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Moving markets: Five things shaping the FTSE 100 today

Moving Markets Today: Asian Markets Rise with Wall Street, Uber, Lyft, and Nvidia Propel S&P 500; Bitcoin Tops $52,079, Japan Enters Recession; Eyes on UK Q4 GDP and U.S. Retail Sales

US stocks managed to recover from previous losses, which were triggered by unexpectedly high inflation data. Both Lyft and Uber, prominent ride-hailing companies, saw significant increases in their stock prices. Nvidia, a leading technology company, surpassed Alphabet to become the third most valuable company in the U.S. market. Asian markets followed the upward trend set by Wall Street, with Japan’s Nikkei index reaching a 34-year high. Bitcoin also continued its upward trajectory, surpassing $52,079, its highest point in 25 months. Meanwhile, Japan unexpectedly slipped into a recession, drawing attention to economic challenges. Investors are now eagerly awaiting upcoming data releases, including the UK’s Q4 GDP and U.S. retail sales numbers. Here are five key takeaways for your day.

Uber, Lyft, and Nvidia Drive S&P 500; Nvidia Overtakes Alphabet as Third Most Valuable Company

Nvidia achieved a significant milestone by surpassing Google-parent Alphabet to become the third most valuable U.S. company, Reuters reported. This shift came after Nvidia had recently overtaken Amazon in market value. Investors were particularly interested in Nvidia’s upcoming quarterly report, which contributed to the rise in its stock by 2.46%, bringing its total market worth to $1.825 trillion. Meanwhile, Alphabet experienced a more modest increase of 0.55%, reaching a value of $1.821 trillion.

Uber Technologies also made headlines by reaching a record high on Wednesday. The company announced its first-ever buyback of $7 billion worth of its shares, buoyed by a strong rebound in ride-share revenue and robust demand in its food delivery segment. Lyft, too, saw a remarkable 35% surge after surpassing profit estimates and forecasting positive free cash flow for 2024. The positive performance of Meta Platforms and Tesla further lifted the S&P 500, with both companies experiencing gains of over 2%.

Japan’s Economy Shrinks for Consecutive Second Quarter

Japan faced an unexpected downturn at the close of last year, slipping into a recession and relinquishing its status as the world’s third-largest economy to Germany, Reuters reported. This turn of events has raised questions about when the Bank of Japan (BOJ) might start to move away from its long-standing ultra-loose monetary policy, which has been in place for over a decade. Government data released on Thursday revealed that Japan’s gross domestic product (GDP) contracted by 0.4% on an annualized basis in the October-December period, following a 3.3% decline in the previous quarter. These results went against market expectations, which had anticipated a 1.4% increase.

Australian Unemployment Reaches Two-Year Peak

Australia experienced an unexpected setback in employment in January, resulting in the jobless rate hitting a two-year peak. According to data released by the Australian Bureau of Statistics, there was a minimal increase of just 500 jobs from December, which had previously seen a substantial decline of 62,800 positions. The unemployment rate rose to 4.1%, exceeding the anticipated 4.0% and marking its highest point since January 2022. Despite this, the participation rate held steady at 66.8%. A concerning aspect was the significant 2.5% decrease in hours worked during the period.

What’s Coming Up

The UK is gearing up for a significant announcement on Thursday, with the Office of National Statistics (ONS) preparing to unveil the latest GDP figures. Economists are anticipating these numbers to reveal a stalled economy in the fourth quarter, narrowly escaping a recession. Specifically, they foresee the headline GDP data showing a 0.1% year-on-year growth and a 0.1% month-on-month contraction. Alongside the GDP report, the ONS will also release updated manufacturing and industrial production figures.

Meanwhile, attention will also be on the United States, where economists are expecting a 0.1% drop in retail sales for January. Additionally, key indicators such as the US Philly Fed manufacturing index, industrial production data, and weekly initial jobless claims are scheduled for release on Thursday. Traders will also be closely monitoring speeches from FOMC members Bostic and Waller for further insights into the economic outlook.

Asia Markets Mirror Wall Street’s Surge; Nikkei Hits 34-Year High

The stock market had a positive day overall. The S&P 500, which represents a broad range of large-cap stocks, increased by nearly 1% to finish at 5,000.62 points. The Dow Jones Industrial Average, another major index, also went up by 0.40% to reach 38,424.27 points. The Nasdaq Composite, which focuses on technology stocks, saw a significant gain of 1.3%, with most of its major components rising except for Apple.

Asian markets followed suit, with Japan’s Topix index edging up by 0.1%, driven by a remarkable surge in the technology conglomerate Rakuten Group’s shares after it reported better-than-expected quarterly results. South Korea’s Kospi index remained stable, while internet company Kakao experienced a notable increase in its stock price following strong fourth-quarter earnings. However, Hong Kong’s Hang Seng index declined by 0.7% in early trading, and mainland China markets were closed for the Lunar New Year holiday. Indonesia’s Jakarta Composite Index rose by 1.6% after former general Prabowo Subianto won the country’s presidential election.

In the bond market, the yield on 10-year Treasury notes decreased slightly during Asian trading hours, while the dollar index remained steady near its recent highs. Bitcoin’s value surged to its highest level since December 2021, surpassing $52,000, as the total investment in the cryptocurrency exceeded $1 trillion. On the commodities front, U.S. crude oil prices dipped by 0.47%, while Brent crude saw a slight decline to $81.26 per barrel.

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