The selling pressure has eased but markets stay vulnerable to further losses
Wall Street stocks finished lower after a volatile session overnight as the indexes failed to preserve early gains, with a cautious tone persisting after the Fed’s hawkish decision. On the data front, the fourth-quarter gross domestic product jumped 6.9% versus 5.5% expected. Meanwhile, Tesla stocks fell 11.5% despite the company posting upbeat quarterly results. The Dow Jones Industrial Average closed nearly unchanged, the S&P 500 shed 0.5%, and the Nasdaq Composite fell 1.4%.
Asian equity markets were mixed on Friday. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.4% but still down more than 5% so far this month. The Shanghai Composite and Hong Kong’s Hang Seng fell 1% each. On the positive side, Japan’s Nikkei 225 rallied over 2% after Bank of Japan Haruhiko Kuroda they don’t expect the Fed policy to have a negative impact on Japan’s economy.
In Europe, stocks opened mostly lower at the end of a volatile week following the Federal Reserve’s monetary policy meeting. The pan-European Stoxx 600 slipped nearly 1% in early trade. In individual stocks, H&M shares jumped more than 4% after the fashion retailer posted nearly a sevenfold increase on the previous year’s earnings of 163.1 million pounds. The company also set out ambitious plans to double group sales by 2030.
In currencies, the USD index advanced to fresh mid-2020 highs in the 97.40 area on Friday, thus pushing its counterparts further into the negative territory during the European hours. The persisting safe-haven demand coupled with the Fed’s hawkishness keep the greenback elevated these days. Against this backdrop, EURUSD extended losses to the 1.1120 area, threatening the 1.1100 figure that could be derailed later today should risk aversion reemerge during the North-American session.
