WEEKLY MARKET RECAP
Your weekly global financial market newsletter
WEEKLY MARKET RECAP
Your weekly global financial market newsletter
A late surge in the market helped major indices close the week with modest gains or flat performance. The Russell 2000 Index, representing small-cap stocks, outperformed the S&P 500 for the third time in the last four weeks, contributing to a reduction in its significant underperformance for the year-to-date period. While growth stocks modestly extended their lead over value shares, energy stocks within the S&P 500 lagged as domestic oil prices fell below $70 per barrel for the first time since June. In local currency terms, the pan-European STOXX Europe 600 Index recorded a fourth consecutive week of gains, finishing 1.30% higher. The positive momentum in stocks is likely to have been influenced by expectations that central banks could lower interest rates in the coming year due to easing inflation and signs of economic challenges in European countries. Major European stock indices also recorded gains, with Germany’s DAX rising by 2.21%, and the UK’s FTSE 100 Index adding 0.33%.
US30 +0.01% |
US100 +0.54% |
US500 +0.21% |
GER40 +2.21% |
Natural gas futures in the United States fell below $2.6/MMBtu, reaching a five-month low, largely due to excess of supply over demand. Despite a larger-than-expected withdrawal of 117 billion cubic feet (bcf) reported in the latest EIA data, the record-high domestic natural gas production in the US has allowed utilities to build reserves. Gold stabilised at around $2,030 an ounce on Friday following increased volatility in recent sessions. Investors were anticipating a crucial US monthly jobs report that could offer insights into the future trajectory of interest rates. Oil prices experienced an upturn on Friday, boosted by a stronger-than-expected jobs report that fostered optimism about a soft landing in the U.S. and supported the outlook for crude demand. However, concerns about oversupply remained, with doubts lingering regarding OPEC+’s commitment to collectively cut production by 2.2 million barrels per day early next year.
NATGAS -9.51% |
The dollar index climbed to 104.2 before moderating its gains to the 104 level on Friday. This adjustment followed a robust jobs report that provided the Federal Reserve with additional flexibility to postpone the initiation of rate cuts aimed at combating inflation. The report revealed the addition of nearly 200 thousand jobs to the US economy in November, surpassing market expectations of 180 thousand. Unexpectedly, the unemployment rate declined, and wage growth maintained its brisk pace. These results contradicted the emerging belief that the U.S. labour market was experiencing a slowdown, contributing to a growing body of evidence suggesting that the U.S. economy has remained resilient amid the Federal Reserve’s aggressive tightening measures. Despite the yen’s notable gains, particularly significant in the DXY basket, supported by indications of a more hawkish stance from the Bank of Japan, the Dollar Index continued its upward trajectory for the week.
EUR/USD -1.11% |
USD/JPY -1.48% |
GBP/USD -1.21% |
USD/CAD +0.61% |
Over the past week, Bitcoin has increased in value by over 10%, and Ethereum has seen a notable 7.75% increase against the U.S. dollar. The overall crypto market, featuring over 11,000 cryptocurrencies across 940 exchanges, has experienced steady growth, reaching a total worth of $1.7 trillion, with a 2.8% rise in the last 24 hours. Top cryptocurrencies such as BONK, ORDI, and BTT led the weekly gains with triple-digit gains of 226%, 146%, and 117%, respectively. Other notable performers include Terra Luna Classic (LUNC) with a 72% growth and BEAM with a 60% rise. High-volume tokens in global trade volume, excluding major currencies such as BTC and ETH, include SOL, XRP, DOGE, LINK, ADA, and BNB, with gains between 7% and 21% over the week.
BTC +10.22% |
ETH +7.75% |
LTCUSD +8.09% |
XMRUSD +3.81% |
In the UK, the construction sector recorded a sharp decline for the third consecutive month in November, largely due to a continued decline in homebuilding, as indicated by the Purchasing Managers’ Index compiled by S&P Global and the Chartered Institute of Purchasing and Supply.
In the Eurozone, ECB Executive Board member Isabel Schnabel signalled a shift towards a dovish stance in an interview with Reuters. She mentioned that the recent slowdown in inflation makes a further rate increase less likely. Inflation has decelerated for three consecutive months, hovering just above the ECB’s 2% target. Schnabel, previously a policy hawk, cautioned that the fight against inflation is ongoing, and prices might rise again as budget subsidies expire and high energy prices no longer factor into yearly comparisons. Governing Council member Francois Villeroy de Galhau also noted a quicker-than-expected disinflation and suggested that a rate cut could be considered in 2024.
In October, industrial output in the Eurozone contracted for the fifth consecutive month, declining by 0.4%, contrary to the anticipated 0.2% increase. Unexpectedly, factory orders dropped by 3.7%. At the same time, the jobless rate increased to 5.9% in November, reaching its highest level since May 2021.
In the United States, a busy economic calendar influenced market sentiment. The nonfarm payrolls report for November exceeded expectations, with employers adding 199,000 jobs. The unemployment rate fell back to 3.7%, and average hourly wages rose by 0.4%. A notable market reaction followed the University of Michigan’s preliminary consumer sentiment gauge for December, reaching its highest level since August, alleviating concerns about inflation. Consumer expectations for price increases in the coming year decreased to 3.1%, down from 4.5% in November.
The week’s economic data in the U.S. presented a mixed picture. While services sector activity showed a modest pickup in November, job openings for October fell more than expected to 8.73 million, the lowest since March 2021. Additionally, October factory orders, reported on Monday, fell more than expected.
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