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At the close of the stock market yesterday, the Dow Jones Index (US30) increased by 0.03%, and the S&P 500 Index (US500) was down by 0.02%. Technology Index Nasdaq (US100) lost 0.18% yesterday.

The US reporting season continues to gain momentum. Tesla (TSLA) had a great fourth quarter thanks to a 37% increase in revenue. Tesla stated that under any scenario, they are prepared for short-term uncertainty but are focused on the long-term potential of autonomy, electrification, and energy solutions. IBM Corporation (IBM) on Wednesday reported its highest annual revenue growth in a decade and beat Wall Street expectations for the fourth quarter. The company also projected year-over-year revenue growth. But despite the good report, the company's stock fell on the release of the report. Economists attribute this to the fact that they are not confident that the company can deliver such results, given the weak macroeconomic backdrop. Shares of Alphabet (GOOGL) increased losses from the previous day, falling more than -2% after the tech giant cut another 1,800 jobs on Wednesday.

As expected, the Bank of Canada raised its overnight rate by 25 basis points to 4.5%. An accompanying statement said that if economic developments are broadly in line with MPR's forecast, the Board of Governors expects to keep the discount rate at its current level. The Bank of Canada may be the first bank among major economies to end its tightening cycle.

Equity markets in Europe were mostly down yesterday. German DAX (DE30) decreased by 0.08% yesterday, French CAC 40 (FR40) gained 0.09%, Spanish IBEX 35 (ES35) lost 0.16%, and British FTSE 100 (UK100) was 0.16% lower.

The German government said on Wednesday that it expects economic growth this year, not a recession, as Europe's largest economy has successfully weathered the energy crisis and supported consumers and businesses hurt by higher energy prices. The outlook for 2023 improved to 0.2% growth from a 0.4% contraction expected in October, when Germany feared it would run out of natural gas used to power factories, generate electricity, and heat homes this winter.

Recession risks in the UK are rising because of record shortages and falling production. Factories are cutting production at a record pace, business activity is falling, and the labor market is also starting to signal trouble. Traders are betting that the Bank of England will reverse course and cut its key interest rate later this year to support the weakening economy. But before the rate cut, the central bank is expected to make two more rate hikes of 0.25-0.5%.

Yesterday, Germany approved the supply of Leopard tanks to Ukraine. At the same time, the US also indicated that it would transfer 31 Abrams tanks. Following this news, the Russian embassy issued a tweet indicating that Germany's decision to approve the delivery of Leopard tanks to Ukraine is extremely dangerous and takes the conflict to a new level. The conflict is expected to escalate in the coming weeks.

Volatility in the oil market has declined because of the holiday week in China. But optimism about the surge in demand from China remains, so with the current level of production by OPEC countries, analysts see further growth in oil quotes. The only constraint to growth is the increase in strategic crude stocks for the 4th week in a row.

Asian markets also traded flat yesterday. Japan's Nikkei 225 (JP225) gained 0.35%, and China's FTSE China A50 (CHA50) did not trade and will not trade until the end of the week due to holidays. Hong Kong's Hang Seng (HK50) also did not trade, India's NIFTY 50 (IND50) decreased by 1.25%, and Australia's S&P/ASX 200 (AU200) ended the day down by 0.30%.

• S&P 500 (F) (US500) 4,016.22 −0.73 (−0.018%)
• Dow Jones (US30) 33,743.84 +9.88 (+0.029%)
• DAX (DE40) 15,081.64 −11.47 (−0.076%)
• FTSE 100 (UK100) 7,744.87 −12.49  (−0.16%)
• USD Index 101.64 −0.28 (−0.27%)
   

Important events for today:

• US Core Durable Goods Orders (m/m) at 15:30 (GMT+2);
• US GDP (q/q) at 15:30 (GMT+2);
• US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• US New Home Sales (m/m) at 17:00 (GMT+2);
• US Natural Gas Storage (w/w) at 17:30 (GMT+2).

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