8 January 2023

Optimism for financial markets in the first week of 2023

As the first week of 2023 draws to a close, financial markets are being carried away by a wave of optimism. Labour market data in the US and further reopenings in China are giving US indices their best daily performance in a month, while Asian equity markets are approaching the +20% mark since last October, i.e. they are one step away from entering a bull phase. At the same time, bond prices continued to recover, while the dollar continued to weaken. Good cues for gold. Let’s look at some data from our weekly analysis.

Over the past week, 90% of the instruments and indices used for our analyses recorded a positive change. 9% experienced a negative change. These percentages show that the US labour market data have brought a breath of optimism to the financial markets in this early part of 2023. Analysing by macroclass, 96% of equity instruments and indices recorded a positive weekly change. 100% of bond instruments and 56% of the other asset classes used for our analysis.

Improving valuations in the past week accounted for 28% of the total. The previous week, valuations that had been adjusted upwards were 28% of the total.

Among the equity analyses, improving valuations accounted for 25% of the total.

Among the analyses for bonds, 43.75% of the total were upgraded valuations.

In the analysis of other asset classes, the improving valuations accounted for 35% of the total. Analyses related to sentiment, currencies and commodities all fell into this category.

Of the valuations, 28.68% were above the short-term average. 48.06% were above the long-term average of valuations. Last week it was 27% and 33% respectively.