Markets are gearing up for a potentially tumultuous week as Donald Trump is inaugurated as the President of the United States. As the world watches closely, investors are on edge, anticipating possible policy surprises that could shake the financial landscape. The S&P 500, a key indicator of market sentiment, rose approximately 3% by the week's end, signaling a positive outlook. Meanwhile, the US dollar experienced turbulence, struggling throughout the week without a consistent downward trend.
One of the pivotal events on the horizon is the Bank of Japan's (BoJ) meeting scheduled for January 24th. Market analysts and investors are keenly observing this event, given the potential for an interest rate hike. Such a move by the BoJ could significantly impact global markets and investor strategies. With these developments unfolding, the S&P 500 is showing promising signs. If it manages to close above a critical resistance level, it could enter a bullish phase, attracting more investor interest.
Gold has also made headlines this week, reclaiming the $2700/oz level. The precious metal continues to draw demand amid global uncertainties, serving as a safe haven for investors seeking stability. Concurrently, oil prices have seen an upward trend, adding 1.87% this week, marking successive weeks of gains.
US equities enjoyed a positive trajectory this week, buoyed by robust corporate earnings from major banks in the country. These strong performances have propelled US indices higher, reflecting optimism among investors. The economy's growth further bolsters this sentiment, with a notable 5.4% increase in the fourth quarter compared to the previous year. This growth surpasses the 4.6% recorded in the third quarter and outstrips the 5.0% estimate.
The S&P 500 banking index (.SPXBK) and regional banks (.KRX) have outperformed the main indexes this week, with impressive gains of approximately 6.1% and 7.6%, respectively. This surge highlights the banking sector's resilience and strength amid broader economic challenges.
In the cryptocurrency arena, XRP continues its upward trajectory as markets anticipate a pro-crypto policy under President Trump's administration. Such expectations have fueled investor interest in digital assets, adding another layer of complexity to market dynamics.
Looking ahead, there are several key data releases that could influence market movements. The US is set to release S&P Manufacturing and Services PMI data on Friday, which will provide insights into economic health and business activity. In the Asia Pacific region, New Zealand's inflation figures are expected to be a high-impact data release, potentially providing impetus for the NZD moving forward.
The S&P 500 is currently trading above its previous swing high at 5980. A daily candle close above this level could lead to a change in market structure, signaling further bullish momentum. Immediate resistance is noted at 6025 before the all-time highs of 6094 come into focus.