FTSE 100 and US Stocks See Positive Growth Amid Optimism and Rate Hikes

Global Markets

The FTSE 100 started the week in a bright mood in tandem with optimism from China and the chance that the FED will lower rates in the coming months. As a result, the FTSE 100 index was up 22 0.3%, at 7,722.58.

These numbers mean that the overall value of the stocks in the index has increased by 0.3%. Meanwhile, the FTSE 250 (which consists of mid-sized companies) was up 89 points, at 19,594.01, and the AIM All-Share (which consists of smaller, emerging companies) was up 2 points, at 849.37.

The Cboe UK 100 index, which includes the top 100 publicly traded firms on the London Stock Exchange, saw a rise of 0.3% to reach 772.48. The Cboe UK 250 index, comprising 250 medium-sized firms listed on the LSE, increased 0.6% to 17,081.

However, the Cboe Small Companies index, including emerging small businesses listed on the LSE, experienced a 0.2% decline to 13,679.64. Quantum dots developer Nanoco was the weakest performer in the Cboe Small Companies index, relinquishing some of its earlier gains.

On Monday, European stocks saw a slight uptick, with the CAC 40 in Paris rising 0.1% and the DAX 40 in Frankfurt increasing 0.2%. Meanwhile, Asian markets led the charge, with the Shanghai Composite index climbing 0.6% and the Hang Seng in Hong Kong jumping 1.9% in late trading. The S&P/ASX 200 in Sydney also closed 0.6% higher. Tokyo’s financial markets were closed in observance of Coming of Age Day.

Analysts attribute the positive performance in Asian markets to the reopening of borders in China, which is expected to bring a surge of travelers into and within the country for the upcoming Lunar New Year celebrations. Despite the ongoing coronavirus pandemic, there is hope that the Chinese economy will eventually bounce back.

US stocks

US stocks ended the week on a high note, with the Dow Jones Industrial Average climbing 2.1%, the S&P 500 rising 2.3%, and the Nasdaq Composite jumping 2.6%. That brought the Dow and S&P up 1.5% overall and the Nasdaq up 1.0%.

A positive nonfarm payroll report from the US Department of Labor spurred the excellent performance. The data showed that total employment in non-agricultural industries increased by 223,000 last month, surpassing market predictions of 200,000 jobs.

However, wage growth was slightly disappointing, with hourly earnings growing 4.6% year-over-year, down from 4.8% in November and below the consensus estimate of 5%. As a result, investors are now turning their attention to the Federal Reserve’s first interest rate decision of 2023, set for February 1, with the market largely anticipating a quarter-point hike.

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