David Malpass, appointed by former President Donald Trump, will be stepping down from his position at the World Bank by the end of June 2023, with U.S. Treasury Secretary Janet Yellen thanking him for his service. Under pressure from Yellen to accelerate reforms, the U.S. will soon nominate a replacement, opening up the process to more candidates in order to improve the institution's credibility. Malpass earned $525,000 in annual salary and the World Bank committed more than $104 billion to projects around the globe in fiscal 2022, putting pressure on the leadership to shake up the organization and pave the way for a new president.
EQUITY
The stock market ended higher on Wednesday as retail sales surged 3% in January and U.S. consumer prices accelerated, putting the Fed's pivot narrative to rest. The S&P 500 and Nasdaq have climbed 0.28% and 0.77%, respectively, and 70% of S&P 500 companies reported quarterly earnings that topped profit expectations. Taiwan Semiconductor Manufacturing Co. saw a significant drop after a report from Berkshire Hathaway indicated that it was selling its stake.
GOLD
Gold prices have dropped 1% on Wednesday, settling at $1,836 an ounce, as rising fears of U.S. inflation due to the latest Consumer Price Index (CPI) will continue to tighten the money supply. Going forward, a break of $1,830 support may lead to prices dropping to $1,785.
OIL
Oil prices rose on Thursday as traders bought into heavily discounted markets due to positive demand forecasts from the IEA and OPEC, while concerns over rising interest rates, weakening demand, and the strength of the dollar were offset by higher 2023 demand outlooks and initial economic readings from China. However, US crude inventories grew substantially more than expected last week, and gasoline inventories showed low retail fuel demand.
CURRENCY
The U.S. dollar index rose to six-week highs on Wednesday, boosted by better-than-expected retail sales data and Fed Funds futures pricing in 68 basis points of extra hikes. This pushed the U.S. central bank's expected terminal interest rate to about 5.25%, which is an additional 50 to 75 basis points of hikes left.
