WEEKLY MARKET RECAP
Your weekly global financial market newsletter
WEEKLY MARKET RECAP
Your weekly global financial market newsletter
Stocks continued their weekly winning streak, the longest since 2017, as investors grew increasingly confident that the economy would avoid a recession in the upcoming months. The S&P 500 Index came within 84 basis points of its all-time intraday high from the beginning of 2022, while the Nasdaq 100 Index and Dow Jones Industrial Average set new records. In local currency terms, the pan-European STOXX Europe 600 Index edged up by 0.21%, remaining close to its nearly one-year high. However, major Continental stock indices showed mixed results, with Germany’s DAX declining by 0.27%, and the UK’s FTSE 100 Index gaining 1.60%.
US30 +0.22% |
US100 +0.93% |
US500 +0.75% |
GER40 -0.27% |
Gold climbed to approximately $2,050 per ounce on Friday, marking its second consecutive weekly gain. This uptrend was fueled by a significant decline in dollar and Treasury yields, driven by increasing speculation that the US Federal Reserve will initiate interest rate cuts in the coming year. Economic data released on Thursday indicated weaker-than-expected US growth in the third quarter, and the Philadelphia Fed Manufacturing Index for December fell significantly below forecasts. In the oil market, Brent crude futures remained below $80 per barrel, securing a second consecutive weekly rise. This was supported by disruptions to global trade, notably heightened Houthi attacks on ships in the Red Sea. Despite a reported decline in oil shipments in the Red Sea of over 40% for the week, the overall impact on oil supply remains limited, as the majority of Middle East crude is still exported through the Strait of Hormuz. However, oil prices faced pressure on Thursday following Angola’s announcement that it would exit OPEC after 16 years, citing disagreements over the country’s oil output quota for 2024. OPEC’s efforts to constrain supply faced challenges as non-OPEC production, led by the US, continued to grow.
NATGAS +4.78% |
The Dollar Index reached a nearly five-month low on Friday, driven by data revealing that annual U.S. inflation dropped below 3% in November. The Personal Consumption Expenditures (PCE) Price Index showed a 2.6% inflation rate in the 12 months through November. The core PCE price index, excluding food and energy, rose 3.2% year-on-year in November, the smallest increase since April 2021. The Federal Reserve, tracking these measures for its 2% inflation target, is expected to lean toward an easier monetary stance. The Dollar Index is on track to finish the year down about 2%.
EUR/USD +0.83% |
USD/JPY -0.27% |
GBP/USD +0.48% |
USD/CAD -1.05% |
BlackRock, along with ARK Invest and 21Shares, updated its filing for a spot Bitcoin ETF, transitioning to a cash-only approach, seen as a positive move. The amended S-1 filing with the SEC reveals new details about the proposed fund’s creation and redemption mechanisms, identified by the IBIT ticker. Shibarium, Shiba Inu’s layer-2 solution, has surpassed 130 million inscriptions, showcasing remarkable growth. Notably, it achieved this milestone faster than many other chains, with low gas fees. Shibarium now competes closely with Polygon and surpasses networks like BNB, Avalanche C-Chain, Fantom, Celo, Gnosis, Arbitrum One, and zkSync Era. Ethereum co-founder Vitalik Buterin made a substantial transfer of 500 ETH, approximately $1.1 million, to a Coinbase Custody Wallet. Addressing community speculations, Buterin clarified that these transfers are not personal sales but mainly donations to charities, non-profit organizations, or projects. The recipients sell the donated ETH to cover operational expenses.
BTC +1,20% |
ETH +2.66% |
LTCUSD +1,99% |
XMRUSD +0,01% |
In the UK, headline inflation slowed more than expected to 3.9% in the 12 months through November, compared with an annual rate of 4.6% in October. This deceleration was attributed to reduced prices for motor fuels, recreation, culture, and food. While core and services inflation, which indicates underlying price pressures, eased to 5.1% and 6.3% respectively, they still surpassed the Bank of England’s 2% inflation target. Revised data from the Office for National Statistics revealed a weaker-than-previously-thought performance in recent quarters, with GDP lowered from 0.2% to flat in the April-to-June period and a 0.1% contraction in the final estimate for the third quarter.
In the Eurozone, concerns about a possible recession heightened as German manufacturing sentiment continued to decline. The Ifo Institute’s business climate index dropped to 86.4 in December from 87.2 in November, reflecting manufacturers’ worsened current business situation, shrinking order books, and increased pessimism about the first half of the following year. European Central Bank (ECB) policymaker Yannis Stournaras emphasised the need for inflation to stabilise below 3% by mid-2024 before considering rate reductions, echoing sentiments expressed by Slovenia’s central bank governor, Bostjan Vasle.
In the US, economic data suggested progress toward the Federal Reserve’s goals of low inflation and unemployment. The core personal consumption expenditures price (PCE) index, the Fed’s preferred inflation metric, rose only 0.1% in November, with October’s increase revised lower. The headline PCE index experienced its first decline in 21 months, dropping 0.1% in November due to a significant decrease in goods prices. Notable surprises included a 14.8% surge in new home construction, increased existing home sales, and a rise in the Conference Board’s consumer confidence index to 110.7 in November. Despite regional manufacturing indices indicating ongoing factory activity contraction, durable goods orders jumped 5.4% in November, exceeding expectations and marking the most substantial increase since July 2020. Orders for nondefense capital goods, excluding aircraft, a business investment proxy, rose 4.7%, the most significant increase since 2004.
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