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Weekly Brief Sheet - 13/02/23

Provides a market roundup, a selection of useful data points we use for our investment analysis, and some interesting articles/charts we have noticed recently.

The major benchmarks ended lower in a week with relatively few important economic releases or other concrete drivers of sentiment.

Sector performance was relatively uniform within the S&P 500 Index, with energy stocks being the notable upside outlier and communication services shares the prominent laggard.

The most significant stock-specific event for the broad benchmarks was a plunge in shares of Google parent Alphabet, which lost roughly USD 100 billion in market capitalization on Wednesday and fell roughly 10% for the week.

The recent debuts of rival chatbots, such as ChatGPT and Perplexity, have raised concerns for some investors about Google’s ability to maintain its dominance in internet search and AI. Microsoft has invested heavily in ChatGPT creator OpenAI and unveiled a prototype of the two companies’ combined search engine on Monday.

The yield on the benchmark 10-year U.S. Treasury note increased solidly over the week as investors appeared to continue digesting the previous week’s strong January payrolls report. (Bond prices and yields move in opposite directions.) The yield curve inverted further—Bloomberg reported that two-year Treasury yields moved to their highest level over 10-year yields in four decades—as fears grew that the Fed would need to push the economy into recession in order to tame inflation.

The Australian share market has posted a modest fall in early trade, with the big mining and financial sectors both slightly in the red, the biggest fall among the top 200 companies in early trade was Star Entertainment Group, with the casino operator flagging a potential $1.6 billion non-cash hit to the value of its business if a proposed increase in New South Wales casino duties goes ahead as planned in July this year.

Thursday's upcoming Aussie jobs numbers will be a crucial gauge for the RBA to see if policy rate changes have started to take effect, inflation predictions seem to suggest not.


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