Weekly Market Update - 23 January 2023

Incoming Prime Minister

Incoming New Zealand Prime Minister Chris Hipkins will prioritize the economy as recession looms and may jettison some of Jacinda Ardern’s policies as he seeks to win back voters ahead of an October election. Labour, which is trailing the main opposition National Party in opinion polls, moved swiftly to unite behind Hipkins to ensure a smooth leadership transition following Ardern’s shock resignation. Meanwhile, Hipkins has urged men to call out misogyny, saying the way Ardern was treated by some was “utterly abhorrent.”

Source: Bloomberg

Davos Conversations

Over in Davos, the talk is all about growth. Gita Gopinath, the International Monetary Fund’s No. 2 official, said the global economy has shown “signs of resilience,” and European Central Bank Governing Council member Francois Villeroy de Galhau predicted that the euro region should avoid a recession this year. Yet inflation remains the specter, with BASF CEO Martin Brudermueller noting that a drop in gas prices won’t provide immediate relief to Europe’s energy-intensive industries. Meanwhile, Nicolai Tangen, the head of Norway’s $1.3 trillion sovereign wealth fund, warned that China's emergence from Covid restrictions risks piling upward pressure on prices.

Source: Bloomberg

Tech Job Cuts

Microsoft plans to cut jobs in a number of engineering divisions on Wednesday, according to a person familiar with the matter, joining the ranks of technology giants that are scaling back as the industry prepares for a prolonged slump in demand. Microsoft most recently shrank its workforce in October and July, and has eliminated open positions and paused hiring in various groups.

Source: Bloomberg