US markets fell yesterday and Asian shares have followed suit this morning as traders digest a hot US inflation report that some fear made it even less likely that the Federal Reserve will cut interest rates in March.

Why rates interest matters to the stock market: Lower rates traditionally = more money seeking (hopefully) better returns in public equities. Traders also generally figure that lower rates = better fortunes ahead for many types of companies on the back of more consumer spending and cheaper borrowing for corporates.

What happened yesterday: The Dow, S&P and Nasdaq all dropped 1.4-1.9% yesterday after data showed consumer prices in the US had risen in January by the most in eight months. Observers had expected inflation to continue cooling, but it ticked up to 3.1% on an annual basis.

Where we stand right now: The Nikkei, Kospi, and Hong Kong’s Hang Seng are down in early trading; it’s Hong Kong’s first day of trading this week after the Lunar New Year holiday, while Shanghai is still closed. US futures have firmed up but still point to a soft (but not outrageous) opening on Wall Street, and European equities look set to dip at the opening bell.

MEANWHILE- BTC hits the USD 50k mark for the first time in two years: BTC hit the USD 50k mark yesterday for the first time since December 2021, rallying on the back of expectations of interest rate cuts later this year and optimism that the US government’s approval of spot BTC exchange-traded funds last month could herald larger mainstream acceptance, Reuters reports. BTC was trading at around USD 49.7k as of midnight last night.

EGX30

28,605

+0.4% (YTD: +15.0%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

21.25% deposit

22.25% lending

Tadawul

12,405

+0.9% (YTD: +3.7%)

ADX

9,351

+0.3% (YTD: -2.4%)

DFM

4,219

+0.2% (YTD: +3.9%)

S&P 500

4,953

-1.4% (YTD: +3.8%)

FTSE 100

7,512

-0.8% (YTD: -2.9%)

Euro Stoxx 50

4,689

-1.2% (YTD: +3.7%)

Brent crude

USD 82.77

+0.9%

Natural gas (Nymex)

USD 1.69

-4.5%

Gold

USD 2,006

-1.3%

BTC

USD 49,668

-0.8% (YTD: +17.0%)

THE CLOSING BELL-

The EGX30 rose 0.4% at yesterday’s close on turnover of EGP 6.5 bn (75.5% above the 90-day average). Local investors were net sellers. The index is up 14.9% YTD.

In the green: Juhayna (+13.5%), Ibnsina Pharma (+11.7%), and Edita (+10.2%).

In the red: CIB (-2.5%), Orascom Development (-1.4%), and Oriental Weavers (-1.2%).

CORPORATE ACTIONS-

EFG Holding grants 17 mn shares to its employees: EFG Holding has granted 17 mn of its issued shares at a total value of EGP 129 mn as part of its employee stock ownership plan, the company announced in an EGX bulletin.

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