadian Retail Sales data release before US markets grab more attention with the release of the latest Prelim University of Michigan Consumer Sentiment number. We will have a final update in the week from the Fed, late in the day as FOMC member Mary Daly speaks in San Diego.

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