After the year-end selloff, stock markets finished the first week of 2023 in positive territory. December’s jobs report showed a slightly cooling labor market in the U.S., with weaker growth in employee wages. This data suggests inflation is moving step by step towards the Fed’s target.
The Dow and S&P 500 each closed the week up 1.45% while the Nasdaq advanced 0.98%. The main European indexes fared even better as German inflation eased more than expected in December, for a second straight month, raising hopes that the ECB could slow its aggressive interest rate hikes. The MSCI EMU jumped 5.81% while the FTSE gained 3.32%.
In Asia, Chinese stocks notched a five-day winning streak on economic recovery hopes, despite COVID woes. The Shanghai Composite gained 2.21% week-over-week. By contrast, Japan’s Nikkei edged down 0.46%.
Most sectors in rally mode
One of the worst performing sectors of the S&P 500 in 2022, communication services, led the pack this week (+3.70%), helped by Meta Platforms (META). The social media giant's shares bounced back (+8.04%) due to the misfortune of its big rival across the Pacific Ocean, ByteDance. The Chinese company that operates the mega-popular TikTok short video sharing app has laid off about one-tenth of its employees.
Materials (+3.45%), financials (+3.33%), industrials (+2.72%) and real estate stocks (+2.40%) shined too.
On the flip side, health care posted the poorest performance (-0.19%). Energy was flat though WTI oil prices fell 8.09% on demand concerns. Tech stocks edged up 0.22%, weighed down by Microsoft stocks (MSFT, -6.21%) and Apple shares (APPL) to a lesser extent (-0.24%).
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