Market Update – 19th January 2022.

US markets were closed on Monday for Martin Luther King Jr day.

China’s GDP was released on Monday, and showed its slowest growth in 18 months at 4%.

Whilst China’s GDP growth momentum slowed in the last quarter, a 4% figure is robust, especially considering major lockdowns and closures towards the end of the year.

Following this, China’s central bank (the People’s Bank of China) cut interest rates on Monday. This easing measure was put in place to counter the impact of an economic shutdown.

This is the first time through the pandemic that China has made meaningful use of monetary stimulus, at a time when other countries are withdrawing theirs. In addition to this, China holds the world’s largest foreign exchange reserves, all signs of a strong, healthy economy, and catalysts for future growth. Valuations in China remain attractive for long-term investment.

On Tuesday, the monthly report of the Organisation of the Petroleum Exporting Countries (widely known as OPEC), delivered an upbeat outlook. The organisation ensures the stabilisation of oil markets, to secure efficient and regular supply of petroleum to consumers.

We saw the price of a barrel of Brent crude oil hit its highest in seven years at over $87 a barrel.

Despite the prevalence of the Omicron variant of the Coronavirus, and expected interest rate hikes, OPEC stuck to its forecast of robust growth into 2022. In the report, OPEC said “While the new Omicron variant may have an impact in the first half of 2022, […] projections for economic growth remain robust”.

In the UK, we are seeing the jobs market heating up and continuing to recover from the Coronavirus blow. The office for national statistics (ONS) estimates that in December 2021, there were 29.5 million employees in the UK. The figure is both up on the month before, and higher than the pre-Coronavirus level (Feb 2020).

In the wake of the pseudoscientific Blue Monday, this week’s UK employment data brings good news for job seekers. With a record number of job vacancies in the UK, at 1,247,000, and the number of vacancies to every 100 employees reaching a high of 4.1 in October to December 2021, it is most certainly an employee’s market.

Elsewhere, in a strive towards the metaverse, US tech giant Microsoft announced a deal to buy Activision Blizzard, creator of Candy Crush and Call of Duty, creating the world’s third largest gaming company.

We have plenty of data to round up the week, including UK retail sales, Eurozone and Japanese CPI.

Hannah Owen, Portfolio Specialist.