By Geoffrey Smith
Investing.com — Dollar softens and bonds rise as markets bet on a Federal Reserve rollback later this year. JPMorgan, Citigroup and Bank of America kick off fourth-quarter earnings season. Tesla cuts its price again and SEC accuses Gemini and Genesis of illegal securities offering. And oil hit a 10-day high on an improving outlook for the global economy. Here’s what you need to know in the financial markets this Friday, January 13.
1. Dollar falls on hopes of a Fed pivot
The dollar fell to a seven-month low as bond yields stabilized after falling sharply on Thursday as a further decline in headline inflation in the United States bolstered hopes for an end to rapid interest rate hikes by the Reserve Federal, or even a first decrease in the second half of the year.
By 1:45 p.m., the index was down just under 0.1% at 102.20, its biggest losses against the rebound, reflecting the fact that the Bank of Japan has only recently begun to consider tightening its policy monetary.
The decline in the consumer price index was less impressive than it first appeared, almost entirely due to a 9% drop in the price of gasoline, which can easily be reversed. However, analysts were almost unanimous in seeing these figures as proof that inflation has peaked. This should be reflected in the “inflation expectations” component of the survey due at 4 p.m.
2. Bank results kick off earnings season
The improvement in bond market sentiment likely came too late for Wall Street’s best to save anything from the 2022 wreckage, but the sharp year-over-year turnaround could lend it more weight. opinion. given by JPMorgan (NYSE: ) chief Jamie Dimon and his peers when they release their results before the bell.
JPMorgan, Citigroup (NYSE: ), Wells Fargo (NYSE: ) and Bank of America (NYSE: ) are all releasing their results early, with a high degree of uncertainty about how they handled volatile markets in the final quarter of last year. It will also be interesting to know to what extent they will increase their loan loss provisions in the context of an economic slowdown.
Those looking for positive results can turn to Blackrock (NYSE: ), which has already posted better-than-expected results despite the layoffs announced earlier this week.
3. Stocks are poised for a weekly profit; Tesla hurts sentiment with further price cuts
US stock markets will open slightly lower later, after rising on Thursday in response to inflation numbers, which were followed by fresh suggestions from Federal Reserve officials that the central bank may hike alone. February meeting.
By 13:45, they fell by 42 points or 0.1%, while 0.2% and 0.4%. Major currency indices had gained as much as 0.6% on Thursday and are expected to end the week with gains of 2% to 3.8%.
A fly in the ointment could be Tesla (NASDAQ: ) and the rest of the auto industry, as the EV maker cut prices in the US and Europe. The move will allow its Model 3 sedans and Model Y crossovers to qualify for U.S. federal tax credits and help it clear inventory after missing delivery targets at the end of last year, but at the end of passed. detrimental to profit margins. Tesla shares fell 5.2% in premarket and the news also dragged down European rivals Mercedes (ETR: ), Volkswagen (ETR: ) and Stellantis (EPA: ) (NYSE: ).
4. The SEC accuses the Twins and Genesis
The Securities and Exchange Commission has charged Genesis and Gemini with illegally offering securities to US customers, in another blow to the cryptocurrency industry, still reeling from the collapse of FTX.
The SEC’s decision was expected, but it further complicates efforts to merge accounts at Genesis, which suspended customer withdrawals after losing money in the collapse of FTX and Terra/Luna earlier. in 2022.
Tyler Winklevoss, co-owner of Gemini, called the decision a “super sucker.” Along with his twin brother Cameron, he has one of the largest cryptocurrency holdings left. These properties may need to be liquidated at least in part if the SEC receives a severe settlement from Gemini.
Additionally, Bulgaria-based cryptocurrency platform Nexo has also struggled, being raided by local authorities who suspect it of aiding in money laundering.
5. Oil hits 10-day high against weaker dollar
Crude oil prices hit a 10-day high as the dollar weakened on hopes of an easing of US monetary policy that will allow other central banks around the world to further support their economies.
The effect of US inflation numbers outweighed that of weak December data, which showed both imports and exports continued to fall year-on-year.
As of 1:50 p.m., futures were up 0.7% at $78.97 and up 0.7% at $84.60. The Baker Hughes device report and CFTC positioning data will close a week later.