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The stock market shows an upward trend, with the SMI nearing 12,000 points, driven by gains in Lonza and Holcim, while Kühne+Nagel faces pressure. In Japan, the Nikkei index dropped 0.8% to 38,248.54 points, marking its worst week in three months, as the yen rose to a monthly high of 154.98 per dollar amid expectations of a potential interest rate hike by the Bank of Japan.
The Dow Jones surged 700 points following a softer US inflation reading, recovering to 43,300, with a target of 45,000 in sight. The S&P 500 is approaching key resistance levels near 6000, while the Nikkei 225 remains stagnant below 39,000, despite strong buying support around 38,000.
UBS forecasts that the S&P 500 will reach 6,600 this year, driven by an easing inflation environment. This optimistic outlook reflects confidence in market recovery and economic stability as inflationary pressures subside.
DAX reached a record high following US inflation data, with core inflation dropping to 3.2%, sparking renewed speculation about interest rate cuts. Attention now shifts to upcoming Chinese economic data and quarterly results from major US banks, while Trump's inauguration looms, raising concerns over potential trade tensions.
The Federal Reserve is not expected to cut interest rates before June, following a softer-than-anticipated core inflation reading. Analysts at UBS noted that while consumer prices rose by 0.4% last month, the core measure increased by only 0.2%, suggesting overall economic activity remains strong. They predict the Fed will implement further rate cuts in 2025, but not before mid-year.
The Bank of Japan is poised for a potential 25 basis point rate hike at its January 2025 meeting, driven by rising inflation and wage growth. Tokyo's consumer price index reached 3%, the highest since October 2023, prompting expectations for an upward revision in inflation forecasts. However, market volatility and US economic policy clarity remain critical factors influencing the BoJ's decision.
US consumer price inflation data showed benign trends, with durable goods prices declining, enhancing consumer spending power. Retail sales data is anticipated, reflecting stronger-than-expected spending as rising real incomes encourage consumers to spend. Meanwhile, UK GDP remains volatile, and German inflation data was unremarkable. Confirmation hearings for US Treasury Secretary-nominee Bessent may influence trade tax policy perceptions.
Softer inflation readings in the US and UK suggest potential shifts in monetary policy, with markets pricing in earlier rate cuts. This could benefit rate-sensitive sectors like technology and real estate, while the US dollar and British pound may face pressure as expectations build. However, risks remain, including the possibility of central banks maintaining hawkish stances longer than anticipated.
The Swiss stock market experienced a significant rise, with the SMI up 1.02% at 11,901.58 points, driven by strong performances from Richemont (+15.4%) and Swatch Group (+7.1%) following positive sales reports. In contrast, Geberit saw a decline of 2.1% due to stagnant sales amid a downturn in the construction industry. Positive US inflation data and a ceasefire agreement in Gaza further bolstered market confidence.
The SMI is expected to rise slightly, influenced by a weaker euro against the franc and strong demand for Wells Fargo, Citigroup, and Goldman Sachs. Wall Street has also seen gains, while the core inflation rate in the US unexpectedly dipped, easing fears of potential interest rate hikes by the Fed in 2025.
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