US stocks build on their year-to-date rally, extending their winning streaks into Feb
Market Summary
Last week, investors focused on the continued winning streaks of major indexes in the United States. Chinese equities fell as investors pocketed gains from a recent rally and turned cautious about the strength of the country’s recovery.
In the United States, stocks build on their year-to-date rally. There was a 23% jump in Facebook’s parent company, Meta Platforms, which provided a major boost to the technology-heavy Nasdaq Composite Index. The unemployment rate slipped to 3.4%, its lowest level since 1969. In Europe, shares in Europe rose on hopes that central banks may be nearing the end of the restrictive monetary tightening cycle. The ECB raised its key interest rates by half a percentage point, taking the deposit rate to 2.5%
In Asia, Japan’s stock markets rose over the week. The Bank of Japan (BoJ) reiterated its commitment to ultra-loose monetary policy. The Fed’s moderation of its rate hikes and some anticipation of potential change in the BoJ’s easing stance supported the yen, which strengthened to around JPY 128.58 against the U.S. dollar, from the prior week’s JPY 129.89. In China, stocks fell. The Shanghai Composite Index eased 0.04% and the blue-chip CSI 300 Index slipped 0.95%. In Hong Kong, the benchmark Hang Seng Index retreated 4.5%, its biggest weekly decline since the end of October, according to Reuters.
Major News
Google has invested about $300mn in artificial intelligence start-up Anthropic, making it the latest tech giant trying to gain a foothold in the field of “generative AI”.
An unexpected surge in US jobs growth has eliminated concerns of a US economic slowdown in the near term but could force the Federal Reserve to extend its campaign to cool the economy.
EU member states have agreed on the level of price caps to be imposed on shipments of Russian refined oil products, which will come into effect on Sunday to cut Moscow’s export revenues.
US secretary of state Antony Blinken has cancelled his weekend visit to China after the Pentagon said it discovered a Chinese spy balloon that has been flying over sensitive nuclear missile sites in the western state of Montana.
What caught our attention
The race of the AI labs heat up. In five days after its unveiling, the artificially intelligent chatbot ChatGPT, created by a startup named OpenAI, drew 1m users, making it one of the fastest consumer-product launches in history.
The capital flowing into generative-AI startups, which last year collectively raised $2.7bn in 110 deals, suggests that venture capitalists are betting that not all the value will be captured by big tech. Alphabet, Microsoft, their fellow technology titans and China will all try to prove these investors wrong.
The result of that race will determine how quickly the age of AI will dawn for computer users everywhere—and who will dominate it.
Source: Kredens Capital, T. Rowe Price, Bloomberg, Financial Times, Wall Street Journal, The Economist, Nikkei Asia
