Economics

Seemingly out of the blue, a major US financial merger deal emerges, untouched by crisis or regulatory bailout.

China’s balance of payments data for last year shows the stunning impact on its trade performance from the slowdown in demand for its exports, weak domestic demand for imports, and the loss of confidence foreign investors have in the country due to its increasingly aggressive policy positions on issues like security and spying.

Kiwi dairy group A2 Milk (ASX:A2M) announced on Monday that its first-half profit surged by a solid 15.6%, driven by increased demand in China, other Asian markets, and the US.

Ahead of the key quarterly report from Nvidia later this week, US markets turned cautious on Friday, ending a month of rises.

On the agenda this week: more earnings, especially from AI giant Nvidia, from around the world; wages data in Australia; continuing worries about inflation and central bank interest rate policies; and the final estimate for German 4th quarter and 2023 economic growth.

US markets might be closed today for the Presidents Day holiday, but after that, investors face a big test with the quarterly earnings from AI figurehead Nvidia and retail giant Walmart dominating the dying days of the December reporting season.

The second and biggest week of the Australian December half and full-year earnings reporting season will be dominated by major resource companies, both domestically and offshore.

Small weekly gains were seen in oil prices last week, despite challenges such as a firmer US dollar, higher US bond yields, and a significant increase in weekly US inventories (up 12 million barrels).

The day before the US January consumer inflation figures forced investors to face up to the reality of higher rates from the Fed for longer, the February survey of global fund managers from Bank of America painted an upbeat outlook from investors.

QBE Insurance Group (ASX:QBE) announced that its full-year net profit more than doubled, propelled by robust premium growth supported by renewal rate increases, new business expansion, and notably, a surge in investment income from its $US30 billion 'float.'

Shell, this week, trimmed its 2040 demand estimate— not by much, but lower than the 2021 forecast, suggesting the LNG boom might be over.

Albemarle, the world's largest lithium producer, showcased a mixed performance in the final quarter of 2023, revealing a $2.3 billion slide in earnings over the six-month period ending in December. This substantial loss marked a stark contrast to the profits seen in the same period of 2022, painting a somber picture for the company's financial health.

The lithium price rout and associated decline in equities could be an opportunity for the long-struggling junior gold space.

Investors, especially on Wall Street and later today in Australia, received the rude shock they deserved from the slight fall in US Consumer Price Inflation in January.

Fletcher Building (ASX:FBU), a prominent player in the construction industry, is poised to resume trading on the Australian Securities Exchange (ASX) at 10 am today, marking the end of a two-day halt initiated after a rapid 6% drop in shares within just 8 minutes.

Blood products behemoth CSL (ASX:CSL) has demonstrated resilience in the face of Monday’s setback concerning a potential blockbuster drug trial, showcasing an impressive 11% enhancement in underlying net earnings to $US2.017 billion ($A3.11 billion).

Glencore has announced intentions to sell its 49% stake in the Koniambo Nickel SAS (KNS) venture, a venture wrought with losses due to plummeting nickel prices exacerbated by the unchecked nickel production in Indonesia.

Alkane Resources (ASX:ALK) has made waves with its latest discovery of high-grade gold and copper deposits at the Northern Molong porphyry project in Central NSW.

In a dramatic turn of events, Fletcher Building (ASX:FBU), a prominent trans-Tasman building products giant, had its shares suspended abruptly yesterday.

As of Friday's market close, the momentum of the US December quarter earnings rebound persists, with over two-thirds of S&P 500 companies having already reported, exceeding initial expectations. The earnings landscape has proven to be more resilient than anticipated, showcasing a positive trend for investors.

In a remarkable feat of resilience, the S&P 500 closed above the key 5,000 level, defying expectations amidst a backdrop of rising interest rates and global geopolitical tensions. Strong earnings reports and positive economic indicators propelled the index to new heights, showcasing a 25% gain in the three years since it surpassed the 4,000-point milestone.

The Australian December half-year reporting season has begun with a flurry of activity, showcasing a mix of positive surprises and anticipated challenges for investors. Nearly 50 ASX 200 companies are set to report, with major players such as the Commonwealth Bank and JB Hi-Fi leading the charge.

Last week witnessed a notable surge in the prices of oil, iron ore, and coal, driven by various global factors. However, gold and copper faced significant setbacks, particularly due to the lack of positive news emanating from China, a key player in the global commodities market.

As the world prepares for a dynamic week of economic indicators and cultural events, eyes are particularly focused on the United States where inflation data is set to be unveiled. The January Consumer Price Index (CPI), both headline and core, along with the Producer Price Index (PPI), are anticipated to dominate discussions, offering insights into the trajectory of the world's largest economy.

In a historic turn of events, Microsoft has officially dethroned Apple to claim the title of the most valuable company ever. Founded decades ago by Bill Gates and others, and listed in 1986, Microsoft's journey reached a pinnacle last week with a staggering market capitalization of $US3.125 trillion, marking the highest value ever recorded for any company.

Wall Street is record-setting, especially among tech and near-tech stocks. Industrials and financials are sagging, and the Magnificent Seven has become six, with Tesla falling behind Apple (a bit weak as well), Nvidia, Alphabet, Amazon, Meta, and Microsoft (more a 'Stellar Six' now than magnificent).