LiveWire

It is not a surprise that Chinese tech stocks have suffered in the past year as the government launched a wave of regulation for big-tech, targeting industries from fintech to video games to online tutoring. With valuations down significantly, it appears investors are starting to take notice. The KraneShares CSI China Internet ETF, that tracks the largest names of the China internet theme, has seen inflows pick up recently. The group overall has started finding buyers after the steep sell-off. Risk-averse investors should beware however, as stocks in the region have shown to be very volatile and a move in either direction can be swift.  

The US Core CPI rose modestly, +0.6% MoM (vs 0.5% forecasted) and +5.5% YoY (vs 5.4% forecasted). Shelter, and used cars and trucks were the largest contributors, while energy prices had their first decline in December. The Dec CPI number is better than "feared”, but it is unlikely to alter Fed policy for the moment. However, the news is well perceived by markets as both the S&P 500 and the Nasdaq are moving higher.

Energy prices have surged across the globe, and oil prices don't show any sign of fatigue, up more than 6% so far in 2022. Given the low rates of reinvestment in this sector and growing demand for energy, it is very probable that demand for energy exceeds supply for the coming year. As a result, energy prices are likely to move higher. Historically, Europe energy sector has well tracked the performance of the UK Brent. Moreover, given the value tilt of European stocks and a determined Fed to pursue policy normalization, Europe overall has also seen increasing interest from global investors.

Fed Chairman Powell came across as more dovish than expected by the market. He reassured markets mentioning decisions around balance sheet reductions will take 2-4 meetings. Powell also said inflation should remain above target until middle of the year, although inflationary pressures could last well into next year. A slightly more dovish tone was enough to make the tech-heavy Nasdaq pivot from its 0.60% intraday loss to gains of 1.2%.  

The German multinational online food delivery service company announced that its food delivery business is expected to break even during second half of this year, and generate between EUR0 and EUR100m in adjusted EBITDA in Q4 2022. Following the news, the stock jumped 7%.The German company has invested heavily in the quick commerce space and is enjoying strong growth since the Covid pandemic. Recently, the company also reported that it acquired a majority stake in Spanish delivery startup Glovo, holding now about 83% of the startup on a non-diluted basis, and sold off another USD150m worth of its stake in Latin America based Rappi, in an attempt to realign its global footprint.