Weekly Market Update (Feb 01, 2026)
- Market Hedwig
- 3 days ago
- 2 min read
HIGHLIGHTS
Fed’s rate kept unchanged. There are mixed communications from US administration, such as Fed chair nomination. In addition, ECB, BoE and Japan’s election will remain in focus.
Earnings: Near 60% of S&P500 companies have beaten EPS expectation by more than one standard deviation so far. AI adoption remains the main them in earning calls, while only a few companies can quantify their productivity gains from AI use.
USD: There are swings in USD recently, reflecting hedging over geopolitical concerns and speculation over Japanese yen related intervention.
Fed: Markets do not expect the new Fed Chair to change monetary policy meaningfully this year. It is because of the resilient economy, increasing inflation and the dividing FOMC limiting scope for easing.
MARKETS
23,461.82 | -0.71% | |
S&P 500 | 6,939.03 | +0.34% |
Dow | 48,892.47 | -0.42% |
10-Year | 4.24% | +0bps |
Brent | 69.32 | +6.53% |
DXY | 97.15 | -0.32% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Morgan Stanley: US equities have experienced a strong rotation toward small-caps this year. While the success of these companies will depend on realization of ambitious earnings expectations, it is likely that the low-quality stocks rally reflecting speculative excess and could be an opportunity to take profit.
Standard Chartered: US tech earnings remain strong, especially for semiconductor and internet sectors. It is largely attributed to increasing memory prices and high demand for capital equipment. Software and IT services remain laggards as they usually benefit later in the business cycle.
Fixed Income
UBS: Fed decided to keep rate unchanged this week, but the meeting tone is slightly more hawkish. The urgency for a cut is reduced because of the resilient economic growth, while it is still likely at some point this year.
Morgan Stanley: It is more likely that the positive correlations between stocks and bonds in the intermediate terms reduce the options for easy diversification of portfolio. Active management is needed when the term premiums continue to rise.
Economy
Barclays: Japan’s ruling parties appear headed for an election victory. The VAT cut proposal looks less certain after increasing yields. Japanese yen is still key to early BoJ hike prospects.
UBS: USD dropped rapidly this year. Usually weak currency is associated with high inflation. This one is different, and the dollar decline is less relevant to US affordability, but more with tariffs.
KNOWLEDGE TRANSFER
GLP-1
Here's all you need to know about the Game-Changing Obesity Drugs.
DISCLOSURE
This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.
Comments