WEEKLY MARKET RECAP
Your weekly global financial market newsletter
WEEKLY MARKET RECAP
Your weekly global financial market newsletter
Throughout the week, stocks saw an upward trend, with notable performance from large-cap growth stocks and the Nasdaq Composite Index, which is weighted towards technology stocks. Tech giants such as Meta Platforms (formerly Facebook) and chipmaker NVIDIA recorded significant gains. In contrast, energy stocks lagged due to an early-week pullback in oil prices. As the Martin Luther King, Jr. Day holiday was scheduled for the following Monday, markets anticipated closure. In terms of local currency, the pan-European STOXX Europe 600 Index saw marginal changes, reflecting traders’ evaluations of the potential for interest rates to remain elevated for a more extended period than initially anticipated. Among major European indices, Germany’s DAX rose by 0.66%, while the UK’s FTSE 100 Index declined by 0.84%.
US30 +0.34% |
US100 +3.23% |
US500 +1.84% |
GER40 +0.67% |
U.S. natural gas and power prices reached multi-year highs as extreme cold weather increased gas demand and froze wells, leading to a decline in supplies. Gas output was expected to decline by 3.4% over five days, posing a potential challenge to power systems. Although the decrease was smaller than previous winter storms, demand, including exports, was projected to surpass all-time highs. The freeze, which spread from the Pacific Northwest to the central and eastern U.S., prompted power grid operators to advise generator owners to prepare for increased demand. Record-high next-day power prices and gas prices were observed, and freezing temperatures in key production areas could impact oil and gas production. Grid operators issued weather advisories, emphasising the need for equipment maintenance. The situation raised concerns about potential strain on power systems and disruptions in gas supplies.
NATGAS +15.29% |
The Dollar Index initially rose due to safety buying following U.S. and British military strikes in Yemen, but gains were later pared as U.S. producer prices unexpectedly fell in December, fueling expectations of an early U.S. rate cut. The producer price index fell 0.1%, increasing the likelihood of lower inflation. Traders reacted by increasing bets on a March rate cut, with Fed funds futures implying a 79% chance. Despite mixed economic indicators, the market seems enthusiastic about potential rate cuts. The Dollar Index was up 0.19% at 102.40, with the New Zealand and Australian currencies initially performing well.
EUR/USD +0.08% |
USD/JPY +0.18% |
GBP/USD +0.28% |
USD/CAD +0.32% |
Whales in the cryptocurrency ecosystem are actively accumulating Ethereum (ETH), with significant transactions reported. One whale, identified by the wallet address “0xAA15,” withdrew 5,762 ETH (approximately $15.06 million) from Binance, bringing their total accumulation to 50,733 ETH ($99.2 million) since September 19, 2023. Another whale, “0x9314,” spent 7.29 million USDT to acquire 2,800 ETH, adding to their robust portfolio of 82,780 ETH (around $150.3 million) since January 1, 2023. Ethereum’s whales, coupled with a surge in large transactions (worth at least $100,000), have contributed to changing the market dynamics. Ethereum’s price has risen by 11.42% in the past 24 hours, reaching $2,645.07, driven by overall market excitement following the approval of a spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC). There is growing optimism that a spot Ethereum ETF could follow, boosting retail sentiment and pushing Ethereum towards the $2,700 benchmark.
BTC -2.89% |
ETH +13.02% |
LTCUSD +9.91% |
XMRUSD +6.53% |
In the UK, the economy rebounded with a 0.3% growth in November, reversing the previous month’s 0.3% decline, primarily driven by robust performances in the services and industrial sectors. This surpassed the expected 0.2% expansion according to a FactSet poll of analysts. However, over the three months leading to November, the economy contracted by 0.2%, largely due to widespread weaknesses in manufacturing industries.
In the Eurozone, ECB President Christine Lagarde expressed optimism about overcoming inflation challenges in a French television interview, stating that she believed “the worst part is behind us.” She suggested that interest rates had likely peaked, with a potential for future cuts once the fight against inflation is successful. However, she refrained from specifying when these rate adjustments might occur.
Official data indicated resilience in the euro area’s labour market amid the economic slowdown, with the unemployment rate dropping to 6.4% in November from 6.5% in October. Yet, signs of correction in the labour market emerged, as total hours worked slightly decreased in the third quarter—the first decline since the end of 2020. Job vacancies also declined in recent months, while retail sales volumes contracted by 0.3% sequentially in November following a 0.4% growth in October. Germany experienced an unexpected 0.7% sequential decline in industrial output in November, partly attributed to reduced manufacturing orders. New orders increased by 0.3% month over month but fell short of expectations.
In the US, economic data releases were generally in line with expectations, with a particular focus on inflation data. Consumer price inflation rose 0.3% in December, slightly exceeding expectations, while core prices increased by 0.3% in line with consensus. For 2023, core prices rose by 3.9%, the slowest 12-month pace since mid-2021. Producer price data released on Friday was more positive, as headline wholesale prices fell by 0.1% in December for the third consecutive month. For 2023, prices rose by 1.0%, with core prices increasing by 1.8%, below expectations and the Federal Reserve’s inflation target of 2.0%. The US labour market showed strength at the beginning of the year, with 202,000 workers filing for unemployment benefits in the previous week, below expectations and the lowest number since mid-October. Continuing claims also reached the lowest level since October, with 1.83 million filings.
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