Declines in Asia; Hang Seng down 1%

Trade review: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations

08:58

This morning in Asia, the main indices are trading in a mixed trend. The Nikkei fell 0.3%, the Shanghai Stock Exchange shed 0.3%, the Hang Seng fell 1% and the Kospi rose 1.3%.

US futures trade slightly higher.

Last night on Wall Street, after three days of gains, trading closed with sharp declines. The Nasdaq fell by 1.9%, the Dow Jones by 0.4% and the S&P 500 by 1.1%. The declines were led by the large technology stocks, primarily Nvidia which lost 219 billion dollars of its value.

● “The Nvidia effect”: after the sharp increases, what is left for the stocks that jumped thanks to a single announcement

The declines intensified in the afternoon following strong macro data. The number of vacancies in the employment market rose to 8.1 million in December, above the expectation of 7.7 million and higher than the October figure of 7.8 million vacancies. At the same time, the purchasing managers’ index (PMI) of the services sector climbed in December to a level of 54.1 points, compared to a level of 52.1 points in November, also above expectations.

Tesla Down 4% after Bank of America downgraded Tesla stock from “buy” to “neutral” with a price target of $490, down from $400 previously. The bank noted that the execution risk remains high, and that the stock is now trading at a level that largely reflects the company’s long-term base scenario, which includes the potential from the core cars, Robotaxis, Optimus, and energy production and storage activities.

Also a share dark Locked in declines after MoffettNathanson analyst Craig Moffett described Apple stock as “definitely unattractive,” downgrading it from “hold” to “sell” while lowering his price target from $202 to $188.

According to Moffat, in August they determined that Apple’s future success in the field of artificial intelligence is already embodied in the stock price. He noted that the stock’s valuations were too high, and did not include risks such as a decline in Apple’s expectations in the Chinese market. In addition, the price reflected not only a one-time wave of upgrades by users to iPhone devices but a “permanent increase” in the rate of upgrades, which is not guaranteed.

Moffat adds that Apple is one of the most valuable Fantastic Seven stocks, even though its growth rate has been the slowest of the stocks. In his estimation, Apple’s stock price “might have made sense if iPhone 16 sales had exploded or if Apple Intelligence had heralded an opportunity in the services sector.”

In the debt market, American government bonds traded lower last night (Tuesday) during trading, and the yield on ten-year bonds rose by six basis points, to 4.75%, this figure is close to the 52-week high, recorded in April, and marks another milestone in the selling trend The bond that has been going on for several weeks.

This morning, government bond yields are down slightly.

Discount Bank economists noted in their review that “the American government bond market is expected to be volatile in the coming weeks, pending economic data to be published in the next two weeks and the implications for interest rate expectations. On the other hand, concerns about the Trump administration’s inflationary policy and, in particular, an increase in the government deficit, will prevent a significant decrease in yields. At the same time, the fear of a crisis forming around the urgent need to raise the debt ceiling will also support volatility. According to the US Treasury Secretary, the administration is expected to use the full debt ceiling between January 14 and 23.

The Swiss bank EFG warns that the European Central Bank (ECB) may “miss the curve” in the slow interest rate cuts, despite the increase in inflation to 2.4% in Europe.

According to Gianluigi Mandrozzato, the bank’s senior economist, despite the weakness in the economy, inflation in services and core inflation remain relatively high, which supports the position of the “hawks” on the board of the central bank to lower interest rates only in small steps. “The risk is that the ECB will be left behind, and in the end will be forced to lower the interest rate at a higher rate than the current market expectations,” Mandrozzato estimates.