Bears dominate stocks at the end of the week
10 February 2023
Friday on American indices is starting near the weekly lows, which doesn’t really sound encouraging, does it? It may be the first step to a bigger correction in the next few days. Friday morning also shows the strength of the American Dollar and the weakness of gold, which may have further consequences down the road.
Asian indices are finishing this week with losses, apart from small exemptions, such as KLCI from Malaysia, currently the strongest local index. Why is that? Well, we just found out that the Malaysian economy grew by 8.7% in 2022 - the fastest pace in more than 20 years, making it the fastest-growing economy in Asia. Unquestionably a reason to celebrate!
Commodities are witnessing a significant drop in the price of precious metals today, with gold trading at the lowest levels since January 6. Technically, we also broke the long-term up trendline, which could accelerate the sell-off. Silver is doing even worse, as it is reaching new yearly lows with a strong probability to drop even more.
Friday’s calendar is pretty packed. We already saw the inflation numbers from China that came lower than expected (2.1% vs 2.2%). In addition, we got a fresh print of the GDP in the UK. Expectations were set on -0.3%, but the reality was worse at -0.5%. Apart from the GDP, we also got the industrial and manufacturing production numbers. Both were expected at -0.2%, but surprised positively with the industrial production rising by 0.3% and no change in manufacturing production (0.0%). The first reaction on the Pound was negative.
Later during the day, we will get job data from Canada and finish this Friday with the Prelim UoM Consumer Sentiment data from the US.