By Vivek Kumar
Moving Markets Today: Asian Stocks Dip After Wall Street Sell-Off, U.S. Dollar Near Three-Month Highs; Oil Prices Decline, Lyft Shares Ease After 60% Surge; Focus on UK CPI and Q4 Euro Area GDP
The major indices on Wall Street experienced significant declines due to a consumer inflation reading that exceeded expectations, leading to a shift in market sentiment regarding potential interest rate cuts and causing U.S. Treasury yields to rise. Asian markets followed suit, influenced by the negative performance in the U.S. The U.S. dollar remained strong against other major currencies, reaching near three-month highs. Oil prices decreased amid concerns about persistent inflation and a larger-than-expected increase in U.S. crude inventories. Bitcoin retreated from the $50,000 mark. Despite a forecasting error, Lyft‘s stock surged by 17% as the company implemented cost-cutting measures. Investors are eagerly awaiting the release of UK January inflation data and the euro area’s fourth-quarter GDP figures scheduled for Wednesday. Here are five key takeaways for your day.
Lyft Stock Surges Over 15% on Cost Reductions Despite Forecast Error Drama
Lyft exceeded expectations for quarterly profit and announced its forecast to achieve positive free cash flow for the first time in 2024. This was attributed to the company’s efforts in reducing costs and improving competitiveness against its main rival, Uber. Despite the positive news, there was a significant error in Lyft’s statement: it incorrectly indicated that a key margin metric was expected to increase by 500 basis points this year. This led to a 15% increase in shares during late after-hours trading. However, during a conference call later, Chief Financial Officer Erin Brewer corrected the forecast, stating that the increase would be 50 basis points instead. As a result, the stock, which initially surged by 67% based on the statement, lost most of its gains following the correction.
New Zealand Housing Market Sees Modest Rise in Prices: REINZ
New Zealand house prices edged slightly higher in January compared to December, the data from Real Estate Institute of New Zealand (REINZ) showed, Reuters reported. Despite this uptick, challenges persist in the housing market. According to data from REINZ, although seasonally adjusted median house prices rose by 0.8% from December, they showed a decline of 0.7% compared to the same period a year earlier. Additionally, seasonally adjusted national home sales volumes dipped by 9.3% from December and were down by 1.2% from January 2023.
Oil Prices Slide on Larger-than-Expected US Crude Stockpile
During early Asian trading, oil prices slipped as U.S. industry data showed a larger-than-expected increase in crude stocks last week. Investor hopes for U.S. Federal Reserve interest rate cuts also waned. Brent futures fell by 12 cents to $82.65, while U.S. West Texas Intermediate (WTI) crude futures dropped 22 cents to $77.65 per barrel. American Petroleum Institute figures released late Tuesday revealed an 8.52-million-barrel rise in U.S. crude inventories for the week ended Feb. 9.
What’s Coming Up
At 0730 GMT on Wednesday, the UK is set to unveil its latest inflation data. The Office for National Statistics will present reports detailing consumer and producer prices for January. Projections suggest that the annual growth rate of core consumer prices may rise by 0.1 percentage point compared to the previous month, reaching 5.2%. Notably, there are no major economic releases scheduled in the United States for the day. However, Thursday’s focus will shift to key indicators such as the UK’s fourth-quarter GDP figures and U.S. retail sales data for January.
Asia Stocks Inch Lower; U.S. Dollar Strengthens
The S&P 500 dropped by 1.37% to close at 4,953.70 points, while the Nasdaq Composite fell by 1.79% to 15,659.91, and the Dow Jones Industrial Average saw a 1.36% decrease, ending at 38,275.33. This marked the Dow’s most significant one-day percentage loss since March 22, 2023. Noteworthy market movements included JetBlue Airways rising by 21.6% after activist investor Carl Icahn disclosed a 9.91% stake, expressing that the carrier’s stock was undervalued. Tripadvisor stock also surged by 13.8% following the establishment of a special committee to review potential deal proposals within the online travel agency sector. In Asian markets, trading dipped after a decline on Wall Street. Japan’s Topix declined by 1.3%, South Korea’s Kospi by 1.5%, and Hong Kong’s Hang Seng index by 1.3% during early trading. Chinese markets were closed for the Lunar New Year. Despite recent gains, Japan’s Nikkei 225 fell by 0.7% after surpassing the 38,000 level in the prior session. Hong Kong’s Hang Seng Index also experienced a decline of 0.8% on its first trading day following the Lunar New Year holidays, while mainland China’s financial markets remained closed for the week. The 10-year Treasury yield increased to an over two-month high of 4.3320% on Wednesday, while the two-year Treasury yield stood at 4.6324%. These movements contributed to the strengthening of the US dollar, nearing a three-month peak against a basket of currencies, reaching 104.81 on the dollar index, its highest level since November. Bitcoin retreated from the $50,000 level to $49,496 in the cryptocurrency market. Gold remained relatively stable at $1,992.37 per ounce.
